EXHIBIT 4.2
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EXECUTION COPY
CREDIT AGREEMENT
Dated as of June 6, 2005
among,
ROCK-TENN COMPANY,
as a Borrower,
ROCK-TENN COMPANY OF CANADA,
as the Canadian Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE LENDERS Parties Hereto,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
and
BANK OF AMERICA, N.A., ACTING THROUGH ITS CANADA BRANCH,
as Canadian Agent
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WACHOVIA CAPITAL MARKETS, LLC,
SUNTRUST XXXXXXXX XXXXXXXX, A DIVISION OF SUNTRUST CAPITAL MARKETS, INC.,
and
BANC OF AMERICA SECURITIES LLC,
as Joint Book Runners
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WACHOVIA CAPITAL MARKETS, LLC
and
SUNTRUST XXXXXXXX XXXXXXXX, A DIVISION OF SUNTRUST CAPITAL MARKETS, INC.,
as Joint Lead Arrangers
SUNTRUST BANK, as Syndication Agent
BANK OF AMERICA, N.A., as Documentation Agent
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
1.1 Definitions.................................................................................... 1
1.2 Computation of Time Periods.................................................................... 34
1.3 Accounting Terms............................................................................... 34
1.4 Exchange Rates; Currency Equivalents........................................................... 35
ARTICLE II CREDIT FACILITY ...................................................................................... 35
2.1 U.S. Revolving Loans........................................................................... 35
2.2 Canadian Revolving Loans....................................................................... 37
2.3 Term Loan...................................................................................... 43
2.4 U.S. Swingline Loan Subfacility................................................................ 44
2.4-A Canadian Swingline Loan Subfacility............................................................ 46
2.5 Letter of Credit Subfacility................................................................... 49
2.6 Default Rate................................................................................... 52
2.7 Conversion Options............................................................................. 52
2.8 Prepayments.................................................................................... 53
2.9 Termination and Reduction of Commitments; Reallocation of Committed Amounts.................... 55
2.10 Fees........................................................................................... 57
2.11 Computation of Interest and Fees............................................................... 58
2.12 Pro Rata Treatment and Payments................................................................ 59
2.13 Non-Receipt of Funds by an Agent............................................................... 61
2.14 Inability to Determine Interest Rate........................................................... 62
2.15 Illegality..................................................................................... 62
2.16 Requirements of Law............................................................................ 63
2.17 Indemnity...................................................................................... 64
2.18 Taxes.......................................................................................... 65
2.19 Indemnification; Nature of Issuing Lender's Duties............................................. 67
2.20 Replacement of Lenders......................................................................... 68
2.21 Relationship between the Agents................................................................ 68
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................................................... 69
3.1 Corporate Existence; Compliance with Law....................................................... 69
3.2 Corporate Power; Authorization................................................................. 69
3.3 Enforceable Obligations........................................................................ 69
3.4 No Legal Bar................................................................................... 69
3.5 No Material Litigation......................................................................... 70
3.6 Investment Company Act, Etc. .................................................................. 70
3.7 Margin Regulations............................................................................. 70
3.8 Compliance with Environmental Laws............................................................. 70
3.9 Insurance...................................................................................... 71
3.10 No Default..................................................................................... 71
3.11 No Burdensome Restrictions..................................................................... 71
3.12 Taxes.......................................................................................... 71
3.13 Subsidiaries................................................................................... 72
3.14 Financial Statements, Fiscal Year and Fiscal Quarters.......................................... 72
3.15 ERISA.......................................................................................... 73
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3.16 Intellectual Property.......................................................................... 74
3.17 Ownership of Property; Liens................................................................... 74
3.18 Existing Indebtedness.......................................................................... 74
3.19 Financial Condition............................................................................ 75
3.20 Labor Matters.................................................................................. 75
3.21 Payment or Dividend Restrictions............................................................... 75
3.22 Accuracy and Completeness of Information....................................................... 75
3.23 Compliance with Trading with the Enemy Act, OFAC Rules and Regulations and Patriot Act......... 76
3.24 Use of Proceeds................................................................................ 76
3.25 Consummation of Acquisition; Representations and Warranties from Other Documents............... 77
3.26 Business Locations............................................................................. 77
3.27 Security Documents............................................................................. 77
ARTICLE IV CONDITIONS PRECEDENT.................................................................................. 77
4.1 Conditions to Closing Date and Initial Revolving Loans and Term Loan........................... 77
4.2 Conditions to All Extensions of Credit......................................................... 81
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................. 82
5.1 Corporate Existence, Etc. ..................................................................... 82
5.2 Compliance with Laws, Etc. .................................................................... 82
5.3 Payment of Taxes and Claims.................................................................... 82
5.4 Keeping of Books............................................................................... 83
5.5 Visitation, Inspection, Etc. .................................................................. 83
5.6 Insurance; Maintenance of Properties........................................................... 83
5.7 Financial Reports; Other Notices............................................................... 84
5.8 Notices Under Certain Other Indebtedness....................................................... 85
5.9 Notice of Litigation........................................................................... 85
5.10 Additional Guarantors.......................................................................... 86
5.11 Pledged Assets................................................................................. 86
5.12 Further Assurances Regarding Real Estate....................................................... 87
5.13 Additional Further Assurances.................................................................. 89
5.14 Use of Proceeds................................................................................ 89
ARTICLE VI NEGATIVE COVENANTS ................................................................................... 90
6.1 Financial Requirements......................................................................... 90
6.2 Liens.......................................................................................... 91
6.3 Indebtedness................................................................................... 92
6.4 Merger and Sale of Assets...................................................................... 94
6.5 Transactions with Affiliates................................................................... 95
6.6 Nature of Business............................................................................. 96
6.7 Regulations T, U and X......................................................................... 96
6.8 ERISA Compliance............................................................................... 96
6.9 Limitations on Subsidiaries Which Are Not Restricted Subsidiaries.............................. 96
6.10 Limitation on Investments...................................................................... 97
6.11 Limitation on Securitization Undertakings of the Borrowers and Restricted Subsidiaries......... 97
6.12 Restrictive Agreements......................................................................... 98
6.13 Restricted Payments............................................................................ 98
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6.14 Adverse Arrangements.......................................................................... 99
6.15 Fiscal Year; Organizational Documents; Material Contracts..................................... 99
6.16 Ownership of Restricted Subsidiaries.......................................................... 99
6.17 Capital Expenditures.......................................................................... 99
ARTICLE VII EVENTS OF DEFAULT .................................................................................. 100
7.1 Events of Default............................................................................. 100
7.2 Acceleration; Remedies........................................................................ 102
ARTICLE VIII AGENCY PROVISIONS.................................................................................. 103
8.1 Appointment................................................................................... 103
8.2 Delegation of Duties.......................................................................... 104
8.3 Exculpatory Provisions........................................................................ 104
8.4 Reliance by Agents............................................................................ 104
8.5 Notice of Default............................................................................. 105
8.6 Non-Reliance on Agents and Other Lenders...................................................... 105
8.7 Indemnification............................................................................... 105
8.8 Agents in Their Individual Capacity........................................................... 106
8.9 Successor Agent............................................................................... 106
8.10 Patriot Act Notice............................................................................ 106
8.11 Other Agents, Arrangers and Managers.......................................................... 106
8.12 Collateral and Guaranty Matters............................................................... 107
ARTICLE IX MISCELLANEOUS ....................................................................................... 108
9.1 Amendments and Waivers........................................................................ 108
9.2 Notices....................................................................................... 110
9.3 No Waiver; Cumulative Remedies................................................................ 112
9.4 Survival of Representations and Warranties.................................................... 112
9.5 Payment of Expenses and Taxes................................................................. 113
9.6 Successors and Assigns; Participations; Purchasing Lenders.................................... 113
9.7 Adjustments; Set-off.......................................................................... 116
9.8 Table of Contents and Section Headings........................................................ 117
9.9 Counterparts.................................................................................. 117
9.10 Effectiveness................................................................................. 117
9.11 Severability.................................................................................. 117
9.12 Integration................................................................................... 117
9.13 Governing Law................................................................................. 118
9.14 Consent to Jurisdiction and Service of Process................................................ 118
9.15 Confidentiality............................................................................... 118
9.16 Acknowledgments............................................................................... 119
9.17 Waivers of Jury Trial......................................................................... 119
9.18 Judgment Currency............................................................................. 119
9.19 Subordination of Intercompany Debt............................................................ 120
ARTICLE X GUARANTY OF COMPANY OBLIGATIONS....................................................................... 120
10.1 The Guaranty.................................................................................. 120
10.2 Bankruptcy.................................................................................... 121
10.3 Nature of Liability........................................................................... 121
10.4 Independent Obligation........................................................................ 122
10.5 Authorization................................................................................. 122
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10.6 Reliance...................................................................................... 122
10.7 Waiver........................................................................................ 122
10.8 Limitation on Enforcement..................................................................... 123
10.9 Confirmation of Payment....................................................................... 124
ARTICLE XI GUARANTY OF CANADIAN OBLIGATIONS..................................................................... 124
11.1 The Guaranty.................................................................................. 124
11.2 Bankruptcy.................................................................................... 125
11.3 Nature of Liability........................................................................... 125
11.4 Independent Obligation........................................................................ 125
11.5 Authorization................................................................................. 126
11.6 Reliance...................................................................................... 126
11.7 Waiver........................................................................................ 126
11.8 Limitation on Enforcement..................................................................... 127
11.9 Confirmation of Payment....................................................................... 128
ARTICLE XII SPECIAL PROVISIONS APPLICABLE TO LENDERS UPON THE OCCURRENCE OF A SHARING EVENT..................... 128
12.1 Participations................................................................................ 128
12.2 Administrative Agent's Determinations Binding................................................. 128
12.3 Participation Payments in U.S. Dollars........................................................ 129
12.4 Delinquent Participation Payments............................................................. 129
12.5 Settlement of Participation Payments.......................................................... 129
12.6 Participation Obligations Absolute............................................................ 130
12.7 Increased Costs; Indemnities.................................................................. 130
12.8 Provisions Solely to Effect Intercreditor Agreement........................................... 130
SCHEDULES
Schedule 1.1A Form of Account Designation Letter
Schedule 1.1C Existing Letters of Credit
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of U.S. Revolving Note
Schedule 2.2(e) Form of Canadian Revolving Note
Schedule 2.3(d) Form of Term Note
Schedule 2.4(d) Form of U.S. Swingline Note
Schedule 2.4-A(h) Form of Canadian Swingline Note
Schedule 2.7 Form of Notice of Extension/Conversion
Schedule 2.18 Form of Tax Exempt Certificate
Schedule 3.9 Insurance
Schedule 3.11 Burdensome Restrictions
Schedule 3.13 Subsidiaries
Schedule 3.15 ERISA Matters
Schedule 3.16 Intellectual Property Matters
Schedule 3.17 Ownership of Property; Liens
Schedule 3.18 Existing Indebtedness
Schedule 3.20 Labor Matters
Schedule 3.21 Payment Restrictions
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Schedule 3.26(a)-(e) Business Locations
Schedule 5.7(c) Form of Officer's Compliance Certificate
Schedule 5.10 Form of Joinder Agreement
Schedule 5.12 Mortgaged Properties
Schedule 6.2 Existing Liens
Schedule 6.10 Existing Investments
Schedule 9.2 Notices Addresses; Lender's Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
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EXHIBIT 4.2
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 6, 2005 (the "Credit Agreement"),
is by and among ROCK-TENN COMPANY, a Georgia corporation (the "Company"),
ROCK-TENN COMPANY OF CANADA, a Nova Scotia unlimited liability company (the
"Canadian Borrower," and, together with the Company, the "Borrowers"), those
Domestic Subsidiaries of the Company identified as "U.S. Guarantors" on the
signature pages hereto and such other Domestic Subsidiaries of the Company that
hereafter become parties hereto (collectively, the "U.S. Guarantors"), those
Subsidiaries of the Canadian Borrower identified as "Canadian Guarantors" on the
signature pages hereto and such other Subsidiaries of the Canadian Borrower that
hereafter become parties hereto (collectively, the "Canadian Guarantors"), the
lenders named herein and such other lenders that hereafter become parties hereto
(collectively, the "Lenders" and individually, a "Lender"), WACHOVIA BANK,
NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity,
the "Administrative Agent"), and BANK OF AMERICA, N.A., acting through its
Canada Branch, as Canadian administrative agent for the Lenders (the "Canadian
Agent").
W I T N E S S E T H
WHEREAS, the Borrowers have requested that the Lenders provide revolving
credit and term loan facilities in the aggregate principal amount of
U.S.$700,000,000 for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facilities
available to the Borrowers on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms have the meanings
specified below unless the context otherwise requires:
"Acceptance Lender" means a Canadian Lender who purchases Acceptance Notes
in accordance with Section 2.2(f)(vii) but does not accept or purchase Bankers'
Acceptances.
"Acceptance Note" has the meaning given to it in Section 2.2(f)(vii).
"Account Designation Letter" means the Notice of Account Designation
Letter dated the Closing Date from the Borrowers to the Administrative Agent in
substantially the form of Schedule 1.1A.
"Acquired Businesses" has the meaning specified in the definition of "Gulf
States Acquisition."
"Acquisition" shall mean any acquisition, whether by stock purchase, asset
purchase, merger, consolidation or otherwise of a Person or a business line of a
Person.
"Acquisition Documents" means the Purchase Agreement and each other
document executed and delivered in connection with the consummation of the Gulf
States Acquisition.
"Additional Credit Party" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 5.10.
"Administrative Agent" has the meaning set forth in the introductory
paragraph hereof, together with any successors or assigns.
"Administrative Agent's Fees" has the meaning set forth in Section
2.10(d).
"Affiliate" means as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, a Person shall be deemed to be
"controlled by" a Person if such Person possesses, directly or indirectly, power
either (i) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
"Agents" means the Administrative Agent and the Canadian Agent.
"Aggregate Canadian Revolving Committed Amount" means the Canadian
Revolving Commitments of all the Canadian Revolving Lenders. The initial
principal Dollar Amount of the Aggregate Canadian Revolving Commitments in
effect on the Closing Date is principal Dollar Amount of ONE HUNDRED million
U.S. DollarS (U.S.$100,000,000) and may be increased or reduced from time to
time in accordance with Section 2.9.
"Aggregate Revolving Committed Amount" means, at any time, the sum of (i)
the Aggregate U.S. Revolving Committed Amount then in effect, plus (ii)
Aggregate Canadian Revolving Committed Amount then in effect.
"Aggregate U.S Revolving Committed Amount" means the U.S. Revolving
Commitments of all the U.S. Revolving Lenders. The initial principal Dollar
Amount of the Aggregate U.S. Revolving Commitments in effect on the Closing Date
is principal Dollar Amount of THREE HUNDRED FIFTY million U.S. DollarS
(U.S.$350,000,000) and may be increased or reduced from time to time in
accordance with Section 2.9.
"Alternate Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (i) the Federal Funds Rate in effect on such day plus -1/2 of 1%
or (ii) the Prime Rate in effect on such day. If for any reason the
Administrative Agent shall have reasonably determined (which determination shall
be conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (i) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal
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Funds Rate shall be effective on the effective date of such change in the Prime
Rate or the Federal Funds Rate, respectively.
"Alternate Base Rate Loans" means Loans that bear interest at an interest
rate based on the Alternate Base Rate.
"Applicable Canadian Revolver BA Margin" means the per annum interest rate
from time to time in effect and payable in addition to the BA Rate applicable to
the Canadian Revolving Loan, as determined by reference to the definition of
"Applicable Percentage".
"Anti-Terrorism Laws" has the meaning set forth in Section 3.23.
"Applicable Borrower" means (i) with respect to all Loans other than
Canadian Revolving Loans, the Company, and (ii) with respect to Canadian
Revolving Loans, the Canadian Borrower.
"Applicable Percentage" means, for any day the rate per annum set forth in
the table below opposite the applicable level then in effect, it being
understood that the Applicable Percentage for (i) Revolving Loans and Term Loans
that are Base Rate Loans shall be the percentage set forth under the column
"Base Rate Loans," (ii) Revolving Loans and Term Loans that are LIBOR Rate Loans
and the Letter of Credit Fee shall be the percentage set forth under the column
"LIBOR Loans and LC Fee," (iii) Revolving Loans that are Bankers' Acceptance
Advances shall be the percentage set forth under the column "Bankers' Acceptance
Advances," and (iv) the Commitment Fee shall be the percentage set forth under
the column "Commitment Fee":
APPLICABLE PERCENTAGE
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BANKERS'
PRICING LEVERAGE BASE RATE LIBOR LOANS ACCEPTANCE COMMITMENT
LEVEL RATIO LOANS AND LC FEE ADVANCES FEE
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I > or = 4.25 to 1.0 0.750% 1.750% 1.750% 0.400
< 4.25 to 1.0
II but 0.500% 1.500% 1.500% 0.325
> or = 3.75 to 1.0
< 3.75 to 1.0
III but 0.250% 1.250% 1.250% 0.250
> or = 3.25 to 1.0
< 3.25 to 1.0
IV but 0.125% 1.125% 1.125% 0.225
> or = 2.75 to 1.0
< 2.75 to 1.0
V but 0.000% 1.000% 1.000% 0.200
> or = 2.25 to 1.0
VI < 2.25 to 1.0 0.000% 0.875% 0.875% 0.175
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Company the financial information and
certifications required to be delivered to the Administrative Agent and the
Lenders in accordance with the provisions of Section 5.7 (each an "Interest
Determination Date"); provided, however, that in determining the Leverage Ratio
for the purposes of determining the
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Applicable Percentage, the items referenced in clauses (v), (vi) and (vii) of
the definition of EBITDA in excess of U.S.$15,000,000 for any applicable
12-month period shall be omitted. Such Applicable Percentage shall be effective
from such Interest Determination Date until the next such Interest Determination
Date. The initial Applicable Percentages shall be based on Level I until the
first Interest Determination Date occurring after the delivery of the officer's
compliance certificate pursuant to Section 5.7 for the quarter ending June 30,
2005. After the Closing Date, if the Borrowers shall fail to provide the
quarterly financial information and certifications in accordance with the
provisions of Section 5.7, the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Borrowers were so required to provide such financial information and
certifications to the Agents and the Lenders, be based on Level I until such
time as such information and certifications are provided, whereupon the Level
shall be determined by the then current Leverage Ratio.
"Asset Disposition" shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of a Borrower or any Restricted
Subsidiary whether by sale, lease, transfer or otherwise. The term "Asset
Disposition" shall (i) include any "Asset Sale" (or any comparable term) under,
and as defined in, the Senior Note Indenture, and (ii) not include any Equity
Offering.
"BA Lender" means any Canadian Lender other than the Acceptance Lenders.
"BA Period" means a period of 1, 2, 3 or 6 months or such other period as
the Canadian Agent may agree, in each case, commencing on a Business Day
selected by Canadian Borrower in its irrevocable Notice of Borrowing or Notice
of Extension/Conversion with respect to a Bankers' Acceptance Advance delivered
to Canadian Agent in accordance with Section 2.2(b) or Section 2.12(b), as
applicable, provided that the foregoing provision relating to BA Periods is
subject to the following:
(i) any BA Period that would otherwise extend beyond the Revolving
Commitment Termination Date shall end on such date;
(ii) Canadian Borrower shall select BA Periods so as not to require
a payment or prepayment of a Bankers' Acceptance Advance pursuant to
Section 2.8 during a BA Period for such Bankers' Acceptance Advance; and
(iii) Canadian Borrower shall select BA Periods so there shall be no
more than five (5) separate Bankers' Acceptance Advances in existence at
any one time.
"BA Rate" means (i) in relation to a Bankers' Acceptance accepted by a
Schedule I Lender (as listed in the Bank Act (Canada)), the CDOR Rate; (ii) in
relation to a Bankers' Acceptance accepted by a Schedule II Lender or Schedule
III Lender (each as listed in the Bank Act (Canada)), the CDOR Rate plus 0.10
per annum
"Bankers' Acceptance" means a xxxx of exchange subject to the Bills of
Exchange Act (Canada) or a depository xxxx subject to the Depository Bills and
Notes Act (Canada) and denominated in Canadian Dollars and drawn by the Canadian
Borrower and accepted by a Canadian Lender in accordance with Section 2.2(f) and
includes (without duplication) an Acceptance Note.
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"Bankers' Acceptance Advance" means the advance of funds to the Canadian
Borrower by way of purchase of Bankers' Acceptances or of an Acceptance Note, in
each case, in accordance with the provisions of Section 2.2(f).
"Bank of America Fee Letter" means the Fee Letter dated as of May 6, 2005
among the Company, Banc of America, N.A. and Banc of America Securities LLC.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate Loans" shall mean all Loans accruing interest based on the
Alternate Base Rate, the U.S. Base Rate or the Canadian Prime Rate.
"Borrowers" has the meaning specified in the introductory paragraph
hereof.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that (a) when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in deposits of U.S. Dollars in the
London interbank market, (b) the term "Business Day" shall also exclude any day
on which banks are not open for foreign exchange dealings between banks in the
exchange of the home country of such foreign currency and (c) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, any Canadian Dollar Loan or U.S. Base Rate Loan, any day other than
a Saturday, Sunday that is a Business Day described in clause (b) and on which
banks are open for business in Xxxxxxx, Xxxxxxx.
"Calculation Date" means the date of the applicable Specified Transaction
which gives rise to the requirement to calculate the financial covenants set
forth in Section 6.1(a)-(c) on a Pro Forma Basis.
"Calculation Period" means, in respect of any Calculation Date, the period
of four fiscal quarters of the Company ended as of the last day of the most
recent fiscal quarter of the Company preceding such Calculation Date for which
the Administrative Agent shall have received the information required by
subsections (a) through (d) of Section 5.7.
"Canadian Agent" means has the meaning specified in the introductory
paragraph hereof, together with any successors or assigns.
"Canadian Agent's Office" means, with respect to any currency, the
Canadian Agent's address and, as appropriate, account as set forth on Schedule
9.2 with respect to such currency, or such other address or account with respect
to such currency as the Canadian Agent may from time to time notify to the
Borrowers and the Lenders.
"Canadian Borrower" has the meaning specified in the introductory
paragraph hereof.
"Canadian Collateral" means any and all Property of the Canadian Credit
Parties pledged from time to time as security for the Canadian Obligations
pursuant to the Canadian Security Documents, whether now owned or hereafter
acquired.
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"Canadian Credit Parties" means the Canadian Borrower and all of the
Canadian Guarantors whether direct or indirect and whether now owned or
hereafter acquired.
"Canadian Dollar Equivalent" means, with respect to any amount denominated
in U.S. Dollars, the equivalent amount thereof in Canadian Dollars as determined
by the Canadian Agent at such time on the basis of the Spot Rate (determined in
respect of the most recent Revaluation Date) for the purchase of Canadian
Dollars with U.S. Dollars.
"Canadian Dollars" or "C$" means the lawful currency of Canada.
"Canadian Guarantors" has the meaning specified in the introductory
paragraph hereof.
"Canadian Lenders" means Bank of America, N.A., acting through its Canada
Branch, for which Canadian Obligations are in respect of Bank of America, N.A.'s
Canadian banking business for purposes of subsection 212(13.3) of the Income Tax
Act, Canada, each of the Persons identified as a "Canadian Lender" on the
signature pages hereto, and such other Lenders permitted under Canadian law to
carry on business in Canada as may be added as Canadian Lenders in accordance
with the terms of this Agreement, each of whom is either resident in Canada for
the purposes of the Income Tax Act (Canada) or an authorized foreign bank for
the purposes of the Bank Act (Canada) for which the Canadian Obligations are in
respect of its Canadian banking business for purposes of subsection 212(13.3) of
the Income Tax Act (Canada), and their successors and assigns.
"Canadian Lending Office" means, initially, the office of each Canadian
Lender designated as such Lender's Canadian Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Agents and the Company as the office of such Lender
at which Base Rate Loans of such Lender are to be made, which office, in the
case of a Canadian Lender that is an authorized foreign bank for the purposes of
the Bank Act (Canada), shall be in Canada.
"Canadian Obligations" means all Credit Party Obligations of the Canadian
Borrower and the other Canadian Credit Parties.
"Canadian Prime Rate" means a fluctuating rate of interest per annum which
is equal to the greater of (i) the reference rate of interest (however
designated) of the Canadian Agent for determining interest chargeable by it on
Canadian Dollar commercial loans made in Canada on such day and (ii) 0.50% above
the annual rate for 30-day Canadian Dollar bankers' acceptances of Schedule I
banks that appears on the Reuters Screen CDOR Page as of 10:00 a.m. on such day.
"Canadian Prime Rate Loan" means any Revolving Loans made by the Canadian
Lenders in Canadian Dollars accruing interest based on the Canadian Prime Rate.
"Canadian Revolving Commitment" means, with respect to each Canadian
Revolving Lender, the commitment of such Canadian Revolving Lender to make
Canadian Revolving Loans in an aggregate principal Dollar Amount at any time
outstanding up to such Canadian Revolving Lender's Canadian Revolving Committed
Amount.
"Canadian Revolving Commitment Percentage" means, for each Canadian
Revolving Lender, the percentage identified as its Canadian Revolving Commitment
Percentage on Schedule 2.1(a), as
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such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"Canadian Revolving Committed Amount" shall mean the amount, expressed in
U.S. Dollars, of each Canadian Revolving Lender's Canadian Revolving Commitment
as specified on Schedule 2.2(a), as such amount may be adjusted from time to
time in accordance with the provisions hereof.
"Canadian Revolving Lender" means as of any date of determination, any
Canadian Lender holding a Canadian Revolving Commitment on such date.
"Canadian Revolving Loans" means Revolving Loans made to the Canadian
Borrower under Section 2.2, including Bankers' Acceptance Advances.
"Canadian Revolving Note" or "Canadian Revolving Notes" shall mean the
promissory notes of the Canadian Borrower provided pursuant to Section 2.2(e) in
favor of each of the Canadian Revolving Lenders evidencing the Canadian
Revolving Loans, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, restated, supplemented, extended,
renewed or replaced from time to time.
"Canadian Security Agreement" shall mean the Canadian Security Agreement
dated as of the Closing Date given by the Canadian Borrower, the Company and the
other Canadian Credit Parties, for the benefit of the Canadian Lenders, as
amended, modified or supplemented from time to time in accordance with its
terms.
"Canadian Security Documents" shall mean collectively (a) the Canadian
Security Agreement and (b) any other documents executed and delivered in
connection with the granting, attachment and perfection of the Canadian Lenders'
security interests and liens arising thereunder in the Canadian Collateral,
including, without limitation, PPSA and RPMRR (Quebec) financing statements.
"Canadian Swingline Commitment" shall mean the commitment of the Canadian
Swingline Lender to make Canadian Swingline Loans in an aggregate principal
amount at any time outstanding up to the Dollar Amount of the Canadian Swingline
Committed Amount, and the commitment of the Canadian Revolving Lenders to
purchase participation interests in the Canadian Swingline Loans as provided in
Section 2.4-A(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Canadian Swingline Committed Amount" shall mean the Dollar Amount of the
Canadian Swingline Lender's Canadian Swingline Commitment as specified in
Section 2.4-A(a).
"Canadian Swingline Lender" shall mean Bank of America, N.A., acting
through its Canada Branch, in its capacity as such, or any successor Canadian
swingline lender hereunder.
"Canadian Swingline Loan" or "Canadian Swingline Loans" shall have the
meaning set forth in Section 2.4-A(a).
"Canadian Swingline Mandatory Borrowing" shall have the meaning set forth
in Section 2.4-A(b)(ii).
7
"Canadian Swingline Note" shall mean the promissory note of the Canadian
Borrower in favor of the Canadian Swingline Lender evidencing the Canadian
Swingline Loans provided pursuant to Section 2.4-A(d), as such promissory note
may be amended, modified, supplemented, extended, renewed or replaced from time
to time.
"Capital Assets" means, collectively, for any Person, all fixed assets,
whether tangible or intangible determined in accordance with GAAP.
"Capital Lease" means, as applied to any Person, any lease of any Property
(whether real, personal or mixed) by such Person as lessee which would, in
accordance with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person, other than, in the case of a
Consolidated Company, any such lease under which another Consolidated Company is
the lessor.
"Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the rental and other obligations of the lessee thereunder which would,
in accordance with GAAP, appear on a balance sheet of such lessee in respect of
such Capital Lease.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distribution of assets of, the issuing Person.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America, Canada or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America or Canada is pledged in support thereof) having maturities of
not more than twelve months from the date of acquisition ("Government
Obligations"), (ii) U.S. Dollar or Canadian Dollar denominated (or foreign
currency fully hedged) time deposits, certificates of deposit, Eurodollar time
deposits and Eurodollar certificates of deposit of (A) any United States or
Canadian commercial bank of recognized standing having capital and surplus in
excess of a Dollar Amount of U.S.$250,000,000 or (B) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of a Dollar
Amount of U.S.$500,000,000 for direct obligations issued by or fully guaranteed
by the United States of America or Canada, (v) obligations of any state of the
United States, and province of Canada or any political subdivision thereof for
the payment of the principal and redemption price of and interest on which there
shall have been irrevocably deposited Government Obligations maturing as to
principal and interest at times and in amounts sufficient to provide such
payment and (vi) Investments, classified in accordance with GAAP as current
assets of the Company or its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, as amended, that are
administered by financial institutions that have the highest rating obtainable
from either Moody's
8
or S&P, and the portfolios of which are limited solely to Investments (A) in
corporate obligations having a remaining maturity of less than two years, issued
by corporations having outstanding comparable obligations that are rated in the
two highest categories of Moody's and S&P or no lower than the two highest long
term debt ratings categories of either Moody's or S&P or (B) of the character,
quality and maturity described in clauses (i)-(v) of this definition
"CDOR Rate" means, on any day on which Bankers' Acceptances are to be
issued pursuant hereto, the per annum rate of interest which is the rate
determined as being the arithmetic average of the annual yield rates applicable
to Canadian bankers' acceptances having identical issue and comparable maturity
dates as the Bankers' Acceptances proposed to be issued by the Canadian Borrower
displayed and identified as such on the display referred to as the "CDOR Page"
(or any display substituted therefore) of Reuters Monitor Money Services as of
approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day (as adjusted by the
Canadian Agent in good faith after 10:00 a.m. (Toronto time) to reflect any
error in a posted rate or in the posted average annual rate).
"Change in Control" shall mean, as applied to the Company, that, during
any period of twelve (12) consecutive calendar months (i) more than fifty
percent (50%) of the members of the Board of Directors of the Company who were
members on the first day of such period shall have resigned or been removed or
replaced, other than as a result of death, disability, or change in personal
circumstances, or (ii) any Person or "Group" (as defined in Section 13(d)(3) of
the Exchange Act, but excluding (A) any employee benefit or stock ownership
plans of the Company, and (B) members of the Board of Directors and executive
officers of the Company as of the date of this Agreement, members of the
immediate families of such members and executive officers, and family trusts and
partnerships established by or for the benefit of any of the foregoing
individuals) shall have acquired more than fifty percent (50%) of the combined
voting power of all classes of common stock of the Company, except that the
Company's purchase of its common stock outstanding on the date hereof which
results in one or more of the Company's shareholders of record as of the date of
this Agreement controlling more than fifty percent (50%) of the combined voting
power of all classes of the common stock of the Company shall not constitute an
acquisition hereunder.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" shall mean collectively, the U.S. Collateral and the Canadian
Collateral.
"Commitment" means the U.S Revolving Commitment, the Canadian Revolving
Commitment, the LOC Commitment, the Term Loan Commitment, the U.S. Swingline
Commitment, the Canadian Swingline Commitment, individually or collectively, as
appropriate.
"Commitment Fee" has the meaning set forth in Section 2.10(a).
"Commitment Percentage" means the U.S. Revolving Commitment Percentage,
the Canadian Revolving Commitment Percentage, the Term Loan Commitment
Percentage and/or the LOC Commitment Percentage.
9
"Commitment Period" means (i) with respect to U.S. Revolving Loans and the
Canadian Revolving Loans, the period from and including the Closing Date to but
excluding the Maturity Date and (ii) with respect to Letters of Credit, the
period from and including the Closing Date to but excluding the date that is 5
days prior to the Maturity Date.
"Commitment Transfer Supplement" means a Commitment Transfer Supplement
substantially in the form of Schedule 9.6(c).
"Company" has the meaning specified in the introductory paragraph hereof.
"Consolidated Assets" means, at any time, the amount representing the
assets of the Company and the Subsidiaries that would appear on a consolidated
balance sheet of the Company and its Subsidiaries at such time prepared in
accordance with GAAP.
"Consolidated Capital Expenditures" means for any period for the
Consolidated Companies on a consolidated basis, all capital expenditures made
during such period, as determined in accordance with GAAP; provided, however,
that Consolidated Capital Expenditures shall not include Permitted Acquisitions.
"Consolidated Companies" shall mean, collectively, the Company, the
Canadian Borrower, all of the Restricted Subsidiaries, and to the extent
required to be consolidated under GAAP, any Permitted Joint Venture.
"Consolidated Funded Debt" shall mean the Funded Debt of the Consolidated
Companies on a consolidated basis.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (i) EBITDA for the period of the four prior fiscal
quarters ending on such date to (ii) Consolidated Interest Expense paid or
payable in cash during such period.
"Consolidated Interest Expense" means, for any period, all Interest
Expense of the Consolidated Companies net of interest income of the Consolidated
Companies determined on a consolidated basis in accordance with GAAP; provided,
however, that, for the purposes of calculating the Consolidated Interest
Coverage Ratio as of the last day of each of the fiscal quarters ending June 30,
2005, September 30, 2005, December 31, 2005 and March 31, 2006, Consolidated
Interest Expense shall be calculated as follows: (i) Consolidated Interest
Expense for the four fiscal quarter period ending June 30, 2005 shall be the sum
of (A) Consolidated Interest Expense for the period beginning July 1, 2004 and
ending June 5, 2005 (which shall be calculated giving pro forma effect to the
Acquisition and all financings related thereto), calculated in accordance with
the methodology applied by the Company in its financial statements filed with
the SEC, plus (B) Consolidated Interest Expense for the period beginning June 6,
2005 and ending June 30, 2005; (ii) Consolidated Interest Expense for the four
fiscal quarter period ending September 30, 2005 shall be the sum of (A)
Consolidated Interest Expense for the period beginning October 1, 2004 and
ending June 5, 2005 (which shall be calculated giving pro forma effect to the
Acquisition and all financings related thereto), calculated in accordance with
the methodology applied by the Company in its financial statements filed with
the SEC, plus (B) Consolidated Interest Expense for the period beginning June 6,
2005 and ending September 30, 2005; (iii) Consolidated Interest Expense for the
four fiscal quarter period ending December 31, 2005 shall be the sum of (A)
Consolidated Interest Expense for the
10
period beginning January 1, 2005 and ending June 5, 2005 (which shall be
calculated giving pro forma effect to the Acquisition and all financings related
thereto), calculated in accordance with the methodology applied by the Company
in its financial statements filed with the SEC), plus (B) Consolidated Interest
Expense for the period beginning June 6, 2005 and ending December 31, 2005; and
(iv) Consolidated Interest Expense for the four fiscal quarter period ending
March 31, 2006 shall be the sum of (A) Consolidated Interest Expense for the
period beginning April 1, 2005 and ending June 5, 2005 (which shall be
calculated giving pro forma effect to the Acquisition and all financings related
thereto), calculated in accordance with the methodology applied by the Company
in its financial statements filed with the SEC, plus (B) Consolidated Interest
Expense for the period beginning June 6, 2005 and ending March 31, 2006.
"Consolidated Net Income" shall mean the net income of the Consolidated
Companies on a consolidated basis as defined according to GAAP minus (to the
extent included in net income) the sum of (i) any net loss or net income of any
Unrestricted Subsidiary that is not a Consolidated Company, (ii) the net income
or loss of any Consolidated Company for any period prior to the date it became a
Consolidated Company as a result of any Permitted Acquisition, (iii) the gain or
loss (net of any tax effect) resulting from the sale of any Capital Assets by
the Consolidated Companies other than in the ordinary course of business of the
Consolidated Companies, and (iv) other extraordinary items, as defined by GAAP,
of the Consolidated Companies.
"Consolidated Net Worth" means, as of any date of determination, (i) the
shareholders' equity of the Consolidated Companies plus (ii) any OCI charges
related to foreign currency translation, net unrealized loss/gain on derivative
instruments, pension plan liability and repatriation tax, in each case taken
after May 31, 2005, minus (iii) OCI credits related to foreign currency
translation, net unrealized loss/gain on derivative instruments, pension plan
liability and repatriation tax, in each case taken after May 31, 2005. For
purposes of this definition, shareholders' equity shall be determined on a
consolidated basis in accordance with GAAP, as applied on a consistent basis by
the Company in the calculation of such amounts in the Company's most recent
Financial Reports.
"Contractual Obligation" of any Person means any provision of any security
issued by such Person or of any agreement, instrument or undertaking under which
such Person is obligated or by which it or any of the property owned by it is
bound.
"Copyright Licenses" shall mean any written agreement, naming any Credit
Party as licensor, granting any right under any Copyright including, without
limitation, any thereof referred to in Schedule 3.16.
"Copyrights" shall mean (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications in the United
States Copyright office including, without limitation, any thereof referred to
in Schedule 3.16, and (b) all renewals thereof including, without limitation,
any thereof referred to in Schedule 3.16.
"Credit Documents" means a collective reference to this Credit Agreement,
the Notes, the LOC Documents, the Fee Letters, any Joinder Agreement and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto (excluding, however, any Hedging
Agreement).
"Credit Party" means any of the Company, the Canadian Borrower or the
Guarantors.
11
"Credit Party Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Credit Agreement or
any of the other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a filing of a petition of bankruptcy under the
Bankruptcy Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all liabilities
and obligations, whenever arising, owing from any Credit Party or any of its
Subsidiaries to any Hedging Agreement Provider arising under any Hedging
Agreement.
"Debt Issuance" means the incurrence by a Borrower or any Restricted
Subsidiary after the Closing Date of any Indebtedness in any one transaction or
series of related transactions.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time, (i)
has failed to make a Loan required pursuant to the terms of this Credit
Agreement, (ii) has failed to pay to the Administrative Agent or any Lender an
amount owed by such Lender pursuant to the terms of the Credit Agreement or any
other of the Credit Documents, or (iii) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or
similar proceeding.
"Demopolis IDB Bonds" means the industrial development bonds related to
the Demopolis IDB Leasehold Parcel.
"Demopolis IDB Leasehold Parcel" means the leasehold estate in the real
Property located in Demopolis, Alabama, as further described in Section 1.2(e)
of the Purchase Agreement, which leasehold estate is being acquired by Rock-Tenn
Mill Company, LLC pursuant to the Acquisition Documents.
"Determination Date" means with respect to any Extension of Credit:
(a) in connection with the origination of any new Extension of
Credit, the Business Day which is the earliest of the date such credit is
extended, the date the rate is set or the date the bid is accepted, as
applicable;
(b) in connection with any extension or conversion or continuation
of an existing Loan, the last Business Day of each month or the Business
Day which is the earlier of the date such advance is extended, converted
or continued, or the date the rate is set, as applicable, in connection
with any extension, conversion or continuation;
(c) in connection with any extension of an existing Letter of
Credit, the last Business Day of each month or the Business Day which is
the date such Letter of Credit is extended; or
(d) the date of any reduction of the Aggregate Revolving Committed
Amount pursuant to the terms of Section 2.9; and
12
in addition to the foregoing, such additional dates not more frequently than
once a month as may be determined by the Administrative Agent. For purposes of
determining availability hereunder, the rate of exchange for Canadian Dollars
shall be the Spot Rate.
"Dollar Amount" shall mean, at any time, (a) with respect to U.S. Dollars
or an amount denominated in U.S. Dollars, such amount and (b) with respect to
Canadian Dollars or an amount denominated in Canadian Dollars, the equivalent
amount thereof in U.S. Dollars as determined by the Administrative Agent at such
time on the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of U.S. Dollars with Canadian Dollars.
"Domestic Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's Domestic Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Agents and the Company as the office of such Lender at which
Base Rate Loans of such Lender are to be made, which shall include with respect
to any Canadian Lender, such Lender's Canadian Lending Office for Base Rate
Loans and Bankers' Acceptance Advances.
"Domestic Subsidiary" means any Subsidiary that is organized and existing
under the laws of the United States or any state or commonwealth thereof or
under the laws of the District of Columbia.
"EBITDA" shall mean for any fiscal period, Consolidated Net Income for
such period plus (a) the following to the extent deducted in determining such
Consolidated Net Income (i) Consolidated Interest Expense, (ii) Income Taxes of
the Consolidated Companies determined in accordance with GAAP, (iii)
depreciation and amortization expense of the Consolidated Companies determined
in accordance with GAAP, in each case for the applicable fiscal period, (iv) any
non-cash charges (other than restructuring charges), including any non-cash
charges for the impairment of goodwill taken pursuant to FASB 142, (v) any cash
restructuring charges and costs actually taken after the Closing Date and
associated with the Gulf States Acquisition or the restructuring of the folding
carton operations of the Consolidated Companies provided that such amounts do
not exceed U.S.$15,000,000 in the aggregate through the Maturity Date, (vi)
other cash restructuring charges and costs actually taken after the Closing Date
provided that such amounts do not exceed U.S.$15,000,000 in the aggregate
through the Maturity Date, (vii) other cash restructuring charges for periods
ended prior to March 31, 2005 provided that such amounts do not exceed
U.S.$6,300,000 in the aggregate; (viii) any non-cash restructuring charges
actually taken so long as such charges are not an accrual for future cash
payments, (ix) any expenses associated with the write up of inventory acquired
in the Gulf States Acquisition to fair market value as required by FSAS 141 and
(x) any charges taken after the Closing Date resulting from the impact of
changes to accounting rules related to the expensing of stock options, and (b)
cash distributions of earnings of Unrestricted Subsidiaries made to a
Consolidated Company to the extent previously excluded in the determination of
Consolidated Net Income by virtue of clause (i) of the respective definitions
thereof; provided, however, that, notwithstanding any other provision to the
contrary contained in this Agreement, for purposes of any calculation made under
the financial covenants set forth in Section 6.1 (including for purposes of the
definition of "Pro Forma Basis" set forth in Section 1.01 and the definition of
"Applicable Rate" set forth in Section 1.1), the portion of total EBITDA for any
applicable period attributable to Consolidated Companies which are not Credit
Parties (without giving effect to any consolidation of Consolidated Companies
which are not Credit Parties) shall not exceed 15% of EBITDA for such period;
and, provided further, and notwithstanding any other provision to the contrary
contained in this Agreement (A) EBITDA for the four fiscal quarter period ending
June 30, 2005 shall be the sum of (I) EBITDA for the period beginning July 1,
2004 and ending June 5, 2005
13
(which shall be calculated giving pro forma effect to the Acquisition and all
financings related thereto), calculated in accordance with the methodology
applied by the Company in its financial statements filed with the SEC, plus (II)
EBITDA for the period beginning June 6, 2005 and ending June 30, 2005; (B)
EBITDA for the four fiscal quarter period ending September 30, 2005 shall be the
sum of (I) EBITDA for the period beginning October 1, 2004 and ending June 5,
2005 (which shall be calculated giving pro forma effect to the Acquisition and
all financings related thereto), calculated in accordance with the methodology
applied by the Company in its financial statements filed with the SEC, plus (II)
EBITDA for the period beginning June 6, 2005 and ending September 30, 2005; (C)
EBITDA for the four fiscal quarter period ending December 31, 2005 shall be the
sum of (I) EBITDA for the period beginning January 1, 2005 and ending June 5,
2005 (which shall be calculated giving pro forma effect to the Acquisition and
all financings related thereto), calculated in accordance with the methodology
applied by the Company in its financial statements filed with the SEC), plus
(II) EBITDA for the period beginning June 6, 2005 and ending December 31, 2005;
and (D) EBITDA for the four fiscal quarter period ending March 31, 2006 shall be
the sum of (I) EBITDA for the period beginning April 1, 2005 and ending June 5,
2005 (which shall be calculated giving pro forma effect to the Acquisition and
all financings related thereto), calculated in accordance with the methodology
applied by the Company in its financial statements filed with the SEC, plus (II)
EBITDA for the period beginning June 6, 2005 and ending March 31, 2006. For the
purposes of this definition, it is understood that, with respect to financial
statements covering periods prior to the Closing Date, the time periods of the
applicable financial statements for the Acquired Businesses will vary slightly
from those for the Company and its Subsidiaries.
"Environmental Laws" means any and all applicable foreign, federal, state,
provincial, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements or any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Credit Agreement.
"Equity Offering" means the issuance by Company, the Canadian Borrower or
any Restricted Subsidiary to any Person other than employees and directors of
the Company or any of its Subsidiaries of (a) shares of its Capital Stock, (b)
any shares of its Capital Stock pursuant to the exercise of options or warrants,
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity or the conversion of any class equity securities to any
other class of equity securities or (d) any options or warrants relating to its
Capital Stock. The term Equity Offering shall not be deemed to include any Asset
Disposition.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with any
Credit Party within the meaning of Section 4001(a)(14) of ERISA, or is a member
of a group which includes any Credit Party and which is treated as a single
employer under subsection (b) or (c) of Section 414 of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA)
14
or a cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Pension Plan amendment as a termination under Sections 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any material liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" means for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" means such term as defined in Section 7.1.
"Exchange Act" means Securities Exchange Act of 1934, as amended.
"Exchange Percentage" shall mean, as to each Lender, a fraction, expressed
as a decimal, in each case determined on the date of occurrence of a Sharing
Event (but before giving effect to any actions to occur on such date pursuant to
Article XII) of which (a) the numerator shall be the sum of (i) the respective
Commitment Percentage of such Lender of (x) the aggregate outstanding principal
of all Revolving Loans and Swingline Loans (taking the Dollar Amount of any
amounts expressed in Canadian Dollars on the date of the occurrence of the
Sharing Event) and (y) the aggregate unreimbursed amount of outstanding Letters
of Credit, and (ii) the respective Commitment Percentage of such Lender of the
aggregate principal amount of the outstanding Term Loan of all Lenders, and (b)
the denominator of which shall be the sum of (x) the aggregate outstanding
principal of all Revolving Loans and Swingline Loans (taking the Dollar Amounts
of any amounts expressed in Canadian Dollars on the date of the occurrence of
the Sharing Event) and (y) the aggregate unreimbursed amount of outstanding
Letters of Credit, and (z) the aggregate principal amount of the outstanding
Term Loan of all Lenders.
"Excluded Debt Issuance" means any Debt Issuance permitted by Section 6.3,
other than a Debt Issuance pursuant to Sections 6.3(i), (j) or (k). For the
purposes of clarification, it is understood and agreed that with respect to any
Debt Issuance incurred (i) in August 2005, the proceeds of which are used to
refinance Indebtedness under the Senior Note Indenture that is maturing in
August of 2005, or (ii) no later than February 1, 2006, the proceeds of which
are used to refinance Revolving Loans or borrowings under a credit facility of a
Permitted Securitization Subsidiary that were made and used in August 2005 in
order to refinance Indebtedness under the Senior Note Indenture that matured in
August of 2005, the first U.S.$75,000,000 of Net Proceeds of such Debt Issuance
shall be deemed to be a refinancing of such Indebtedness permitted by Section
6.3(c) and shall be an "Excluded Debt Issuance". Any additional Net Proceeds of
any such Debt Issuance in excess of $75,000,000 shall be deemed usage of the
basket provided in Section 6.3(j) and shall be applied to the prepayment of the
Loans as provided in Section 2.8(b)(iii).
15
"Excluded Equity Offering" means any Equity Offering by the Borrower in
connection with a conversion of any Indebtedness of the Borrower or any
Restricted Subsidiary to equity and that results in no net receipt of cash
proceeds by the Borrower or any Restricted Subsidiary.
"Existing Facilities" means the credit facilities evidenced by that
certain Credit Agreement dated as of June 30, 2000 (as amended as of April 6,
2001, July 26, 2002, March 31, 2003, and December 7, 2004) among the Company,
the lenders party thereto, SunTrust Bank, as administrative agent, Bank of
America, N.A., as syndication agent, and Wachovia Bank, National Association, as
documentation agent.
"Existing Letters of Credit" means the Letters of Credit listed on
Schedule 1.1C.
"Extension of Credit" means, as to any Lender, the making of a Loan by
such Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.
"Face Amount" means the amount payable to the holder of a Bankers'
Acceptance on the maturity thereof.
"FASB 140" means Statement of Financial Accounting Standards No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishment
of Liabilities"
"FASB 142" means Statement of Financial Accounting Standards No. 142,
"[Goodwill and other Tangible Assets]".
"Federal Funds Rate" means, for any day, the rate of interest per annum
(rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System of the United States
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 such day 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 and
(ii) if no such rate is so published on such next preceding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Agent on such day on such transactions as reasonably determined
by the Administrative Agent.
"Fee Letters" means a collective reference to the Wachovia Fee Letter, the
SunTrust Fee Letter and the Bank of America Fee Letter.
"Fees" means all fees payable pursuant to Section 2.10.
"Financial Reports" means, at a specified date, the most recent financial
statements required to be delivered pursuant to Section 5.7.
"Foreign Subsidiary" means any Subsidiary of the Company that is not a
Domestic Subsidiary.
"Fully Satisfied" means, with respect to the Obligations as of any date,
that, as of such date, (a) all principal of and interest accrued to such date
which constitute Obligations shall have been irrevocably paid in full in cash,
(b) all fees, expenses and other amounts then due and payable which
16
constitute Obligations shall have been irrevocably paid in cash, (c) all
outstanding Letters of Credit shall have been (i) terminated, (ii) fully
irrevocably cash collateralized or (iii) secured by one or more letters of
credit on terms and conditions, and with one or more financial institutions,
reasonably satisfactory to the Issuing Lender and (d) the Commitments shall have
expired or been terminated in full.
"Funded Debt" means, with respect to any Person, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (iv) all obligations of such Person incurred, issued or
assumed as the deferred purchase price of property or services purchased by such
Person (other than trade debt incurred in the ordinary course of business and
due within six months of the incurrence thereof) that would appear as
liabilities on a balance sheet of such Person, (v) the principal portion of all
obligations of such Person under Capital Leases, (vi) the maximum amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person (other than letters of credit issued for the account of
such Person in support of industrial revenue or development bonds that are
already included as Indebtedness of such Person under clause (ii) above) and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(vii) all preferred Capital Stock or other equity interests issued by such
Person and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments prior to the
date six months after the Maturity Date, redemption prior to the date six months
after the Maturity Date or other acceleration, (viii) the principal balance
outstanding under any Synthetic Lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, (ix) all
Indebtedness of others of the type described in clauses (i) through (viii)
hereof secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (x) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person of the type described in clauses (i) through (ix) hereof, and (xi) all
Indebtedness of the type described in clauses (i) through (x) hereof of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer; provided, however, that (A) in the case of the
Consolidated Companies, Funded Debt shall not include (I) intercorporate
obligations solely among the Consolidated Companies, and (II) lease obligations
pledged as collateral to secure the Demopolis IDB Bonds, and (B) with respect to
any Funded Debt of any Permitted Joint Venture that is a Consolidated Company,
the Funded Debt of such Permitted Joint Venture shall be limited to the
Ownership Share of such Funded Debt unless such Funded Debt is recourse to a
Borrower or any Restricted Subsidiary in which event the entire amount of such
Funded Debt shall constitute Funded Debt.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.
"Government Acts" has the meaning set forth in Section 2.19(a).
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
17
"GSD Joint Venture" has the meaning specified in the definition of Gulf
States Acquisition.
"Guarantors" means (i) with respect to the U.S. Obligations, the U.S.
Guarantors, and (ii) with respect to the Canadian Obligations, each of the
foregoing together with the Company and the Canadian Guarantors, and (iii) any
Additional Credit Party that executes a Joinder Agreement, together with their
successors and permitted assigns.
"Guaranty" means the guaranty of the Guarantors set forth in Articles X
and XI.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"Gulf States Acquisition" means the acquisition by the Company and/or one
or more of its Restricted Subsidiaries of (i) substantially all of the assets of
the pulp and paperboard and paperboard and packaging divisions of the Seller
(the "Business", and (ii) the joint venture interest in GSD Packaging, LLC owned
by the Seller (the "GSD Joint Venture," and, collectively with the Business, the
"Acquired Businesses"), in each case pursuant to the Acquisition Documents.
"Gulf States Tangible Assets" means the tangible assets belonging to the
Acquired Businesses and acquired by the Company and/or one or more of its
Restricted Subsidiaries pursuant to the Acquisition Documents.
"Hazardous Substances" means "hazardous substances" as that term is
defined in the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986, and petroleum, including crude oil or any fraction thereof.
"Hedging Agreement Provider" means any Person that enters into a Hedging
Agreement with a Credit Party or any of its Subsidiaries to the extent such
Person is a (i) Lender, (ii) an Affiliate of a Lender or (iii) any other Person
that was a Lender (or an Affiliate of a Lender) at the time it entered into the
Hedging Agreement but has ceased to be a Lender (or whose Affiliate has ceased
to be a Lender) under the Credit Agreement.
"Hedging Agreements" means, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
18
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (iv) all obligations of such Person issued or assumed as
the deferred purchase price of property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and due
within six (6) months of the incurrence thereof) that would appear as
liabilities on a balance sheet of such Person, (v) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (vi) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed; provided that so long as such Indebtedness is
non-recourse to such Person, only the portion of such obligations which is
secured shall constitute Indebtedness hereunder, (vii) all Guaranty Obligations
of such Person with respect to Indebtedness of another Person, (viii) the
principal portion of all obligations of such Person under Capital Leases plus
any accrued interest thereon, (ix) all obligations of such Person under Hedging
Agreements to the extent required to be accounted for as a liability under GAAP,
excluding any portion thereof which would be accounted for as interest expense
under GAAP, (x) the maximum amount of all letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (xi) all
preferred Capital Stock or other equity interest issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments prior to the date six
months after the Maturity Date, redemption prior to the date six months after
the Maturity Date or other acceleration, (xii) the principal balance outstanding
under any Synthetic Lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product plus any accrued interest
thereon, and (xii) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.
"Intellectual Property" shall mean all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses.
"Interbank Reference Rate" means, in respect of any currency, the interest
rate expressed as a percentage per annum which is customarily used by the
Canadian Agent when calculating interest due by it or owing to it arising from
correction of errors in transactions in that currency between it and other
banks.
"Interest Expense" means, with respect to any Person for any period, the
sum of the amount of interest paid or accrued in respect of such period.
"Interest Payment Date" means (a) as to any Base Rate Loan, the last day
of each March, June, September and December and on the Maturity Date, (b) as to
any LIBOR Rate Loan having an Interest Period of three months or less, the last
day of such Interest Period, and (c) as to any LIBOR Rate Loan having an
Interest Period longer than three months, each day which is three months after
the first day of such Interest Period and the last day of such Interest Period.
19
"Interest Period" means, as to any LIBOR Rate Loan, a period of one, two,
three or six months duration, as the Applicable Borrower may elect, commencing
in each case, on the date of the borrowing (including conversions, extensions
and renewals); provided, however, (i) if any Interest Period would end on a day
which is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that in the case of LIBOR Rate Loans where the
next succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (ii) no Interest Period shall extend beyond
the Maturity Date, and (iii) in the case of LIBOR Rate Loans, where an Interest
Period begins on a day for which there is no numerically corresponding day in
the calendar month in which the Interest Period is to end, such Interest Period
shall end on the last day of such calendar month; provided, however, (A) if any
Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day, (B) any Interest
Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month, (C) if the Applicable Borrower
shall fail to give notice as provided above, if the Company, the Company shall
be deemed to have selected an Alternate Base Rate Loan, and if the Canadian
Borrower, the Canadian Borrower shall be deemed to have selected a U.S. Base
Rate Loans to replace the affected LIBOR Rate Loan, (D) any Interest Period in
respect of any Loan that would otherwise extend beyond the Maturity Date is due
on the Maturity Date and (E) no more than eight (8) LIBOR Rate Loans may be in
effect at any time. For purposes hereof, LIBOR Rate Loans with different
Interest Periods shall be considered as separate LIBOR Rate Loans, even if they
shall begin on the same date and have the same duration, although borrowings,
extensions and conversions may, in accordance with the provisions hereof, be
combined at the end of existing Interest Periods to constitute a new LIBOR Rate
Loan with a single Interest Period.
"Investment Grade Status" shall exist at any time when the rating of the
Company's senior non credit-enhanced long-term unsecured debt is at or above
BBB- from Standard & Poor's and at or above Baa3 from Xxxxx'x; provided, that if
either Standard & Poor's or Xxxxx'x changes its system of classification after
the date of this Credit Agreement, Investment Grade Status shall exist at any
time when the rating of the Company's non credit-enhanced senior long-term
unsecured debt is at or above the new rating which most closely corresponds to
the above-specified level under the previous rating system.
"Investment" means, as to any Person, any direct or indirect acquisition
or investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, a Guaranty Obligation incurred for the
benefit of, or purchase or other acquisition of any other Indebtedness or equity
participation or interest in, another Person, including any partnership or joint
venture interest in such other Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute a business unit.
"Issuing Lender" means SunTrust, in its capacity as such, or any successor
issuing lender hereunder.
"Issuing Lender Fees" has the meaning set forth in Section 2.10(c).
20
"Joinder Agreement" means a Joinder Agreement in substantially the form of
Schedule 5.10, executed and delivered by each Person required to become a
Guarantor in accordance with the provisions of Section 5.10.
"Joint Venture" means, with respect to any Person, any corporation or
other entity (including, without limitation, limited liability companies,
partnerships, joint ventures, and associations) regardless of its jurisdiction
of organization or formation, of which some but less than 100% of the total
combined voting power of all classes of Voting Stock or other ownership
interests, at the time as of which any determination is being made, is owned by
such Person, either directly or indirectly through one or more Subsidiaries of
such Person.
"Joint Venture Investment" means the total amount, valued at book value at
the time of contribution, of any paid in capital (including any asset and other
capital contributions but excluding any intangible assets other than patents,
trademarks and copyrights which shall be included) contributed by a Borrower or
any Restricted Subsidiary to any Joint Venture minus any distributions received
by a Borrower or any Restricted Subsidiary from such Joint Venture.
"Lead Arrangers" means Wachovia Capital Markets, LLC and SunTrust Xxxxxxxx
Xxxxxxxx, a division of SunTrust Capital Markets, Inc., each in its capacity as
a joint lead arranger with respect to this Credit Agreement.
"Lenders" means each of the Persons identified as a "Lender" or "Canadian
Lender" on the signature pages hereto, and their successors and assigns.
"Letters of Credit" means any letter of credit issued by the Issuing
Lender pursuant to the terms hereof, as such Letters of Credit may be amended,
restated, modified, extended, renewed or replaced from time to time.
"Letter of Credit Fee" has the meaning set forth in Section 2.10(b).
"Leverage Ratio" means, as of any date of determination, the ratio of (i)
Total Funded Debt as of such date to (ii) EBITDA for the period of the four
prior fiscal quarters ending on such date.
"LIBOR" means:
(i) for any LIBOR Rate Loan made to the Company for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "LIBOR"
shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate
for deposits in U.S. Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%). If, for any reason, neither of such rates is
available, then "LIBOR", in the case of LIBOR Rate Loans made to the
Company, shall mean the rate
21
per annum at which, as determined by the Administrative Agent, U.S.
Dollars in an amount comparable to the Loans then requested are being
offered to leading banks at approximately 11:00 a.m. London time, two (2)
Business Days prior to the commencement of the applicable Interest Period
for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period
selected.
(ii) for any LIBOR Rate Loan made to the Canadian Borrower for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in U.S. Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "LIBOR"
shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in U.S. Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Telerate Page 3750 (or any
successor page), the applicable rate shall be the arithmetic mean of all
such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
If, for any reason, neither of such rates is available, then "LIBOR", in
the case of LIBOR Loans made to the Canadian Borrower, shall mean the rate
per annum at which, as determined by the Canadian Agent, U.S. Dollars in
an amount comparable to the Loans then requested are being offered to
leading banks at approximately 11:00 a.m. London time, two (2) Business
Days prior to the commencement of the applicable Interest Period for
settlement in immediately available funds by leading banks in the London
interbank market for a period equal to the Interest Period selected.
"LIBOR Lending Office" means, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2 (which,
for each Canadian Lender which is an authorized foreign bank for the purposes of
the Bank Act (Canada) shall be an office located in Canada); and thereafter,
such other office of such Lender as such Lender may from time to time specify to
the Agents and the Company as the office of such Lender at which the LIBOR Rate
Loans of such Lender are to be made.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by (i) in the case of LIBOR Loans made to
the Company, the Administrative Agent, and (ii) in the case of LIBOR Loans made
to the Canadian Borrower, the Canadian Agent, in each case pursuant to the
following formula:
LIBOR
LIBOR Rate = -----------------------------------------------
1.00 - Eurodollar Reserve Percentage
For the purposes of clarification, there shall be no
Eurodollar Reserve Percentage applicable to any LIBOR Loan
that is a Canadian Revolving Loan.
"LIBOR Rate Loan" means any Loan bearing interest at a rate determined by
reference to the LIBOR Rate.
22
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any conditional sale or
other title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in the
nature thereof).
"Loan" or "Loans" means a Revolving Loan, a Term Loan, and/or a Swingline
Loan, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"LOC Commitment Percentage" means, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC Committed Amount" means, collectively, the aggregate amount of all of
the LOC Commitments of the Lenders to issue and participate in Letters of Credit
as referenced in Section 2.5 and, individually, the amount of each Lender's LOC
Commitment as specified in Schedule 2.1(a).
"LOC Documents" means, with respect to any Letter of Credit, such Letter
of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed.
"Mandatory Borrowing" with respect to (i) U.S. Swingline Loans, has the
meaning set forth in Section 2.4(b), (ii) with respect to Canadian Swingline
Loans, has the meaning set forth in Section 2.4-A(c) and (iii) with respect to
Letters of Credit, the meaning set forth in Section 2.5(e).
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Credit Parties, taken as a whole, to perform
their obligations under any Credit Document; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against the Credit
Parties, taken as a whole, of the Credit Documents.
"Material Contract" means any contract or other arrangement, whether
written or oral, to which the Company or any of its Subsidiaries is a party as
to which contract the breach, nonperformance or cancellation of such contract by
any party thereto would reasonably be expected to have a Material Adverse
Effect.
23
"Maturity Date" means, with respect to each of the Term Loan, the
Revolving Loans, the Swingline Loans and Letters of Credit, June 6, 2010.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"Mortgage Instruments" shall have the meaning set forth in Section 5.12.
"Mortgage Policies" shall have the meaning set forth in Section 5.12.
"Mortgaged Properties" shall have the meaning set forth in Section 5.12.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"Net Proceeds" means the aggregate cash proceeds received by the Borrowers
or any of the Restricted Subsidiaries in respect of any Equity Offering
(including, without limitation, any cash received upon the sale or other
disposition of any noncash consideration received in any Equity Offering), Debt
Issuance or Asset Disposition, in each case, net of the direct costs relating to
such Equity Offering, Debt Issuance or asset disposition, as the case may be
(including, without limitation, legal, accounting and investment banking fees,
printing, sales and distribution costs and expenses, and sales commissions), and
taxes paid or payable as a result thereof.
"Notional BA Proceeds" means, with respect to a Bankers' Acceptance
Advance, the aggregate Face Amount of the Bankers' Acceptance or face amount of
an Acceptance Note comprising such Bankers' Acceptance Advance, if applicable,
less the aggregate of:
(a) a discount from the aggregate Face Amount of such Bankers'
Acceptance or face amount of such Acceptance Note, as applicable,
calculated in accordance with normal market practices based on the BA Rate
for the term of such Bankers' Acceptance or Acceptance Note, as
applicable; and
(b) the amount of the acceptance fees determined in accordance with
Section 2.2(f) in respect of such Bankers' Acceptance Advance.
"Note" or "Notes" means the U.S. Revolving Notes, the Canadian Revolving
Notes, the U.S. Swingline Note, the Canadian Swingline Note and/or the Term
Note, collectively, separately or individually, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in substantially
the form of Schedule 2.1(b)(i), as required by Section 2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of extension or
conversion in substantially the form of Schedule 2.7, as required by Section
2.7.
24
"Ownership Share" means, with respect to any Permitted Joint Venture, a
Borrower's or any Restricted Subsidiary's relative equity ownership (calculated
as a percentage) in such Permitted Joint Venture determined in accordance with
the applicable provisions of the declaration of trust, articles or certificate
of incorporation, articles of organization, partnership agreement, joint venture
agreement or other applicable organizational document of such Permitted Joint
Venture.
"Participant" means the meaning set forth in Section 9.6(b).
"Participation Interest" means the purchase by a Lender of a participation
interest in Swingline Loans as provided in Section 2.4(b)(ii) and Section
2.4-A(c), as applicable, and in Letters of Credit as provided in Section 2.5(c).
"Patent License" shall mean all agreements, whether written or oral,
providing for the grant by or to a Credit Party of any right to manufacture, use
or sell any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule 3.16.
"Patents" shall mean (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in Schedule 3.16.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Permitted Acquisition" shall mean any Acquisition so long as (i) at the
time of such Acquisition, no Default or Event of Default is in existence, (ii)
such Acquisition has been approved by the board of directors of the Person being
acquired prior to any public announcement thereof, (iii) the Agents shall have
received all items in respect of Collateral acquired in such Acquisition and/or
in respect of any Subsidiary that is formed to effect such Acquisition, required
to be delivered by the terms of Section 5.10 and/or Section 5.11 and (iv) the
Company shall have delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Acquisition on a Pro
Forma Basis, the Leverage Ratio does not exceed (A) the maximum permitted
Leverage Ratio then in effect minus (B) 0.5, as of the most recent fiscal
quarter end for which the Administrative Agent has received the information
required by subsections (a) through (d) of Section 5.7
"Permitted Joint Ventures" means, collectively, (i) the Sonoco Joint
Venture, (ii) the Seven Hills Joint Venture, (iii) the GSD Joint Venture and
(iv) other Joint Ventures; provided, however, that the aggregate amount of the
Joint Venture Investments for all such Joint Ventures described in clauses (i),
(ii), (iii) and (iv) does not exceed at any time outstanding the sum of (A) the
amount of the Joint Venture Investments existing on the Closing Date and set
forth on Schedule 6.10, plus (B) (1) if
25
both before and after giving effect to any Investment made after the Closing
Date, the Company has Investment Grade Status from at least one Rating Agency
and/or (2) the Company shall have delivered to the Administrative Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving effect to any such
Investment after the Closing Date on a Pro Forma Basis, the Leverage Ratio does
not exceed 3.00:1.00 as of the most recent fiscal quarter end for which the
Administrative Agent has received the information required by subsections (a)
through (d) of Section 5.7, U.S.$100,000,000, or (b) in all other cases,
U.S.$30,000,000.
"Permitted Liens" means Liens in respect of Property of the Borrowers and
the Restricted Subsidiaries permitted to exist pursuant to the terms of Section
6.2.
"Permitted Securitization Subsidiary" means any Subsidiary of the Company
that (i) is directly or indirectly wholly-owned by the Company, (ii) is formed
and operated solely for purposes of a Permitted Securitization Transaction,
(iii) is "bankruptcy remote", (iv) has organizational documents which limit the
permitted activities of such Permitted Securitization Subsidiary to the
acquisition of accounts receivable and related rights from the Company or one or
more of its Subsidiaries, the securitization of such accounts receivable and
related rights and activities necessary or incidental to the foregoing and (v)
meets Standard & Poor's Rating Group's requirements for special purpose entities
engaged in securitization of assets.
"Permitted Securitization Transaction" means the transfer by the Company
or one or more of its Restricted Subsidiaries of receivables and rights related
thereto to one or more Permitted Securitization Subsidiaries and the related
financing of such receivables and rights related thereto; provided that (i) such
transaction is treated as a "sale" of receivables under FASB 140, (ii) is
non-recourse to the Company and its Restricted Subsidiaries, except for Standard
Securitization Undertakings and (iii) the aggregate total amount of all
receivables at any time subject to all Permitted Securitization Transactions
shall not exceed U.S.$225,000,000 in the aggregate.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Credit Party or
any ERISA Affiliate is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by the Wachovia as its prime commercial lending rate in effect at
its principal office in Charlotte, North Carolina, with each change in the Prime
Rate being effective on the date such change is publicly announced as effective
(it being understood and agreed that the Prime Rate is a reference rate used by
the Administrative Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged on any extension of
credit by the Administrative Agent to any debtor)."Pro Forma Basis" means, in
connection with the calculation as of the applicable Calculation Date (utilizing
the principles set forth in Section 1.3(c)) of the financial covenants set forth
in Section 6.1(a)-(c) in respect of a proposed transaction (a "Specified
Transaction"), the making of such calculation after giving effect on a pro forma
basis to:
26
(a) the consummation of such Specified Transaction as of the first
day of the applicable Calculation Period;
(b) the assumption, incurrence or issuance of any Indebtedness of a
Borrower or any Restricted Subsidiary (including any Person which became a
Restricted Subsidiary pursuant to or in connection with such Specified
Transaction) in connection with such Specified Transaction, as if such
Indebtedness had been assumed, incurred or issued (and the proceeds
thereof applied) on the first day of such Calculation Period (with any
such Indebtedness bearing interest at a floating rate being deemed to have
an implied rate of interest for the applicable period equal to the rate
which is or would be in effect with respect to such Indebtedness as of the
applicable Calculation Date);
(c) the permanent repayment, retirement or redemption of any
Indebtedness (other than revolving Indebtedness, except to the extent
accompanied by a permanent commitment reduction) by a Borrower or any
Restricted Subsidiary (including any Person which became a Restricted
Subsidiary pursuant to or in connection with such Specified Transaction)
in connection with such Specified Transaction, as if such Indebtedness had
been repaid, retired or redeemed on the first day of such Calculation
Period;
(d) other than in connection with such Specified Transaction, any
assumption, incurrence or issuance of any Indebtedness by a Borrower or
any Restricted Subsidiary after the first day of the applicable
Calculation Period, as if such Indebtedness had been assumed, incurred or
issued (and the proceeds thereof applied) on the first day of such
Calculation Period (with any such Indebtedness bearing interest at a
floating rate being deemed to have an implied rate of interest for the
applicable period equal to the weighted average of the interest rates
actually in effect with respect to such Indebtedness during the portion of
such period that such Indebtedness was outstanding); and
(e) other than in connection with such Specified Transaction, the
permanent repayment, retirement or redemption of any Indebtedness (other
than revolving Indebtedness, except to the extent accompanied by a
permanent commitment reduction) by a Borrower or any Restricted Subsidiary
after the first day of the applicable Calculation Period, as if such
Indebtedness had been repaid, retired or redeemed on the first day of such
Calculation Period.
"Pro Forma Compliance Certificate" means a certificate of a Responsible
Officer of the Borrower delivered to the Administrative Agent in connection with
a Specified Transaction, such certificate to contain reasonably detailed
calculations satisfactory to the Administrative Agent, upon giving effect to the
applicable Specified Transaction on a Pro Forma Basis, of the financial
covenants set forth in Section 6.1(a)-(c) for the applicable Calculation Period.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means that certain Asset Purchase Agreement, dated as
of April 27, 2005, by and between the Company, Rock-Tenn Packaging and
Paperboard, LLC and the Sellers, as amended, modified or supplemented prior to
the Closing Date.
"Purchasing Lenders" has the meaning set forth in Section 9.6(c).
27
"Recovery Event" shall mean theft, loss, physical destruction or damage,
taking or similar event with respect to any property or assets owned by a
Borrower or any of the Restricted Subsidiaries which results in the receipt by a
Borrower or any of the Restricted Subsidiaries of any cash insurance proceeds or
condemnation award payable by reason thereof.
"Register" has the meaning set forth in Section 9.6(d).
"Regulation T, U, or X" means Regulation T, U or X, respectively, of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof.
"Related Fund" means, with respect to any Lender, any fund or trust or
entity that invests in commercial bank loans in the ordinary course of business
and is advised or managed by (i) such Lender, (ii) an Affiliate of such Lender,
(iii) any other Lender or any Affiliate thereof or (iv) the same investment
advisor as any Person described in clauses (i) through (iii) hereof.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Required Lenders" shall mean Lenders holding in the aggregate more than
fifty percent (50%) of (a) the Commitments (and Participation Interests therein)
or (b) if the Commitments have been terminated, the aggregate principal Dollar
Amount (determined as of the most recent Determination Date) of the outstanding
Loans and Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit, of the U.S. Swingline Lender in U.S.
Swingline Loans and of the Canadian Swingline Lender in Canadian Swingline
Loans) provided, however, that if any Lender shall be a Defaulting Lender at
such time, then there shall be excluded from the determination of Required
Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after termination
of the Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.
"Required Canadian Lenders" means shall mean Lenders holding in the
aggregate more than fifty percent (50%) of (a) the Canadian Revolving
Commitments (and Participation Interests therein) or (b) if the Canadian
Revolving Commitments have been terminated, the aggregate principal Dollar
Amount (determined as of the most recent Determination Date) of the outstanding
Canadian Revolving Loans and Participation Interests (including the
Participation Interests of the Canadian Swingline Lender in Canadian Swingline
Loans) provided, however, that if any Canadian Revolving Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Canadian Lenders, Canadian Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender's Commitments, or after termination of the Canadian Revolving
Commitments, the principal balance of the Canadian Obligations owing to such
Defaulting Lender.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its material property is subject.
28
"Responsible Officer" means any of the Chief Executive Officer, Chief
Financial Officer, the Treasurer or the Controller of the Company.
"Restricted Payment" has the meaning specified in Section 6.13.
"Restricted Subsidiary" means (i) any Subsidiary of the Company identified
as such on Schedule 3.13, and (ii) any Subsidiary of the Company created or
acquired after the date of this Credit Agreement other than an Unrestricted
Subsidiary.
"Revaluation Date" means each of the following: (a) each date a LIBOR Rate
Loan denominated in U.S. Dollars is made pursuant to Section 2.1 or Section 2.2;
(b) each date a LIBOR Rate Loan is continued pursuant to Section 2.7; (c) the
last Business Day of each calendar month; and (d) such additional dates as the
Administrative Agent, Canadian Agent or the Required Lenders shall specify.
"Revolving Commitments" means, collectively, the Canadian Revolving
Commitments, the U.S. Revolving Commitments, the LOC Commitment, the U.S.
Swingline Commitment and the Canadian Swingline Commitment.
"Revolving Lender" means, collectively, the Canadian Revolving Lenders and
the U.S Revolving Lenders.
"Revolving Loans" means, collectively, the Canadian Revolving Loans and
the U.S. Revolving Loans.
"Revolving Notes" means, collectively, the Canadian Revolving Notes and
the U.S. Revolving Notes.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"SEC" means the Securities and Exchange Commission.
"Secured Hedging Agreement" means any Hedging Agreement between a Credit
Party and a Hedging Agreement Provider, as amended, restated, amended and
restated, modified, supplemented or extended from time to time.
"Secured Parties" means each of the Lenders, the Issuing Lender, the U.S.
Swingline Lender, the Canadian Swingline Lender, the Administrative Agent, the
Canadian Agent and the Hedging Agreement Providers.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" means "security" as defined in Section 2(1) of the Securities
Act.
"Security Documents" means collectively, the Canadian Security Documents
and the U.S. Security Documents.
29
"Sellers" means, collectively, Gulf States Paper Corporation, GSPC
Enterprises, Inc., Gulf States-Texas, L.L.C. and Gulf States-Texas, L.P.
"Senior Notes" means the Borrower's senior notes issued pursuant to the
Senior Note Indenture.
"Senior Note Indenture" means the Indenture dated as of July 31, 1995
between the Company and SunTrust Bank, N.A. (as successor trustee to Trust
Company Bank).
"Seven Hills Joint Venture" means Seven Hills Paperboard, LLC, a Delaware
limited liability company.
"Sharing Event" shall mean (a) the occurrence of any Event of Default
under Section 7.1(g), (b) the declaration of the termination of any Commitment,
or the acceleration of the maturity of any Loans, in each case in accordance
with Section 7.2 or (c) the failure of any Borrower to pay any principal of, or
interest on, any Loans or any LOC Obligations on the relevant Maturity Date.
"Sonoco Joint Venture" means RTS Packaging, LLC, a Delaware limited
liability company.
"Specified Transaction" has the meaning set forth in the definition of Pro
Forma Basis set forth in this Section 1.01.
"Spot Rate" means, with respect to Canadian Dollars, the rate quoted by
Bank of America, N.A., acting through its Canada Branch, as the spot rate for
the purchase of Canadian Dollars with Dollars through its principal foreign
exchange trading office at approximately 11:00 a.m. on the date (i) such foreign
exchange computation is made in the case of U.S. Base Rate Loans and Canadian
Prime Rate Loans, and (ii) three Business Days prior to the date as of which the
foreign exchange computation is made in the case of LIBOR Rate Loans and
Bankers' Acceptance Advances.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc. and its successors.
"Standard Securitization Undertakings" means (i) any obligations and
undertakings of the Company and any Restricted Subsidiary on terms and
conditions consistent with sale treatment of receivables and that result in a
"sale" of receivables under FASB 140, as in effect on the date of such transfer
and (ii) any obligations and undertakings of the Company not inconsistent with
sale treatment under FASB 140 in connection with the Company's servicing of
receivables.
"Subsidiary" means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power to elect a majority of the directors or
other managers of such corporation, partnership, limited liability company or
other entity (irrespective of whether or not at the time, any class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) are at the time owned by such Person directly or
indirectly through Subsidiaries. Unless otherwise identified, "Subsidiary" or
"Subsidiaries" means Subsidiaries of the Company.
"SunTrust" means SunTrust Bank, and its successors.
30
"SunTrust Fee Letter" means the Fee Letter dated as of May 6, 2005 among
the Company, SunTrust and SunTrust Capital Markets, Inc.
"Swingline Loan" means a U.S. Swingline Loan and/or a Canadian Swingline
Loan, as applicable.
"Swingline Lender" means the U.S. Swingline Lender and/or the Canadian
Swingline Lender, as applicable.
"Synthetic Lease" means any synthetic lease, tax retention operating lease
or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease under GAAP.
"Tax Exempt Certificate" has the meaning set forth in Section 2.18.
"Taxes" has the meaning set forth in Section 2.18.
"Term Loan" has the meaning set forth in Section 2.2(a).
"Term Loan Commitment" means, with respect to each Term Loan Lender, the
commitment of such Term Loan Lender to make its portion of the Term Loan in a
principal amount equal to such Term Loan Lender's Term Loan Commitment
Percentage of the Term Loan Committed Amount (and for purposes of making
determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Term Loan).
"Term Loan Commitment Percentage" means, for any Term Loan Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.1.
"Term Loan Committed Amount" has the meaning set forth in Section 2.2(a).
"Term Loan Lender" means, as of any date of determination, any Lender that
holds a portion of the outstanding Term Loan on such date.
"Term Note" or "Term Notes" means the promissory notes of the Company in
favor of each of the Term Loan Lenders evidencing the portion of the Term Loan
provided pursuant to Section 2.2(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time
"Transfer Effective Date" has the meaning set forth in each Commitment
Transfer Supplement.
"Total Funded Debt" means, without duplication, the sum of: (i)
Consolidated Funded Debt and (ii) Funded Debt of the Permitted Securitization
Subsidiaries.
"Trademark License" shall means any agreement, written or oral, providing
for the grant by or to a Credit Party of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 3.16.
31
"Trademarks" shall mean (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all renewals
thereof, including, without limitation, any thereof referred to in Schedule
3.16.
"Type" means, as to any Loan, its nature as a Base Rate Loan, LIBOR Rate
Loan, U.S. Swingline Loan or Canadian Swingline Loan, as the case may be.
"Unrestricted Subsidiary" means (i) any Permitted Securitization
Subsidiary, (ii) any Permitted Joint Venture and (iii) any Subsidiary which, at
the option of the Company, is designated in writing by the Company to the
Administrative Agent as being an Unrestricted Subsidiary. The Company may
designate a Restricted Subsidiary as an Unrestricted Subsidiary at any time so
long as (A) no Default or Event of Default is in existence or would be caused by
such designation and (B) the Company supplies to the Administrative Agent a
certificate demonstrating pro forma compliance with the financial covenants in
Section 6.1 after giving effect to such designation.
"U.S. Base Rate" means a fluctuating rate of interest per annum which is
equal to the greater of (i) the reference rate of interest (however designated)
of the Canadian Agent for determining interest chargeable by it on U.S. Dollar
commercial loans made in Canada on such day and (ii) 0.50% above the Interbank
Reference Rate on such day.
"U.S. Base Rate Loans" means Revolving Loans made by the Canadian Lenders
in U.S. Dollars accruing interest based on the U.S. Base Rate.
"U.S. Collateral" shall mean a collective reference to the collateral
which is identified in, and at any time will be covered by, the U.S. Security
Documents.
"U.S. Credit Parties" means the Company and the U.S. Guarantors.
"U.S. Dollar Equivalent" means, with respect to any currency, at any date,
the equivalent thereof in U.S. Dollars, calculated on the basis of the
arithmetical mean of the buy and sell spot rate of exchange of the
Administrative Agent for such other currency at 11:00 a.m. on the date on or as
of which such amount is to be determined.
"U.S. Dollars" and "U.S.$" means dollars in lawful currency of the United
States of America.
"U.S. Guarantors" has the meaning specified in the introductory paragraph
hereof.
"U.S. Obligations" means all Credit Party Obligations of the Company and
the U.S. Guarantors.
"U.S. Revolving Commitment" means, with respect to each U.S. Revolving
Lender, the commitment of such U.S. Revolving Lender to make U.S. Revolving
Loans in an aggregate principal Dollar Amount at any time outstanding up to such
U.S Revolving Lender's U.S. Revolving Committed Amount.
32
"U.S. Revolving Commitment Percentage" shall mean, for each U.S. Revolving
Lender, the percentage identified as its U.S. Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6(c).
"U.S. Revolving Committed Amount" shall mean the amount, expressed in U.S.
Dollars, of each U.S. Revolving Lender's Revolving Commitment as specified on
Schedule 2.1(a), as such amount may be adjusted from time to time in accordance
with the provisions hereof.
"U.S. Revolving Lender" means any Lender which has a U.S. Revolving
Commitment.
"U.S. Revolving Loans" has the meaning set forth in Section 2.1.
"U.S. Revolving Note" or U.S. Revolving Notes" means the promissory notes
of the Company provided pursuant to Section 2.1(e) in favor of each of the U.S.
Revolving Lenders evidencing the U.S. Revolving Loans, individually or
collectively, as appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"U.S. Security Agreement" shall mean the U.S. Security Agreement dated as
of the Closing Date given by the Company and the Domestic Subsidiaries to the
Administrative Agent, for the benefit of the Secured Parties, as amended,
modified or supplemented from time to time in accordance with its terms.
"U.S. Security Documents" shall mean the U.S. Security Agreement, the
Mortgage Instruments and any other documents executed and delivered in
connection with the granting, attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder in the U.S. Collateral,
including, without limitation, UCC financing statements.
"U.S. Swingline Commitment" means the commitment of the U.S. Swingline
Lender to make U.S. Swingline Loans in an aggregate principal amount at any time
outstanding up to the Dollar Amount of the U.S. Swingline Committed Amount, and
the commitment of the Lenders to purchase participation interests in the U.S.
Swingline Loans as provided in Section 2.4(b)(ii), as such amounts may be
reduced from time to time in accordance with the provisions hereof.
"U.S. Swingline Committed Amount" means the Dollar Amount of the U.S.
Swingline Lender's U.S. Swingline Commitment as specified in Section 2.4(a).
"U.S. Swingline Lender" means Wachovia, in its capacity as such, or any
successor U.S. swingline lender hereunder
"U.S. Swingline Loan" or "U.S. Swingline Loans" has the meaning set forth
in Section 2.4(a).
"U.S. Swingline Note" means the promissory note of the Company in favor of
the U.S. Swingline Lender evidencing the U.S. Swingline Loans provided pursuant
to Section 2.4(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Voting Stock" means, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of
33
directors (or persons performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a contingency.
"Wachovia" means Wachovia Bank, National Association and its successors.
"Wachovia Fee Letter" means the Fee Letter dated as of May 6, 2005, among
the Company, Wachovia and Wachovia Capital Markets, LLC.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary of which all
of the equity interests (except directors' qualifying shares or shares
aggregating less than 1% of the outstanding shares of such Subsidiary which are
owned by individuals) and voting interests are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such time.
1.2 COMPUTATION OF TIME PERIODS.
All time references in this Credit Agreement and the other Credit
Documents shall be to Charlotte, North Carolina time unless otherwise indicated.
For purposes of computation of periods of time hereunder, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 ACCOUNTING TERMS.
(a) Unless otherwise specified herein, all accounting terms 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 with the most recent audited
consolidated financial statements of Company delivered to the Lenders; provided
that, if the Company shall notify the Administrative Agent that it wishes to
amend any covenant in Section 6.1 to eliminate the effect of any change in GAAP
on the operation of such covenant (or if the Administrative Agent notifies the
Company that the Required Lenders wish to amend Section 6.1 for such purpose),
then the Company's compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Company and the Required Lenders.
(b) The Company shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.7, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
(c) Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 6.1
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.01), (i) after
consummation of any Permitted Acquisition, (A) income statement items and
balance sheet items (whether positive or negative) attributable to the entity or
Property acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, subject to
34
adjustments mutually acceptable to the Company and the Administrative Agent, and
(B) Indebtedness of an acquired entity which is retired in connection with a
Permitted Acquisition shall be excluded from such calculations and deemed to
have been retired as of the first day of such applicable period and (ii) after
consummation of any disposition of Property permitted by Section 6.4, (A) income
statement items and balance sheet items (whether positive or negative)
attributable to the Property disposed of shall be excluded in such calculations
to the extent relating to such applicable period, subject to adjustments
mutually acceptable to the Company and the Administrative Agent and (B)
Indebtedness of an acquired entity which is retired in connection with such
Asset Disposition shall be excluded from such calculations and deemed to have
been retired as of the first day of such applicable period.
1.4 EXCHANGE RATES; CURRENCY EQUIVALENTS.
(a) The Canadian Agent shall determine the Spot Rates as of each
Revaluation Date to be used for calculating the Dollar Amounts of Extensions of
Credit and amounts outstanding hereunder denominated in Canadian Dollars. Such
Spot Rates shall become effective as of such Revaluation Date and shall be the
Spot Rates employed in converting any amounts between the applicable currencies
until the next Revaluation Date to occur. Except for purposes of financial
statements delivered by the Company hereunder or calculating financial covenants
hereunder or except as otherwise provided herein, the applicable amount of any
currency for purposes of the Credit Documents shall be such Dollar Amount as so
determined by the Administrative Agent.
(b) Wherever in this Credit Agreement in connection with an Extension of
Credit, conversion, continuation or prepayment of a Loan, an amount, such as a
required minimum or multiple amount, is expressed in U.S. Dollars, but such
Extension of Credit or Loan is denominated in Canadian Dollars, such amount
shall be the relevant Canadian Dollar Equivalent of such U.S. Dollar amount
(rounded to the nearest C$1,000), as determined by the Canadian Agent.
ARTICLE II
CREDIT FACILITY
2.1 U.S. REVOLVING LOANS.
(a) U.S. Revolving Commitment. During the Commitment Period, subject to
the terms and conditions hereof, each U.S. Revolving Lender severally agrees to
make revolving credit loans in U.S. Dollars ("U.S. Revolving Loans") to the
Company from time to time in an aggregate principal amount not to exceed at any
time outstanding the amount of such U.S. Revolving Lender's U.S. Revolving
Commitment; provided, however, that after giving effect to any such U.S.
Revolving Loans, (i) the aggregate principal Dollar Amount (determined as of the
most recent Determination Date) of outstanding Revolving Loans, Swingline Loans
and LOC Obligations shall not exceed the Aggregate Revolving Committed Amount,
(ii) the aggregate principal Dollar Amount (determined as of the most recent
Determination Date) of the outstanding U.S. Revolving Loans, U.S. Swingline
Loans and LOC Obligations shall not exceed the Aggregate U.S. Revolving
Committed Amount and (iii) the aggregate principal Dollar Amount (determined as
of the most recent Determination Date) of any U.S. Revolving Lender's U.S.
Revolving Commitment Percentage of outstanding U.S. Revolving Loans, U.S.
Swingline Loans and LOC Obligations shall not exceed such U.S. Revolving
Lender's U.S. Revolving Committed Amount. U.S. Revolving Loans may consist of
Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Company may request, and may be
35
repaid and reborrowed in accordance with the provisions hereof; provided,
however, U.S. Revolving Loans made on the Closing Date or on any of the three
Business Days following the Closing Date may only consist of Alternate Base Rate
Loans unless the Company executes a funding indemnity letter in form and
substance reasonably satisfactory to the Administrative Agent. LIBOR Rate Loans
denominated in U.S. Dollars shall be made by each U.S. Revolving Lender at its
LIBOR Lending Office. Alternate Base Rate Loans shall be made by each U.S.
Revolving Lender at its Domestic Lending Office.
(b) U.S. Revolving Loan Borrowings.
(i) Notice of Borrowing. The Company may request a Revolving Loan
borrowing by delivering a written Notice of Borrowing (or telephone notice
promptly confirmed in writing by delivery of a written Notice of
Borrowing, which delivery may be by fax) to Administrative Agent not later
than 11:00 a.m. on the Business Day prior to the date of the requested
borrowing in the case of Alternate Base Rate Loans, and on the third
Business Day prior to the date of the requested borrowing in the case of
LIBOR Rate Loans denominated in U.S. Dollars. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan
is requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed and (D)
whether the borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are
requested, the Interest Period(s) therefor. If the Company shall fail to
specify in any such Notice of Borrowing (1) an applicable Interest Period
in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (2) the Type of Revolving
Loan requested, then such notice shall be deemed to be a request for an
Alternate Base Rate Loan hereunder. Administrative Agent shall give notice
to each U.S. Revolving Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such U.S. Revolving Lender's
share thereof.
(ii) Minimum Amounts. Each U.S. Revolving Loan shall be in a minimum
aggregate Dollar Amount of (A) in the case of LIBOR Rate Loans,
U.S.$5,000,000 and integral multiples of U.S.$1,000,000 in excess thereof
(or the remaining Aggregate U.S. Revolving Committed Amount, if less) and
(B) in the case of Alternate Base Rate Loans, U.S.$1,000,000 and integral
multiples of U.S.$1,000,000 in excess thereof (or the remaining Aggregate
U.S. Revolving Committed Amount, if less).
(iii) Advances. Each U.S. Revolving Lender will make its U.S.
Revolving Commitment Percentage of each U.S. Revolving Loan borrowing
available to the Administrative Agent, for the account of the Company, in
U.S. Dollars and in funds immediately available to the Administrative
Agent, at the Administrative Agent's Office by 1:00 p.m. on the date
specified in the applicable Notice of Borrowing. Such borrowing will then
be made available to the Company by the Administrative Agent by crediting
the account of the Company designated in the Account Designation Letter
hereunder with the aggregate of the amounts made available to the
Administrative Agent by the U.S. Revolving Lenders and in like funds as
received by the Administrative Agent
(c) Repayment. The principal amount of all U.S. Revolving Loans shall be
due and payable in full on the Maturity Date.
36
(d) Interest. Subject to the provisions of Section 2.11, U.S. Revolving
Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as U.S. Revolving
Loans shall be comprised in whole or in part of Alternate Base Rate Loans,
such Alternate Base Rate Loans shall bear interest at a per annum rate
equal to the Alternate Base Rate plus the Applicable Percentage;
(ii) LIBOR Rate Loans. During such periods as U.S. Revolving Loans
shall be comprised in whole or in part of LIBOR Rate Loans, such LIBOR
Rate Loans shall bear interest at a per annum rate equal to the LIBOR Rate
plus the Applicable Percentage.
Interest on U.S. Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) U.S. Revolving Notes. The U.S. Revolving Loans shall be further
evidenced by a duly executed U.S. Revolving Note in favor of each U.S. Revolving
Lender in the form of Schedule 2.1(e), if requested by such U.S. Revolving
Lender.
2.2 CANADIAN REVOLVING LOANS.
(a) Canadian Revolving Commitment. During the Commitment Period, subject
to the terms and conditions hereof, each Canadian Revolving Lender severally
agrees to make revolving credit loans in Canadian Dollars ("Canadian Revolving
Loans") to the Canadian Borrower from time to time in an aggregate principal
amount not to exceed at any time outstanding the amount of such Canadian
Revolving Lender's Canadian Revolving Commitment; provided, however, that after
giving effect to any such Canadian Revolving Loans, (i) the aggregate Dollar
Amount (determined as of the most recent Determination Date) of outstanding
Revolving Loans, Swingline Loans and LOC Obligations shall not exceed the
Aggregate Revolving Committed Amount, (ii) the aggregate principal Dollar Amount
(determined as of the most recent Determination Date) of the outstanding
Canadian Revolving Loans shall not exceed the Aggregate Canadian Revolving
Committed Amount and (iii) the aggregate principal Dollar Amount (determined as
of the most recent Determination Date) of any Canadian Revolving Lender's
Canadian Revolving Commitment Percentage of outstanding Canadian Revolving Loans
shall not exceed such Canadian Revolving Lender's Canadian Revolving Committed
Amount. Canadian Revolving Loans may consist of U.S. Base Rate Loans, Canadian
Prime Rate Loans, LIBOR Rate Loans, Bankers' Acceptance Advances or a
combination thereof, as the Canadian Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof; provided, however, that (i)
no Canadian Revolving Loans shall be made on the Closing Date and (ii) no
Canadian Revolving Loans shall be made hereunder until such time as the Canadian
Credit Parties have delivered to the Canadian Agent such Security Documents as
reasonably requested by the Canadian Agent in order to create and perfect the
Canadian Lender's security interest in Collateral owned by the Canadian Credit
Parties organized in the province of Quebec. Canadian Prime Rate Loans and
Bankers' Acceptance Advances shall be denominated in Canadian Dollars and
Canadian Revolving Loans which are U.S. Base Rate Loans or LIBOR Rate Loans
shall be denominated in U.S. Dollars. LIBOR Rate Loans shall be made by each
Canadian Revolving Lender at its LIBOR Lending Office. Canadian Prime Rate
Loans, Canadian Revolving Loans which are U.S. Base Rate Loans and Bankers'
Acceptance Advances shall be made by each Canadian Revolving Lender at its
Canadian Lending Office. Canadian Revolving Loans may only be made, and Bankers'
Acceptance Advances may only be accepted, by Lenders which are Canadian
37
Lenders. The initial Canadian Lenders are those identified as such on the
signature pages hereto. Any such Lender which should cease to be or to qualify
as a Canadian Lender shall forthwith notify the Canadian Borrower of such event.
(b) Canadian Revolving Loan Borrowings.
(i) Notice of Borrowing. The Canadian Borrower (or the Company on
behalf of the Canadian Borrower) may request a Canadian Revolving Loan
borrowing by written notice (or telephone notice promptly confirmed in
writing which confirmation may be by fax) to the Canadian Agent (with a
copy to the Administrative Agent) not later than 12:00 Noon on (A) the
Business Day prior to the date of the requested borrowing in the case of
U.S. Base Rate Loans and Canadian Prime Rate Loans, (B) the third Business
Day prior to the date of the requested borrowing in the case of Bankers'
Acceptance Advances and (C) the third Business Day prior to the date of
the requested borrowing in the case of LIBOR Rate Loans. Each such Notice
of Borrowing shall be irrevocable and shall specify (A) that a Canadian
Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount to be
borrowed and (D) whether the borrowing shall be comprised of U.S. Base
Rate Loans, Canadian Prime Rate Loans, LIBOR Rate Loans, Bankers'
Acceptance Advances or a combination thereof, and (I) if LIBOR Rate Loans
are requested, the Interest Period therefor, (II) if Bankers' Acceptance
Advances are requested, the BA Period therefor. A form of Notice of
Borrowing (a "Notice of Borrowing") is attached as Schedule 2.1(b)(i). If
the Canadian Borrower shall fail to specify in any such Notice of
Borrowing (1) an applicable Interest Period in the case of a LIBOR Rate
Loan, then such notice shall be deemed to be a request for an Interest
Period of one month, (2) an applicable BA Period for a Bankers' Acceptance
Advance, then such notice shall be deemed to be a request for a BA Period
of one month, or (3) the Type of Canadian Revolving Loan requested, then
such notice shall be deemed to be a request for Canadian Prime Rate Loan
hereunder. The Canadian Agent shall give notice to each Canadian Revolving
Lender promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Canadian Revolving Lender's share thereof.
(ii) Minimum Amounts. Each Canadian Revolving Loan which is a U.S.
Base Rate Loan shall be in a minimum aggregate Dollar Amount of
U.S.$5,000,000 and in integral multiples of U.S.$1,000,000 in excess
thereof (or the remaining amount of the Aggregate Canadian Revolving
Committed Amount, if less). Each Canadian Revolving Loan which is a
Canadian Prime Rate Loan shall be in a minimum aggregate Dollar Amount of
C$5,000,000 and in integral multiples of C$1,000,000 in excess thereof (or
the remaining amount of the Aggregate Canadian Revolving Committed Amount,
if less). Each Canadian Revolving Loan which is a LIBOR Rate Loan shall be
in a minimum aggregate Dollar Amount of U.S.$5,000,000 and in integral
multiples of U.S$1,000,000 in excess thereof (or the remaining amount of
the Aggregate Canadian Revolving Committed Amount, if less). Each Canadian
Revolving Loan which is a Bankers' Acceptance Advance shall be in a
minimum aggregate Dollar Amount of C$5,000,000 and in integral multiples
of C$1,000,000 in excess thereof (or the remaining amount of the Aggregate
Canadian Revolving Committed Amount, if less).
(iii) Advances. Each Canadian Revolving Lender will make its
Canadian Revolving Commitment Percentage of each Canadian Revolving Loan
borrowing available to the Canadian Agent, for the account of the Canadian
Borrower, in U.S. Dollars or Canadian Dollars, as applicable and in funds
immediately available to the Canadian Agent, at the
38
Canadian Agent's Office by 1:00 p.m. on the date specified in the
applicable Notice of Borrowing. Such borrowing will then be made available
to the Canadian Borrower by the Canadian Agent by wiring the aggregate of
the amounts made available to the Canadian Agent by the Canadian Revolving
Lenders and in like funds as received by the Canadian Agent to the account
of the Canadian Borrower specified by the Canadian Borrower in the Account
Designation Letter delivered hereunder.
(c) Repayment. The principal amount of all Canadian Revolving Loans shall
be due and payable in full on the Maturity Date.
(d) Interest and Fees. Subject to the provisions of Section 2.11, Canadian
Revolving Loans shall bear interest as follows:
(i) U.S. Base Rate Loan. During such periods as Canadian Revolving
Loans shall be comprised of U.S. Base Rate Loans, each such U.S. Base Rate
Loan shall bear interest at a per annum rate equal to the U.S. Base Rate
plus the Applicable Percentage;
(ii) Canadian Prime Rate Loans. During such periods as Canadian
Revolving Loans shall be comprised of Canadian Prime Rate Loans, each such
Canadian Prime Rate Loan shall bear interest at a per annum rate equal to
the sum of the Canadian Prime Rate plus the Applicable Percentage;
(iii) LIBOR Rate Loans. During such periods as Canadian Revolving
Loans shall be comprised of LIBOR Rate Loans, such LIBOR Rate Loans shall
bear interest at a per annum rate equal to the LIBOR Rate plus the
Applicable Percentage; and
(iv) Bankers' Acceptance Advances. During such periods as Revolving
Loans shall be comprised of Bankers' Acceptance Advances, each such
Bankers' Acceptance Advance shall bear interest at a per annum rate equal
to the BA Rate plus an acceptance fee determined in accordance with
Section 2.2(f)(ii);
Interest on Canadian Revolving Loans shall be payable in arrears on each
Interest Payment Date, (or in the case of Bankers' Acceptance Advances by
discount on the date of funding of such Bankers' Acceptance Advance).
(e) Notes. The Canadian Revolving Loans shall be further evidenced by a
duly executed Canadian Revolving Note in favor of each Canadian Revolving Lender
in the form of Schedule 2.1(e), if requested by such Canadian Revolving Lender.
(f) Funding of Bankers Acceptances.
(i) Subject to the limitations contained in Section 2.2(a), Section
2.2(b) and this Section 2.2(f), if the Canadian Agent receives from the
Canadian Borrower a Notice of Borrowing or a Notice of
Conversion/Extension requesting a Bankers' Acceptance Advance or an
extension or conversion of a Canadian Prime Rate Loan into a Bankers'
Acceptance Advance, the Canadian Agent shall notify each of the Canadian
Revolving Lenders promptly on the third Business Day prior to the date of
such requested borrowing of such request except that, if the Face Amount
of a Bankers' Acceptance or Acceptance Note which would otherwise be
accepted or purchased by a Canadian Revolving Lender would not be in the
39
amount of C$100,000, or an integral multiple thereof, such Face Amount
shall be increased or reduced by the Canadian Agent in its sole and
unfettered discretion to the nearest integral multiple of C$100,000. Each
BA Lender or Acceptance Lender, as applicable, shall, not later than 12:00
noon (Toronto time) on the date of each Bankers' Advance Acceptance under
the Canadian Revolving Loan (whether in respect of a Notice of Borrowing
or pursuant to a Notice of Conversion/Extension), subject to this Section
2.2(f) and Section 2.2(a), purchase Bankers' Acceptances or Acceptance
Notes of the Canadian Borrower which are presented to it for acceptance or
purchase and which have an aggregate Face Amount equal to such BA Lender's
or Acceptance Lender's pro rata share of the total Bankers' Acceptance
Advance on such date. Concurrent with the acceptance or purchase of
Bankers' Acceptances or Acceptance Notes of the Canadian Borrower as
aforesaid, each BA Lender or Acceptance Lender, as applicable, shall make
available to the Canadian Agent its pro rata portion of the Notional BA
Proceeds with respect to such Bankers' Acceptance. The Canadian Agent
shall, upon fulfillment by the Canadian Borrower of the conditions set out
in Section 4.1 or Section 4.2, as applicable, make such Notional BA
Proceeds available to the Canadian Borrower on the date of such Bankers'
Acceptance Advance by wiring the funds available to the Canadian Agent by
the Canadian Revolving Lenders and in like funds as received by the
Canadian Agent to the account of the Canadian Borrower specified by the
Canadian Borrower in the Account Designation Letter delivered hereunder.
(ii) Acceptance Fees. With respect to each draft and Acceptance Note
of the Canadian Borrower accepted or issued pursuant hereto, the Canadian
Borrower shall pay to the Canadian Agent on behalf of the Canadian
Lenders, in advance, an acceptance fee denominated in Canadian Dollars
calculated at the rate per annum, on the basis of a year of 365 days,
equal to the Applicable Canadian Revolver BA Margin on the Face Amount of
such Bankers' Acceptance or the face amount of such Acceptance Note, as
applicable for its term, being the actual number of days in the period
commencing on the date of acceptance of the Canadian Borrower's draft or
date of issuance of such Acceptance Note and ending on, but excluding the
maturity date of, the Bankers' Acceptance or Acceptance Note. Such
acceptance fees shall be non-refundable and shall be fully earned when
due. Such acceptance fees shall be paid by the Canadian Borrower by
deduction of the amount thereof from what would otherwise be Notional BA
Proceeds funded pursuant to Section 2.2(f).
(iii) Safekeeping of Drafts and Power of Attorney.
(A) The BA Lenders agree that, in respect of the safekeeping
of executed drafts of the Canadian Borrower which are delivered to
them for acceptance hereunder, they shall exercise the same degree
of care that the BA Lenders give to their own property, provided
that the BA Lenders shall not be deemed to be insurers thereof.
(B) To facilitate availment of Bankers' Acceptances, the
Canadian Borrower hereby appoints each BA Lender as its attorney to
sign and endorse on its behalf (in accordance with a Notice of
Borrowing or Notice of Conversion/Extension relating to Bankers'
Acceptances) in handwriting or by facsimile or mechanical signature,
as and when deemed necessary by such BA Lender, blank forms of
Bankers' Acceptances in the form required by the applicable BA
Lender. The Canadian Borrower recognizes and agrees that all
Bankers' Acceptances so signed or endorsed on its behalf by the a BA
Lender shall bind the Canadian Borrower as fully and
40
effectually as if signed in the handwriting of and duly issued by
the proper signing officers of the Canadian Borrower. The BA Lenders
are hereby authorized (in accordance with a Notice of Borrowing or
Notice of Conversion/Extension relating to Bankers' Acceptances) to
issue such Bankers' Acceptances endorsed in blank in such face
amounts as may be determined by them; provided that the aggregate
amount thereof does not exceed the aggregate amount of Bankers'
Acceptances required to be accepted and purchased by such BA
Lenders. Each BA Lender shall not be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any
such instrument except the gross negligence or willful misconduct of
the applicable BA Lender or its officers, employees, agents or
representatives. The applicable BA Lender shall maintain a record
with respect to Bankers' Acceptances (a) received by it in blank
hereunder, (b) voided by it for any reason, (c) accepted and
purchased by it hereunder and (d) cancelled at their respective
maturities.
(iv) Term and Interest Periods. The term of any Bankers' Acceptance
or Acceptance Note shall be specified in the draft and in the Notice of
Borrowing or Notice of Conversion/Extension related thereto and the term
of any Bankers' Acceptance and the term of any Acceptance Note shall be
for a BA Period, unless otherwise agreed to by the Canadian Agent. The
term of each Bankers' Acceptance or Acceptance Note shall mature on a
Business Day. No Bankers' Acceptance or Acceptance Note shall have a
maturity date after the Maturity Date.
(v) Payment on Maturity. The Canadian Borrower shall pay to the
Canadian Agent, for the account of the BA Lenders or Acceptance Lenders,
as applicable, on the maturity date of any Bankers' Acceptance or
Acceptance Note issued by the Canadian Borrower an amount equal to the
Face Amount of such maturing Bankers' Acceptance or the face amount of
such Acceptance Note, as the case may be; provided that the Canadian
Borrower may, at its option, so reimburse the BA Lenders or Acceptance
Lenders, as applicable, in whole or in part, by delivering to the Canadian
Agent no later than 12:00 noon (Toronto time) two (2) Business Days' prior
to the maturity date of a maturing Bankers' Acceptance or Acceptance Note,
as the case may be, a Notice of Conversion/Extension specifying the term
of the Bankers' Acceptance or the Acceptance Note, as the case may be, and
presenting a draft or Acceptance Note to the BA Lenders or Acceptance
Lenders, as applicable for acceptance and purchase resulting, in the case
of reimbursement in whole by replacement Bankers' Acceptance or Acceptance
Note, in the aggregate equal to the Face Amount of the maturing Bankers'
Acceptance or face amount of the maturing Acceptance Note. In the event
that the Canadian Borrower fails to deliver a Notice of
Conversion/Extension and fails to make payment to the Canadian Agent in
respect of the maturing Bankers' Acceptance Advance, the Face Amount of
the maturing Bankers' Acceptances and the face amount of any Acceptance
Note forming part of such Bankers' Acceptance Advance shall be deemed to
be converted to a Canadian Prime Rate Loan on the relevant maturity date.
(vi) Waiver of Days of Grace. The Canadian Borrower renounces and
shall not claim any days of grace for the payment of any Bankers'
Acceptance or Acceptance Notes.
(vii) Special Provisions Relating to Acceptance Notes.
41
(A) The Canadian Borrower and each Canadian Lender hereby
acknowledge and agree that from time to time certain Canadian
Lenders may not be authorized to or may, as a matter of general
corporate policy, elect not to accept and purchase Bankers'
Acceptances, and the Canadian Borrower and each Canadian Lender
agree that any such Canadian Lender may purchase Acceptance Notes of
the Canadian Borrower in accordance with the provisions of Section
2.2(f)(vii)(B) in lieu of accepting and purchasing Bankers'
Acceptances for its account.
(B) In the event that any Canadian Lender described in Section
2.2(f)(vii)(A) above is unable to, or elects as a matter of general
corporate policy not to, accept Bankers' Acceptances hereunder, such
Lender shall not be required to accept Bankers' Acceptances
hereunder, but rather, if the Canadian Borrower requests the
acceptance of such Bankers' Acceptances, then the Canadian Borrower
shall deliver to such BA Lender non-interest bearing promissory
notes (each, an "Acceptance Note") of the Borrower, substantially in
the form of Schedule 2.2(f), having the same maturity as the
Bankers' Acceptances to be accepted and in an aggregate face amount
equal to the Face Amount of such Bankers' Acceptances. Each such
Acceptance Lender hereby agrees to purchase Acceptance Notes from
the Canadian Borrower at a purchase price equal to the Notional BA
Proceeds which would have been applicable if a Bankers' Acceptance
draft had been accepted by it and such Acceptance Notes shall be
governed by the provisions of this Section 2.2(f) as if they were
Bankers' Acceptances.
Notwithstanding the foregoing, unless the Acceptance Lender otherwise
notifies the Canadian Borrower in writing, in lieu of receiving delivery
of Acceptance Notes, such Acceptance Notes shall be uncertificated and
Acceptance Notes shall be evidenced by the account of the Lenders.
(viii) No Market. If the Canadian Agent determines in good faith and
notifies the Canadian Borrower in writing that, by reason of circumstances
affecting the Canadian money market, there is no market for Bankers'
Acceptances, then the right of the Canadian Borrower to request Bankers'
Acceptance Advances shall be suspended until the Canadian Agent determines
that the circumstances causing such suspension no longer exists and the
Administrative Agent so notifies the Canadian Borrower. In such
circumstances, any Notice of Borrowing for a Bankers' Acceptance Advance
which is outstanding shall be cancelled and the Bankers' Acceptance
Advance requested therein shall, at the option of the Canadian Borrower,
either not be made or be made as a Canadian Prime Rate Loan.
(g) Collateralization of Bankers' Acceptances. With respect to the
prepayment or cash collateralization of unmatured Bankers' Acceptances pursuant
to Section 2.8 (it being acknowledged that any requirement to pay or prepay
Bankers' Acceptances prior to their maturity shall be construed as a requirement
to provide cash collateral under this provision), the Canadian Borrower shall
provide for the funding of such unmatured Bankers' Acceptances by paying to and
depositing in a collateral account on terms reasonably satisfactory to the
Canadian Agent and the Borrowers cash collateral for each such unmatured
Bankers' Acceptances in an amount equal to the principal amount at maturity of
such Bankers' Acceptances. Such collateral account shall be held by the Canadian
Agent as security for the obligations of the Canadian Borrower in relation to
such Bankers' Acceptances and the security of the Canadian Agent thereby created
shall rank in priority to all other Liens and adverse claims against such cash
collateral. Such cash collateral shall be applied to satisfy pro tanto the
42
obligations of the Canadian Borrower for such Bankers' Acceptances as they
mature and the Canadian Agent is hereby irrevocably directed by the Canadian
Borrower to apply any such cash collateral to such maturing Bankers'
Acceptances. Amounts held in such collateral account may not be withdrawn by the
Canadian Borrower. If after maturity of the Bankers' Acceptances for which such
funds are held and application by the Canadian Agent of the amounts in such
collateral accounts to satisfy the obligations of the Canadian Borrower
hereunder with respect to the Bankers' Acceptances being repaid, any excess
remains, such excess together with any accrued interest thereon shall be
promptly paid by the Canadian Agent to the Canadian Borrower so long as no
Default or Event of Default is then continuing.
2.3 TERM LOAN.
(a) Term Loan. Subject to the terms and conditions hereof and in reliance
upon the representations and warranties set forth herein, each Term Loan Lender
severally agrees to make available to the Company on the Closing Date such Term
Loan Lender's Term Loan Commitment Percentage of a term loan in U.S. Dollars
(the "Term Loan") in the aggregate principal Dollar Amount of TWO HUNDRED FIFTY
MILLION U.S. DOLLARS (U.S.$250,000,000) (the "Term Loan Committed Amount") for
the purposes hereinafter set forth. The Term Loan may consist of Alternate Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Company may
request; provided that on the Closing Date and on the three Business Days
following the Closing Date the Term Loan shall bear interest at the Alternate
Base Rate unless the Company executes a funding indemnity letter in form and
substance satisfactory to the Administrative Agent. LIBOR Rate Loans shall be
made by each Term Loan Lender at its LIBOR Lending Office and Alternate Base
Rate Loans at its Domestic Lending Office. Amounts repaid or prepaid on the Term
Loan may not be reborrowed.
(b) Repayment of Term Loan. The principal amount of the Term Loan shall be
repaid in twenty (20) consecutive quarterly installments in the amounts as set
forth below as:
Principal Amortization Payment Term Loan
Date Principal Amortization Payment
------------------------------ ------------------------------
September 30, 2005 $ 0
December 31, 2005 $ 0
March 31, 2006 $ 0
June 30, 2006 $ 0
September 30, 2006 $ 6,250,000
December 31, 2006 $ 6,250,000
March 31, 2007 $ 6,250,000
June 30, 2007 $ 6,250,000
September 30, 2007 $ 6,250,000
December 31, 2007 $ 6,250,000
March 31, 2008 $ 6,250,000
June 30, 2008 $ 6,250,000
September 30, 2008 $18,750,000
December 31, 2008 $18,750,000
March 31, 2009 $18,750,000
June 30, 2009 $18,750,000
September 30, 2009 $31,250,000
43
December 31, 2009 $31,250,000
March 31, 2010 $31,250,000
Maturity Date Outstanding principal amount of
the Term Loan
(c) Interest on the Term Loan. Subject to the provisions of Section 2.11,
the Term Loan shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as the Term Loan
shall be comprised of Alternate Base Rate Loans, each such Alternate Base
Rate Loan shall bear interest at a per annum rate equal to the sum of the
Alternate Base Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as the Term Loan shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each Interest
Payment Date.
(d) Term Notes. The Company 's obligation to pay each Term Loan Lender's
Term Loan shall be evidenced, upon such Term Loan Lender's request, by a Term
Note made payable to such Lender in substantially the form of Schedule 2.3(d).
2.4 U.S. SWINGLINE LOAN SUBFACILITY.
(a) U.S. Swingline Commitment. During the Commitment Period, subject to
the terms and conditions hereof, the U.S. Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans in U.S. Dollars to the
Company (each a "U.S. Swingline Loan" and, collectively, the "U.S. Swingline
Loans") for the purposes hereinafter set forth; provided, however, (i) the
aggregate principal Dollar Amount of U.S. Swingline Loans outstanding at any
time shall not exceed TWENTY MILLION U.S. DOLLARS (U.S.$20,000,000) (the "U.S.
Swingline Committed Amount"), and (ii) with regard to the U.S. Revolving Lenders
collectively, the aggregate principal Dollar Amount (determined as of the most
recent Determination Date) of the outstanding U.S. Revolving Loans plus
outstanding U.S. Swingline Loans plus LOC Obligations shall not exceed the
Aggregate U.S. Revolving Committed Amount. U.S. Swingline Loans hereunder may be
repaid and reborrowed in accordance with the provisions hereof.
(b) U.S. Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The U.S. Swingline Lender will
make U.S. Swingline Loans available to the Company on any Business Day upon
request made by the Company not later than 12:00 noon on such Business Day. A
notice of request for a U.S. Swingline Loan borrowing shall be made in the form
of Schedule 2.1(b)(i) with appropriate modifications. U.S. Swingline Loan
borrowings hereunder shall be made in minimum Dollar Amounts of U.S.$100,000 and
in integral amounts of U.S.$100,000 in excess thereof.
(ii) Repayment of U.S. Swingline Loans. Each U.S. Swingline Loan borrowing
shall be due and payable on the Maturity Date. The U.S. Swingline Lender may, at
any time, in its sole discretion, by written notice to the Company and the
Administrative Agent, demand repayment of its
44
U.S. Swingline Loans by way of a U.S. Revolving Loan borrowing, in which case
the Company shall be deemed to have requested a U.S. Revolving Loan borrowing
comprised entirely of Alternate Base Rate Loans in the Dollar Amount of such
U.S. Swingline Loans; provided, however, that, in the following circumstances,
any such demand shall also be deemed to have been given one Business Day prior
to each of (A) the Maturity Date, (B) the occurrence of any Event of Default
described in Section 7.1(e), (C) upon acceleration of the Credit Party
Obligations hereunder, whether on account of an Event of Default described in
Section 7.1(e) or any other Event of Default and (D) the exercise of remedies in
accordance with the provisions of Section 7.2 (each such U.S. Revolving Loan
borrowing made on account of any such deemed request therefor as provided herein
being hereinafter referred to as a "U.S. Mandatory Borrowing"). Each U.S.
Revolving Lender hereby irrevocably agrees to make such U.S. Revolving Loans
promptly upon any such request or deemed request on account of each U.S.
Mandatory Borrowing in the Dollar Amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (A) the amount of
U.S. Mandatory Borrowing may not comply with the minimum amount for borrowings
of U.S. Revolving Loans otherwise required hereunder, (B) whether any conditions
specified in Section 4.2 are then satisfied, (C) whether a Default or an Event
of Default then exists, (D) failure of any such request or deemed request for
U.S. Revolving Loans to be made by the time otherwise required in Section
2.1(b)(i), (E) the date of such U.S. Mandatory Borrowing, or (F) any reduction
in the Aggregate U.S. Revolving Committed Amount or termination of the U.S.
Revolving Commitments immediately prior to such U.S. Mandatory Borrowing or
contemporaneously therewith. In the event that any U.S. Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Company), then each U.S. Revolving Lender
hereby agrees that it shall forthwith purchase (as of the date the U.S.
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Company on or after such date and prior to such purchase) from
the U.S. Swingline Lender such participations in the outstanding U.S. Swingline
Loans as shall be necessary to cause each such Lender to share in such U.S.
Swingline Loans ratably based upon its respective U.S. Revolving Commitment
Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2), provided that (A) all interest payable on
the U.S. Swingline Loans shall be for the account of the U.S. Swingline Lender
until the date as of which the respective participation is purchased, and (B) at
the time any purchase of participations pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the U.S. Swingline
Lender interest on the principal amount of such participation purchased for each
day from and including the day upon which the U.S. Mandatory Borrowing would
otherwise have occurred but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business Days of the
date of the U.S. Mandatory Borrowing, the Federal Funds Effective Rate, and
thereafter at a rate equal to the Alternate Base Rate.
(c) Interest on U.S. Swingline Loans. Subject to the provisions of Section
2.6, U.S. Swingline Loans shall bear interest at a per annum rate equal to the
Alternate Base Rate plus the Applicable Margin for Revolving Loans that are
Alternate Base Rate Loans. Interest on U.S. Swingline Loans shall be payable in
arrears on each Interest Payment Date.
(d) U.S. Swingline Note. The U.S. Swingline Loans shall be evidenced by a
duly executed promissory note of the Company to the U.S. Swingline Lender in the
original Dollar Amount of the U.S. Swingline Committed Amount and substantially
in the form of Schedule 2.4(d).
45
2.4-A CANADIAN SWINGLINE LOAN SUBFACILITY.
(a) The Canadian Swing Line. Subject to the terms and conditions set forth
herein, the Canadian Swingline Lender agrees, in reliance upon the agreements of
the other Canadian Revolving Lenders set forth in this Section 2.4-A, to make
loans (each such loan, a "Canadian Swingline Loan") to the Canadian Borrower
from time to time on any Business Day during the Commitment Period in an
aggregate amount not to exceed at any time outstanding an aggregate Dollar
Amount of TEN MILLION U.S. DOLLARS (U.S.$10,000,000), notwithstanding the fact
that such Canadian Swingline Loans, when aggregated with the outstanding amount
of Canadian Revolving Loans, may exceed the amount of the Canadian Swingline
Lender's Commitment; provided, however, that after giving effect to any Canadian
Swingline Loan, with regard to the Canadian Revolving Lenders collectively, the
aggregate principal Dollar Amount (determined as of the most recent
Determination Date) of the outstanding Canadian Revolving Loans plus outstanding
Canadian Swingline Loans shall not exceed the Aggregate Canadian Revolving
Committed Amount. Within the foregoing limits, and subject to the other terms
and conditions hereof, the Canadian Borrower may borrow under this Section
2.4-A, prepay under Section 2.8, and reborrow under this Section 2.4-A.
Immediately upon the making of a Canadian Swingline Loan, each Canadian
Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Canadian Swingline Lender a risk participation in
such Canadian Swingline Loan in an amount equal to the product of such Lender's
Canadian Revolving Commitment Percentage times the amount of such Canadian
Swingline Loan.
(b) Borrowing Procedures. Each Canadian Swingline Loan shall be made upon
the Canadian Borrower's irrevocable notice to the Canadian Swingline Lender and
the Canadian Agent, which may be given by telephone. Each such notice must be
received by the Canadian Swingline Lender and the Canadian Agent not later than
(x) 1:00 p.m., in the case of a borrowing of Canadian Prime Rate Loans, and (y)
11:00 a.m in the case of a borrowing of U.S. Base Rate Loans, on the requested
borrowing date, and shall specify (i) the amount to be borrowed, which shall be
a minimum of U.S.$100,000 or C$100,000, as the case may be, (ii) the requested
borrowing date, which shall be a Business Day, and (iii) whether the requested
borrowing shall be comprised of U.S. Base Rate Loans or Canadian Prime Rate
Loans. Each such telephonic notice must be confirmed promptly by delivery to the
Canadian Swingline Lender and the Canadian Agent of a written Notice of
Borrowing, appropriately completed and signed by a Responsible Officer of the
Canadian Borrower. Promptly after receipt by the Canadian Swingline Lender of
any telephonic Notice of Borrowing, the Canadian Swingline Lender will confirm
with the Canadian Agent (by telephone or in writing) that the Canadian Agent has
also received such Notice of Borrowing and, if not, the Canadian Swingline
Lender will notify the Canadian Agent (by telephone or in writing) of the
contents thereof. Unless the Canadian Swingline Lender has received notice (by
telephone or in writing) from the Canadian Agent (including at the request of
any Canadian Revolving Lender) prior to 2:00 p.m. on the date of the proposed
Canadian Swingline Loan (A) directing the Canadian Swingline Lender not to make
such Canadian Swingline Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.4-A(a), or (B) that one or more of
the applicable conditions specified in Article IV is not then satisfied, then,
subject to the terms and conditions hereof, the Canadian Swingline Lender will,
not later than 3:00 p.m. on the borrowing date specified in such Notice of
Borrowing, make the amount of its Canadian Swingline Loan available to the
Canadian Borrower at its office by crediting the account of the Canadian
Borrower on the books of the Canadian Swingline Lender in immediately available
funds, or as otherwise directed by the Canadian Borrower.
46
(c) Refinancing of Canadian Swingline Loans.
(i) The Canadian Swingline Lender at any time in its sole and
absolute discretion may request, on behalf of the Canadian Borrower (which
hereby irrevocably authorizes the Canadian Swingline Lender to so request
on its behalf), that each Canadian Revolving Lender make a U.S. Base Rate
Loan or Canadian Prime Rate Loan, as applicable, in an amount equal to
such Canadian Revolving Lender's Canadian Revolving Commitment Percentage
of the amount of Canadian Swingline Loans then outstanding (a "Canadian
Mandatory Borrowing"). Such request shall be made in writing (which
written request shall be deemed to be a Notice of Borrowing for purposes
hereof) and in accordance with the requirements of Section 2.2, without
regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Canadian Revolving Committed Amount and the conditions set forth
in Section 4.2. The Canadian Swingline Lender shall furnish the Canadian
Borrower with a copy of the applicable Notice of Borrowing promptly after
delivering such notice to the Canadian Agent. Each Canadian Revolving
Lender shall make an amount equal to its Canadian Revolving Commitment
Percentage of the amount specified in such Notice of Borrowing available
to the Canadian Agent in immediately available funds, in U.S. Dollars or
Canadian Dollars, as applicable depending on the currency of the
applicable Canadian Swingline Loan being refinanced, for the account of
the Canadian Swingline Lender at the Canadian Agent's office not later
than 1:00 p.m. on the day specified in such Notice of Borrowing,
whereupon, subject to Section 2.4-A(c)(ii), each Canadian Revolving Lender
that so makes funds available shall be deemed to have made a Base Rate
Loan to the Canadian Borrower in such amount. The Canadian Agent shall
remit the funds so received to the Canadian Swingline Lender.
(ii) If for any reason any Canadian Swingline Loan cannot be
refinanced by such a Canadian Mandatory Borrowing in accordance with
Section 2.4-A(c)(i), the request for Base Rate Loans submitted by the
Canadian Swingline Lender as set forth herein shall be deemed to be a
request by the Canadian Swingline Lender that each of the Canadian
Revolving Lenders fund its risk participation in the relevant Canadian
Swingline Loan and each Canadian Revolving Lender's payment to the
Canadian Agent for the account of the Canadian Swingline Lender pursuant
to Section 2.4-A(c)(i) shall be deemed payment in respect of such
participation.
(iii) If any Canadian Revolving Lender fails to make available to
the Canadian Agent for the account of the Canadian Swingline Lender any
amount required to be paid by such Canadian Revolving Lender pursuant to
the foregoing provisions of this Section 2.4-A(c) by the time specified in
Section 2.4-A(c)(i), the Canadian Swingline Lender shall be entitled to
recover from such Canadian Revolving Lender (acting through the Canadian
Agent), on demand, such amount with interest thereon for the period from
the date such payment is required to the date on which such payment is
immediately available to the Canadian Swingline Lender at a rate per annum
equal to the greater of the Interbank Reference Rate and a rate determined
by the Canadian Swingline Lender in accordance with banking industry rules
on interbank compensation. A certificate of the Canadian Swingline Lender
submitted to any Canadian Revolving Lender (through the Canadian Agent)
with respect to any amounts owing under this clause (iii) shall be
conclusive absent manifest error.
(iv) Each Canadian Revolving Lender's obligation to make Canadian
Revolving Loans or to purchase and fund risk participations in Canadian
Swingline Loans pursuant to
47
this Section 2.4-A(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Canadian Revolving Lender
may have against the Canadian Swingline Lender, the Canadian Borrower or
any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that
each Canadian Revolving Lender's obligation to make Canadian Revolving
Loans pursuant to this Section 2.4-A(c) is subject to the conditions set
forth in Section 4.2. No such funding of risk participations shall relieve
or otherwise impair the obligation of the Canadian Borrower to repay
Canadian Swingline Loans, together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Canadian Revolving Lender has purchased
and funded a risk participation in a Canadian Swingline Loan, if the
Canadian Swingline Lender receives any payment on account of such Canadian
Swingline Loan, the Canadian Swingline Lender will distribute to such
Canadian Revolving Lender its Canadian Revolving Commitment Percentage of
such payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Canadian Revolving Lender's
risk participation was funded) in the same funds as those received by the
Canadian Swingline Lender.
(ii) If any payment received by the Canadian Swingline Lender in
respect of principal or interest on any Canadian Swingline Loan is
required to be returned by the Canadian Swingline Lender under any of the
circumstances described in Section 9.5 (including pursuant to any
settlement entered into by the Canadian Swingline Lender in its
discretion), each Canadian Revolving Lender shall pay to the Canadian
Swingline Lender its Canadian Revolving Commitment Percentage thereof on
demand of the Canadian Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to
the Interbank Reference Rate. The Canadian Agent will make such demand
upon the request of the Canadian Swingline Lender. The obligations of the
Canadian Revolving Lenders under this clause shall survive the payment in
full of the Credit Party Obligations and the termination of this Credit
Agreement.
(e) Interest on Canadian Swingline Loans. Subject to the provisions of
Section 2.6, Canadian Swingline Loans shall bear interest at a per annum rate
equal to, at the election of the Canadian Borrower, (i) the U.S. Base Rate plus
the Applicable Margin or (ii) the Canadian Prime Rate plus the Applicable
Margin. Interest on Canadian Swingline Loans shall be payable in arrears on each
Interest Payment Date.
(f) Interest for Account of Canadian Swingline Lender. The Canadian
Swingline Lender shall be responsible for invoicing the Canadian Borrower for
interest on the Canadian Swingline Loans. Until each Canadian Revolving Lender
funds its Base Rate Loan or risk participation pursuant to this Section 2.4-A to
refinance such Canadian Revolving Lender's Canadian Revolving Commitment
Percentage of any Canadian Swingline Loan, interest in respect of such Canadian
Revolving Commitment Percentage shall be solely for the account of the Canadian
Swingline Lender.
(g) Payments Directly to Canadian Swingline Lender. The Canadian Borrower
shall make all payments of principal and interest in respect of the Canadian
Swingline Loans directly to the Canadian Swingline Lender.
48
(h) Repayment of Canadian Swingline Loans. The Canadian Borrower shall
repay each Canadian Swingline Loan on the earlier to occur of (i) the date ten
Business Days after such Loan is made and (ii) the Maturity Date.
(i) Canadian Swingline Note. The Canadian Swingline Loans shall be
evidenced by a duly executed promissory note of the Canadian Borrower to the
Canadian Swingline Lender in the original Dollar Amount of the Canadian
Swingline Committed Amount and substantially in the form of Schedule 2.4-A(h).
2.5 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the U.S Revolving Lenders shall participate in, Letters of Credit for
the account of the Company from time to time upon request in a form acceptable
to the Issuing Lender; provided, however, that (i) the aggregate Dollar Amount
of LOC Obligations shall not at any time exceed SEVENTY FIVE MILLION U.S.
DOLLARS (U.S.$75,000,000) (the "LOC Committed Amount"), (ii) with regard to the
U.S. Revolving Lenders collectively, the aggregate principal Dollar Amount
(determined as of the most recent Determination Date) of the outstanding U.S.
Revolving Loans plus outstanding U.S. Swingline Loans plus LOC Obligations shall
not exceed the Aggregate U.S. Revolving Committed Amount, (iii) all Letters of
Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit shall be
issued for lawful corporate purposes and may be issued as standby letters of
credit, including in connection with workers' compensation and other insurance
programs, commercial letters of credit and trade letters of credit. Except as
otherwise expressly agreed upon by all the Lenders, no Letter of Credit shall
have an original expiry date more than twelve (12) months from the date of
issuance; provided, however, so long as no Default or Event of Default has
occurred and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit
may be extended annually or periodically from time to time on the request of the
Company or by operation of the terms of the applicable Letter of Credit to a
date not more than twelve (12) months from the date of extension; provided,
further, that no Letter of Credit, as originally issued or as extended, shall
have an expiry date extending beyond the date which is six (6) Business Days
prior to the Maturity Date. Each Letter of Credit shall comply with the related
LOC Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day. Any Letters of Credit issued hereunder shall be in a minimum
original face amount of U.S.$100,000 or such lesser amount as the Issuing Lender
may agree. SunTrust shall be the Issuing Lender on all Letters of Credit issued
on or after the Closing Date. All Existing Letters of Credit shall be deemed to
have been issued pursuant hereto, and from and after the Closing Date shall be
subject to and governed by the term and conditions hereof.
(b) Notice and Reports. The request for the issuance of a Letter of Credit
shall be submitted to the Issuing Lender at least five (5) Business Days prior
to the requested date of issuance. The Issuing Lender will promptly upon request
provide to the Administrative Agent for dissemination to the U.S. Revolving
Lenders a detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have occurred
since the date of any prior report, and including therein, among other things,
the account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters
49
of Credit. The Issuing Lender will provide to the Administrative Agent promptly
upon request a summary report of the nature and extent of LOC Obligations then
outstanding.
(c) Participations. Each U.S. Revolving Lender upon issuance of a Letter
of Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in each case
in an amount equal to its LOC Commitment Percentage of the obligations under
such Letter of Credit and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay to the
Issuing Lender therefor and discharge when due, its LOC Commitment Percentage of
the obligations arising under such Letter of Credit. Without limiting the scope
and nature of each U.S. Revolving Lender's participation in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any LOC Document, each such U.S. Revolving Lender
shall pay to the Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Company to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of Credit,
the Issuing Lender will promptly notify the Company and the Administrative
Agent. The Company shall reimburse the Issuing Lender on the day of drawing
under any Letter of Credit (with the proceeds of a U.S. Revolving Loan obtained
hereunder or otherwise) in same day funds as provided herein or in the LOC
Documents. If the Company shall fail to reimburse the Issuing Lender as provided
herein, the unreimbursed amount of such drawing shall bear interest at a per
annum rate equal to the Alternate Base Rate plus the Applicable Percentage.
Unless the Company shall immediately notify the Issuing Lender and the
Administrative Agent of its intent to otherwise reimburse the Issuing Lender,
the Company shall be deemed to have requested a U.S. Revolving Loan in the
amount of the drawing as provided in subsection (e) hereof, the proceeds of
which will be used to satisfy the reimbursement obligations. The Company's
reimbursement obligations hereunder shall be absolute and unconditional under
all circumstances irrespective of any rights of set-off, counterclaim or defense
to payment the Company may claim or have against the Issuing Lender, the
Administrative Agent, the U.S. Revolving Lenders, the beneficiary of the Letter
of Credit drawn upon or any other Person, including without limitation any
defense based on any failure of the Company to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit. The
Issuing Lender will promptly notify the U.S. Revolving Lenders of the amount of
any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in U.S. Dollars and
in immediately available funds, the amount of such U.S. Revolving Lender's LOC
Commitment Percentage of such unreimbursed drawing. With respect to any
unreimbursed drawing that is not fully refinanced by a U.S. Revolving Loan for
any reason, the unreimbursed amount of such drawing shall bear interest at a per
annum rate equal to the Alternate Base Rate plus the Applicable Percentage plus
2%. Such payment shall be made on the day such notice is received by such U.S.
Revolving Lender from the Issuing Lender if such notice is received at or before
2:00 p.m., otherwise such payment shall be made at or before 12:00 noon on the
Business Day next succeeding the day such notice is received. If such U.S.
Revolving Lender does not pay such amount to the Issuing Lender in full upon
such request, such U.S. Revolving Lender shall, on demand, pay to the
Administrative Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such U.S.
Revolving Lender
50
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date of drawing, the Federal Funds Rate
and thereafter at a rate equal to the Alternate Base Rate. Each U.S. Revolving
Lender's obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the Credit Party
Obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Repayment with U.S. Revolving Loans. On any day on which the Company
shall have requested, or been deemed to have requested a U.S. Revolving Loan to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the U.S. Revolving Lenders that a U.S. Revolving Loan has been
requested or deemed requested in connection with a drawing under a Letter of
Credit, in which case a U.S. Revolving Loan borrowing comprised entirely of
Alternate Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall
be immediately made (without giving effect to any termination of the Commitments
pursuant to Section 7.2) pro rata based on each U.S. Revolving Lender's
respective U.S. Revolving Commitment Percentage (determined before giving effect
to any termination of the Commitments pursuant to Section 7.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each U.S. Revolving Lender hereby irrevocably agrees
to make such U.S. Revolving Loans immediately upon any such request or deemed
request on account of each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date notwithstanding
(i) the amount of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) failure for any such request or deemed request for
a Revolving Loan to be made by the time otherwise required in Section 2.1(b)(i),
(v) the date of such Mandatory Borrowing, or (vi) any reduction in the Aggregate
U.S. Revolving Committed Amount after any such Letter of Credit may have been
drawn upon. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code), then each
such U.S. Revolving Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Company on or after such date and prior to such
purchase) its Participation Interests in the LOC Obligations; provided, further,
that in the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Lender's unfunded Participation Interest therein shall bear interest
payable by such Lender to the Issuing Lender upon demand, at the rate equal to,
if paid within two (2) Business Days of such date, the Federal Funds Rate, and
thereafter at a rate equal to the Alternate Base Rate.
(f) Modification, Extension. The issuance of any supplement, modification,
amendment, renewal, or extension to any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
(g) Letter of Credit Governing Law. Unless otherwise expressly agreed by
the Issuing Lender and the Company when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the
51
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance, shall apply to
each commercial Letter of Credit.
2.6 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall,
upon the election of the Required Lenders (except with respect to an Event of
Default occurring under Section 7.1(e), in which case such interest rate
increase shall be immediate) bear interest, payable on demand, at a per annum
rate two percent (2%) greater than the interest rate which would otherwise be
applicable (or if no rate is applicable, whether in respect of interest, fees or
other amounts, then two percent (2%) greater than the Alternate Base Rate plus
the Applicable Percentage).
2.7 CONVERSION OPTIONS.
(a) The Company may, in the case of U.S. Revolving Loans and the Term
Loan, elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate
Loans, by giving the Administrative Agent at least three (3) Business Days'
prior irrevocable written notice of such election. A form of Notice of
Conversion/ Extension is attached as Schedule 2.7. If the date upon which an
Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a
Business Day, then such conversion shall be made on the next succeeding Business
Day and during the period from such last day of an Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were an Alternate
Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be
converted as provided herein, provided that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and is
continuing and (ii) partial conversions shall be in a minimum aggregate
principal Dollar Amount of U.S.$5,000,000 or C$5,000,000, as the case may be, or
a whole multiple Dollar Amount of U.S.$1,000,000 or C$1,000,000, as the case may
be, in excess thereof.
(b) The Canadian Borrower may, in the case of Canadian Revolving Loans,
elect from time to time to convert (i) U.S. Base Rate Loans to LIBOR Rate Loans
or (ii) Canadian Prime Rate Loans to Bankers' Acceptance Advances, by giving the
Canadian Agent at least three (3) Business Days' prior irrevocable written
notice of such election. A form of Notice of Conversion/ Extension is attached
as Schedule 2.7. If the date upon which a U.S. Base Rate Loan is to be converted
to a LIBOR Rate Loan, or a Canadian Prime Rate Loan is to be converted to a
Bankers' Acceptance Advance is not a Business Day, then such conversion shall be
made on the next succeeding Business Day and during the period from such last
day of an Interest Period or BA Period, as applicable, to such succeeding
Business Day such Loan shall bear interest as if it were a U.S. Base Rate Loan
or Canadian Prime Rate Loan, as applicable. All or any part of outstanding U.S.
Base Rate Loans and Canadian Prime Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a LIBOR Rate Loan or
Bankers' Acceptance Advance when any Default or Event of Default has occurred
and is continuing and (ii) partial conversions shall be in an aggregate minimum
principal Dollar Amount of U.S.$5,000,000 or a whole multiple Dollar Amount of
U.S.$1,000,000 in excess thereof.
(c) Any LIBOR Rate Loan or Bankers' Acceptance Advance may be continued as
such upon the expiration of an Interest Period or the BA Period (and the
succeeding BA Period of that
52
continued Bankers' Acceptance Advance shall commence on the first day after the
last day of the BA Period of the Bankers' Acceptance Advance to be continued),
as applicable with respect thereto by compliance by the Applicable Borrower with
the notice provisions contained in Section 2.7(a); provided, that no LIBOR Rate
Loan or Bankers' Acceptance Advance may be continued as such when any Default or
Event of Default has occurred and is continuing, in which case such LIBOR Loan
or Bankers' Acceptance Advance shall (x) in the case of the LIBOR Loan, to the
extent borrowed by the Company, be automatically converted to an Alternate Base
Rate Loan at the end of the applicable Interest Period with respect thereto; (y)
in the case of the LIBOR Loan, to the extent borrowed by the Canadian Borrower
shall be automatically converted to U.S. Base Rate Loans at the end of the
applicable Interest Period with respect thereto and (z) in the case of a
Bankers' Acceptance Advance, shall be automatically converted to a Canadian
Prime Rate Loan. If a Borrower shall fail to give timely notice of an election
to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall (i) to the extent borrowed by
the Company, be automatically converted to an Alternate Base Rate Loan at the
end of the applicable Interest Period with respect thereto and (ii) to the
extent borrowed by the Canadian Borrower, shall be automatically converted to
U.S. Base Rate Loans at the end of the applicable Interest Period with respect
thereto.
2.8 PREPAYMENTS.
(a) Voluntary Prepayments. Revolving Loans, Term Loans and Swingline Loans
may be repaid in whole or in part without premium or penalty; provided that (i)
LIBOR Rate Loans and Bankers' Acceptance Advances may be repaid only upon three
(3) Business Days' prior written notice to (A) in the case of the Company, the
Administrative Agent and (B) in the case of the Canadian Borrower, the Canadian
Agent (who will notify the Administrative Agent), and Base Rate Loans may be
repaid only upon at least one (1) Business Day's prior written notice to (A) in
the case of the Company, the Administrative Agent (who will notify the Canadian
Agent) and (B) in the case of the Canadian Borrower, the Canadian Agent (who
will notify the Administrative Agent), (ii) repayments of LIBOR Rate Loans must
be accompanied by payment of any amounts owing under Section 2.17, and (iii)
partial repayments of the LIBOR Rate Loans shall be in minimum principal Dollar
Amount of U.S.$5,000,000, and in integral multiples of U.S.$1,000,000 in excess
thereof, and (iv) partial repayments of Base Rate Loans shall be in minimum
principal Dollar Amount of U.S.$1,000,000 or C$1,000,000, as the case may be,
and in integral multiples of U.S.$500,000 or C$500,000, as the case may be, in
excess thereof. To the extent that the Company elects to prepay the Term Loan,
amounts prepaid under this Section 2.8(a) shall be applied first pro rata to the
Term Loan (to the remaining principal installments thereof in direct order of
maturities) and then (after the Term Loan has been paid in full) to the
Revolving Loans as the Company may elect, in each case first ratably to any Base
Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period
maturities. All prepayments under this Section 2.8(a) shall be subject to
Section 2.17, but otherwise without premium or penalty. Interest on the
principal amount prepaid shall be payable on the next occurring Interest Payment
Date that would have occurred had such loan not been prepaid or, at the request
of the Administrative Agent, interest on the principal amount prepaid shall be
payable on any date that a prepayment is made hereunder through the date of
prepayment. Amounts prepaid on the Revolving Loans and the Swingline Loans may
be reborrowed in accordance with the terms hereof. Amounts prepaid on the Term
Loan may not be reborrowed.
53
(b) Mandatory Prepayments.
(i) Aggregate Revolving Committed Amount. If at any time after the
Closing Date, the aggregate principal Dollar Amount (determined as of the
most recent Determination Date) of the outstanding U.S. Revolving Loans
plus outstanding U.S. Swingline Loans plus LOC Obligations shall exceed
the Aggregate U.S. Revolving Committed Amount and/or the outstanding
Canadian Revolving Loans plus outstanding Canadian Swingline Loans shall
exceed the Aggregate Canadian Revolving Committed Amount (in each case as
then in effect), the Company immediately shall prepay the applicable Loans
in an amount sufficient to eliminate such excess (such prepayment to be
applied as set forth in clause (vi) below).
(ii) Asset Dispositions. Promptly following any Asset Disposition by
a Borrower or any Restricted Subsidiary, the Company shall prepay the
Loans in an aggregate amount equal to 100% of the Net Proceeds derived
from such Asset Disposition (other than (a) Asset Dispositions occurring
after the Closing Date which do not exceed U.S.$10,000,000 in the
aggregate through the Maturity Date, and (b) Asset Dispositions through or
in connection with a Permitted Securitization Transaction (such prepayment
to be applied as set forth in clause (vi) below).
(iii) Debt Issuances. Immediately upon receipt by a Borrower or any
Restricted Subsidiary of proceeds from any Debt Issuance (other than an
Excluded Debt Issuance), the Company shall prepay the Loans in an
aggregate amount equal to one hundred percent (100%) of the Net Proceeds
of such Debt Issuance to the Lenders (such prepayment to be applied as set
forth in clause (vi) below).
(iv) Equity Offering. Immediately upon receipt by a Borrower or any
Restricted Subsidiary of proceeds from any Equity Offering (other than an
Excluded Equity Offering), the Company shall prepay the Loans in an
aggregate amount equal to one hundred percent (100%) of the Net Proceeds
of such Equity Offering (such prepayment to be applied as set forth in
clause (vi) below).
(v) Recovery Event. To the extent cash proceeds received in
connection with all Recovery Events in any fiscal year exceeds
U.S.$10,000,000 in the aggregate and are not used to acquire fixed or
capital assets in replacement of the assets subject to such Recovery
Events within 180 days of the receipt of such cash proceeds, immediately
following the 180th day, occurring after the receipt of such cash
proceeds, the Company shall prepay the Loans in an aggregate amount equal
to one hundred percent (100%) of such cash proceeds (such prepayment to be
applied as set forth in clause (vi) below).
(vi) Application of Mandatory Prepayments. All amounts required to
be paid pursuant to this Section 2.8(b) shall be applied as follows:
(A) with respect to all amounts prepaid pursuant to Section
2.8(b)(i), first to Swingline Loans (ratably among Canadian
Swingline Loans and U.S. Swingline Loans), and second to the
Revolving Loans (ratably among Canadian Revolving Loans and U.S.
Revolving Loans);
(B) with respect to all amounts prepaid pursuant to clauses
(ii) through (v) of Section 2.8(b), (1) first, pro rata to the Term
Loan (ratably to the remaining
54
principal installments thereof); (2) second, to the Swingline Loans
(ratably among Canadian Swingline Loans and U.S. Swingline Loans)
and (3) third, to the Revolving Loans (ratably among Canadian
Revolving Loans (other than Bankers' Acceptance Advances), U.S.
Revolving Loans and to a cash collateral account in respect of
Bankers' Acceptance Advances) (without a corresponding reduction to
the Revolving Commitments). Within the parameters of the
applications set forth above, prepayments shall be applied first
ratably to Alternate Base Rate Loans and then to LIBOR Rate Loans in
direct order of Interest Period maturities. All prepayments under
this Section 2.8(b) shall be subject to Section 2.17 and be
accompanied by interest on the principal amount prepaid through the
date of prepayment.
(c) Hedging Obligations Unaffected. Any repayment or prepayment made
pursuant to this Section 2.8 shall not affect a Borrower's obligation to
continue to make payments under any Hedging Agreement with a Hedging Agreement
Provider, which shall remain in full force and effect notwithstanding such
repayment or prepayment, subject to the terms of such Hedging Agreement.
(d) Prepayment of LIBOR Rate Loans. Provided that so long as no Event of
Default is in existence to the extent that any such prepayment would create
funding losses under Section 2.17, the portion of such payment that would cause
such funding losses shall not be due and payable until the earliest date on
which no funding losses would occur as a result of such payment (without giving
effect to any continuation or conversion of any Loan).
(e) Application to U.S. Obligations. Notwithstanding any term of this
Section 2.8 or any other term of this Agreement, the Canadian Credit Parties
shall not be required to repay or prepay any U.S. Obligations, and prepayments
or repayments by the Canadian Borrower shall be applied only to Canadian
Swingline Loans and Canadian Revolving Loans.
2.9 TERMINATION AND REDUCTION OF COMMITMENTS; REALLOCATION OF COMMITTED
AMOUNTS.
(a) Voluntary Reductions. The Company (i) shall have the right to
terminate or reduce (either permanently or temporarily) the unused portion of
the Aggregate Revolving U.S. Committed Amount, and (ii) the Canadian Borrower
shall have the right to terminate or reduce (either permanently or temporarily)
the unused portion of the Aggregate Revolving Canadian Committed Amount, in each
case at any time or from time to time upon not less than five (5) Business Days'
prior written notice to the Agents (who shall notify the Lenders thereof as soon
as practicable) of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction which
shall be in a minimum Dollar Amount of U.S.$5,000,000 or a whole multiple of
U.S.$1,000,000 in excess thereof and shall be irrevocable and effective upon
receipt by the Agents, provided that no such reduction or termination shall be
permitted if after giving effect thereto, to any prepayments of the Revolving
Loans and/or Swingline Loans made on the effective date thereof and to any
corresponding increase in the Aggregate Revolving U.S. Committed Amount or the
Aggregate Revolving Canadian Committed Amount, as applicable, pursuant to
Section 2.9(c) on the effective date thereof, (i) the aggregate principal Dollar
Amount (determined as of the most recent Determination Date) of outstanding
Revolving Loans, Swingline Loans and LOC Obligations would exceed the Aggregate
Revolving Committed Amount then in effect, (ii) the aggregate principal Dollar
Amount (determined as of the most recent Determination Date) of the outstanding
U.S. Revolving Loans, U.S. Swingline Loans and LOC Obligations would exceed the
Aggregate U.S. Revolving Committed Amount then in effect or (iii) the aggregate
principal Dollar Amount
55
(determined as of the most recent Determination Date) of the outstanding
Canadian Revolving Loans and Canadian Swingline Loans would exceed the Aggregate
Canadian Revolving Committed Amount then in effect. Delivery by the Applicable
Borrower of a notice of reduction pursuant to this section that is not
accompanied by a simultaneous notice of election reallocate commitments pursuant
to Section 2.09(c) shall be deemed to be a permanent reduction of the Aggregate
Revolving U.S. Committed Amount or Aggregate Canadian Revolving Committed
Amount, as applicable.
(b) Mandatory Reduction. The Revolving Commitments shall terminate
automatically on the Maturity Date.
(c) Reallocation of Committed Amounts. The Borrowers shall have the right
on up to five (5) separate occasions after the Closing Date to (i) cause the
Aggregate U.S. Revolving Committed Amount to be increased by a principal Dollar
Amount corresponding to any reduction of the Aggregate Canadian Revolving
Committed Amount pursuant to Section 2.9(a) and/or (ii) cause the Aggregate
Canadian Revolving Committed Amount to be increased by a principal Dollar Amount
corresponding to any reduction of the Aggregate U.S. Revolving Committed Amount
pursuant to Section 2.9(a), subject, in each case, to satisfaction of the
following conditions precedent:
(i) the Company or the Canadian Borrower, as applicable, shall have
provided prior written notice of such election simultaneously with its
notice of an election to reduce the Aggregate U.S. Revolving Committed
Amount and/or the Aggregate Canadian Revolving Commitment Amount, as
applicable, pursuant to Section 2.9(a).
(ii) no Event of Default shall have occurred and be continuing on
the date on which such increase is to become effective;
(iii) the representations and warranties set forth in Article III of
this Credit Agreement shall be true and correct in all material respects
on and as of the date on which such increase is to become effective; and
(iv) after giving effect to any such increase, to the corresponding
decrease in the Aggregate Canadian Revolving Committed Amount or the
Aggregate U.S. Revolving Committed Amount, as applicable, on the effective
date thereof and to any prepayments of the Revolving Loans and/or
Swingline Loans made on the effective date thereof, (A) the Aggregate U.S.
Revolving Committed Amount shall not exceed a principal Dollar Amount of
U.S.$450,000,000 less the amount of any prior permanent reduction of the
Aggregate U.S. Revolving Committed Amount, (B) the Aggregate Canadian
Revolving Committed Amount shall not exceed a principal Dollar Amount of
U.S.$100,000,000 less the amount of any prior permanent reduction of the
Aggregate Canadian Revolving Committed Amount, (C) the aggregate principal
Dollar Amount (determined as of the most recent Determination Date) of the
outstanding. Revolving Loans, Swingline Loans and LOC Obligations shall
not exceed the Aggregate Revolving Committed Amount then in effect, (D)
the aggregate principal Dollar Amount (determined as of the most recent
Determination Date) of the outstanding U.S. Revolving Loans, U.S.
Swingline Loans and LOC Obligations shall not exceed the Aggregate U.S.
Revolving Committed Amount then in effect and (E) the aggregate principal
Dollar Amount (determined as of the most recent Determination Date) of the
outstanding Canadian Revolving Loans and Canadian Swingline Loans shall
not exceed the Aggregate Canadian Revolving Committed Amount then in
effect.
56
On the effective date of the requested reallocation of Revolving
Commitments pursuant to this Section 2.9(c), the Company shall instruct the
Administrative Agent to convert all then existing U.S. Revolving Loans that are
LIBOR Loans to Alternate Base Rate Loans. The Company acknowledges and agrees
that it shall be responsible for all amounts due and payable pursuant to Section
2.17 hereof as a result of such conversion. In the absence of such instruction
from the Company on the requested conversion date, the notice delivered pursuant
to clause (i) above shall be deemed to be an instruction from the Company to the
Administrative Agent to effect such conversion on the applicable reallocation
date. Upon the effectiveness of an increase or decrease in the Aggregate U.S.
Revolving Committed Amount or the Aggregate Canadian Revolving Committed Amount
pursuant to this Section 2.9(c), the U.S. Revolving Commitment Percentage of
each U.S. Revolving Lender automatically shall be adjusted to give effect to the
corresponding reallocation of U.S. Revolving Commitments of the U.S. Revolving
Lenders that are also Canadian Revolving Lenders to Canadian Revolving
Commitments or to the corresponding reallocation of Canadian Revolving
Commitments of the Canadian Revolving Lenders that are also U.S. Revolving
Lenders to U.S. Revolving Commitments, as applicable. The Administrative Agent
will at such time inform the U.S. Revolving Lenders of their new U.S. Revolving
Commitment Percentage after giving effect to such increase or decrease, as
applicable, and will then cause a reallocation of the then outstanding U.S.
Revolving Loans among the U.S. Revolving Lenders to reflect the adjusted U.S.
Revolving Commitment Percentages by requesting additional funds from or
requiring the payment of funds to, as necessary, each U.S. Revolving Lender
whose U.S. Revolving Commitment Percentage has changed as a result of such
reallocation of Commitments. Upon completion of any such reallocation, the
Company may then request a conversion of outstanding Alternate Base Rate Loans
to LIBOR Rate Loans as provided in Section 2.7. For the purposes of
clarification, with respect to any Canadian Revolving Commitment that is being
provided by an affiliate of a U.S. Revolving Lender, upon a reallocation of
commitments hereunder from the Canadian Revolving Commitments to the U.S.
Revolving Commitments, the Canadian Revolving Commitment of such Canadian
Revolving Lender so reduced shall be reallocated to the U.S. Revolving
Commitment of its affiliate that is a U.S. Revolving Lender (and vice versa in
the case of a reallocation of U.S. Revolving Commitments to the Canadian
Revolving Commitments.)
2.10 FEES.
(a) Commitment Fee.
(i) In consideration of the U.S. Revolving Commitment, the Company
agrees to pay to the Administrative Agent for the ratable benefit of the
U.S. Revolving Lenders a commitment fee (the "U.S. Commitment Fee") in an
amount equal to the Applicable Percentage per annum on the average daily
unused amount of the Aggregate U.S. Revolving Committed Amount then in
effect. For purposes of computation of the U.S. Commitment Fee, LOC
Obligations shall be considered usage of the Aggregate U.S. Revolving
Committed Amount but U.S. Swingline Loans shall not be considered usage of
the Aggregate U.S. Revolving Committed Amount; and
(ii) In consideration of the Canadian Revolving Commitment, the
Canadian Borrower agrees to pay to the Canadian Agent for the ratable
benefit of the Canadian Revolving Lenders a commitment fee (the "Canadian
Commitment Fee") in an amount equal to the Applicable Percentage per annum
on the average daily unused amount of the Aggregate Canadian Revolving
Committed Amount then in effect. For purposes of computation of the
57
Canadian Commitment Fee, Canadian Swingline Loans shall not be considered
usage of the Aggregate Canadian Revolving Committed Amount.
The Commitment Fees shall be payable quarterly in arrears on the last day
of each calendar quarter.
(b) Letter of Credit Fee. In consideration of the LOC Commitments, the
Company agrees to pay to the Administrative Agent, for the ratable benefit of
the U.S. Revolving Lenders (including the Issuing Lender) a fee (the "Letter of
Credit Fee") equal to the Applicable Percentage per annum on the average daily
maximum amount available to be drawn under each Letter of Credit from the date
of issuance to the date of expiration. . The Letter of Credit Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) above, the Company shall pay to the Issuing Lender
for its own account without sharing by the other Lenders (i) a fronting fee of
one-eighth of one percent (0.125%) per annum on the average daily maximum amount
available to be drawn under each such Letter of Credit issued by it, such fee to
be paid on the date of issuance of any Letter of Credit and (ii) the reasonable
and customary charges from time to time of the Issuing Lender with respect to
the amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "Issuing Lender
Fees").
(d) Administrative Agent's Fee. The Company agrees to pay to the
Administrative Agent the annual administrative agent fee as described in the
Wachovia Fee Letter.
2.11 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base Rate Loans,
U.S. Base Rate Loans, Canadian Prime Rate Loans and the acceptance fee payable
in respect of Bankers' Acceptance Advances shall be calculated on the basis of a
year of 365 days (or 366 days, as applicable) for the actual days elapsed. All
other fees, interest and all other amounts payable hereunder shall be calculated
on the basis of a 360 day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrowers and the Lenders of each
determination of a LIBOR Rate on the Business Day of the determination thereof.
Any change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrowers and the
Lenders of the effective date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative Agent or
the Canadian Agent, as applicable, pursuant to any provision of this Credit
Agreement shall be conclusive and binding on the Borrowers and the Lenders in
the absence of manifest error. The Administrative Agent or the Canadian Agent
shall, at the request of the Borrowers, deliver to the Borrowers a statement
showing the computations used by the Administrative Agent or the Canadian Agent,
as applicable, in determining any interest rate.
(c) Interest Act (Canada). Each Borrower hereby acknowledges that the rate
or rates of interest applicable to certain of the Loans and fees as specified
hereunder may be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed. For purposes of the Xxxxxxxx Xxx
00
(Xxxxxx), if interest computed on the basis of a 360 day year is payable for any
part of the calendar year, the equivalent yearly rate of interest may be
determined by multiplying the specified rate of interest by the number of days
(365 or 366) in such calendar year and dividing such product by 360. For the
purpose of the Interest Act (Canada) and any other purpose, (i) the principle of
deemed reinvestment shall not apply to any interest calculation under this
Credit Agreement, and (ii) the rates of interest stipulated in this Credit
Agreement are intended to be nominal rates and not effective rates or yields.
Notwithstanding any other provisions of this Credit Agreement, if the amount of
any interest, premium, fees or other monies or any rate of interest stipulated
for, taken, reserved or extracted under this Credit Agreement would otherwise
contravene the provisions of Section 347 of the Criminal Code (Canada), Section
8 of the Interest Act (Canada) or any successor or similar legislation, or would
exceed the amounts which any Lender is legally entitled to charge and receive
under any law to which such compensation is subject, then such amount or rate of
interest shall be reduced to such maximum amount as would not contravene such
provision; and to the extent that any excess has been charged or received such
Lender shall apply such excess against the outstanding Canadian Revolving Loans
and Canadian Swingline Loans and refund any further excess amount.
2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Each payment on account of an amount due from the Company hereunder or
under any other Credit Document shall be made by the Company to the
Administrative Agent for the pro rata account of the Lenders entitled to receive
such payment as provided herein in the currency in which such amount is
denominated and in such funds as are customary at the place and time of payment
for the settlement of international payments in such currency. Each payment on
account of an amount due from the Canadian Borrower hereunder or under any other
Credit Document shall be made by the Canadian Borrower to the Canadian Agent for
the pro rata account of the Canadian Lenders entitled to receive such payment as
provided herein in the currency in which such amount is denominated and in such
funds as are customary at the place and time of payment for the settlement of
international payments in such currency. Without limiting the terms of the
preceding sentence, accrued interest on any Loans denominated in Canadian
Dollars shall be payable in Canadian Dollars, and accrued interest on Loans
denominated in U.S. Dollars shall be payable in U.S. Dollars, in each case to
the Canadian Agent. The Canadian Agent shall inform the Administrative Agent and
the Administrative Agent shall inform the Canadian Agent, by telecopy as of the
first Business Day of each month, of all principal, interest or fees received
from the Borrowers during the prior month. Upon request, the Administrative
Agent or the Canadian Agent, as applicable will give the Borrowers a statement
showing the computation used in calculating such amount, which statement shall
be presumptively correct in the absence of manifest error. The obligation of the
Borrowers to make each payment on account of such amount in the currency in
which such amount is denominated shall not be discharged or satisfied by any
tender, or any recovery pursuant to any judgment, which is expressed in or
converted into any other currency, except to the extent such tender or recovery
shall result in the actual receipt by the Administrative Agent or the Canadian
Agent, as applicable, of the full amount in the appropriate currency payable
hereunder. The Borrowers agree that its obligation to make each payment on
account of such amount in the currency in which such amount is denominated shall
be enforceable as an additional or alternative claim for recovery in such
currency of the amount (if any) by which such actual receipt shall fall short of
the full amount of such currency payable hereunder, and shall not be affected by
judgment being obtained for such amount.
(b) Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Revolving
Commitment Percentages
59
of the Revolving Lenders. Unless otherwise specified in this Credit Agreement,
each payment under this Credit Agreement or any Note shall be applied (i) first,
to any fees then due and owing by the Borrowers pursuant to Section 2.10, (ii)
second, to interest then due and owing in respect of the Notes of the Borrowers
and (iii) third, to principal then due and owing hereunder and under the Notes
of the Borrowers. Each payment on account of any fees pursuant to Section 2.10
shall be made pro rata in accordance with the respective amounts due and owing.
Each payment (other than voluntary repayments and mandatory prepayments) by the
Borrowers on account of principal of and interest on the Revolving Loans and on
the Term Loan shall be made pro rata according to the respective amounts due and
owing hereunder. Each voluntary repayment and mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.8. All
payments (including prepayments) to be made by the Borrowers on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.18(b)) and shall be made to the
Administrative Agent or the Canadian Agent, as applicable, for the account of
the Lenders at the Administrative Agent's office or Canadian Agent's Office, as
applicable, specified in Section 9.2 and (i) in the case of Loans or other
amounts denominated in U.S. Dollars, shall be made in U.S. Dollars not later
than 12:00 p.m. on the date when due and (ii) in the case of Loans or other
amounts denominated in Canadian Dollars, shall be made in Canadian Dollars not
later than 12:00 p.m. on the date when due. The Administrative Agent and the
Canadian Agent, as applicable, shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans and Bankers' Acceptance
Advances) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate Loan or
Bankers' Acceptance Advances becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(c) Allocation of Payments After Event of Default. Notwithstanding any
other provision of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent, the Canadian Agent or any Lender on
account of the Credit Party Obligations or any other amounts outstanding under
any of the Credit Documents shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Administrative Agent and the Canadian Agent in connection with enforcing
the rights of the Lenders under the Credit Documents;
SECOND, to payment of any fees owed to the Administrative Agent and
the Canadian Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party Obligations
owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest (including, without limitation,
accrued fees and interest arising under any Hedging Agreement with a
Hedging Agreement Provider);
60
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including, without limitation, the payment or
cash collateralization of the outstanding LOC Obligations, and including
with respect to any Hedging Agreement with a Hedging Agreement Provider,
any breakage, termination or other payments due under such Hedging
Agreement with a Hedging Agreement Provider and any interest accrued
thereon;
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (ii) each of the Lenders and/or Hedging Agreement
Providers shall receive an amount equal to its pro rata share (based on the
proportion that the then outstanding Loans, LOC Obligations and Bankers'
Acceptances held by such Lender or the outstanding obligations payable to such
Hedging Agreement Provider bears to the aggregate then outstanding Loans, LOC
Obligations and Bankers' Acceptances and obligations payable under all Hedging
Agreements with a Hedging Agreement Provider) of amounts available to be applied
pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above.
2.13 NON-RECEIPT OF FUNDS BY AN AGENT.
(a) Unless the applicable Agent shall have been notified in writing by a
Lender prior to the date a Loan is to be made by such Lender (which notice shall
be effective upon receipt) that such Lender does not intend to make the proceeds
of such Loan available to such Agent, such Agent may assume that such Lender has
made such proceeds available to such Agent on such date, and such Agent may in
reliance upon such assumption (but shall not be required to) make available to
the Applicable Borrower a corresponding amount. If such corresponding amount is
not in fact made available to such Agent, such Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon such Agent's demand therefor, such Agent
will promptly notify the Applicable Borrower, and such Borrower shall
immediately pay such corresponding amount to such Agent. The applicable Agent
shall also be entitled to recover from the Lender or the Applicable Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by such Agent to the
Applicable Borrower to the date such corresponding amount is recovered by such
Agent at a per annum rate equal to (i) from the Applicable Borrower at the
applicable rate for the applicable borrowing pursuant to the Notice of Borrowing
and (ii) from a Lender at the Federal Funds Rate or the Interbank Reference
Rate, as applicable.
(b) Unless the applicable Agent shall have been notified in writing by the
Applicable Borrower, prior to the date on which any payment is due from it
hereunder (which notice shall be effective upon receipt) that the Applicable
Borrower does not intend to make such payment, such Agent may assume that such
Borrower has made such payment when due, and such Agent may in reliance upon
such assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if such Borrower has not in fact
made such payment to such Agent, such
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Lender shall, on demand, repay to such Agent the amount made available to such
Lender. If such amount is repaid to such Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to such Agent on
demand interest on such amount in respect of each day from the date such amount
was made available by such Agent at a per annum rate equal to, if repaid to such
Agent within two (2) days from the date such amount was made available by such
Agent, the Federal Funds Rate or the Interbank Reference Rate, as applicable,
and thereafter at a rate equal to the Alternate Base Rate.
(c) A certificate of an Agent submitted to a Borrower or any Lender with
respect to any amount owing under this Section 2.13 shall be conclusive in the
absence of manifest error.
2.14 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Credit Agreement, if (a) the
Administrative Agent or the Canadian Agent, as applicable, shall reasonably
determine (which determination shall be conclusive and binding absent manifest
error) that, by reason of circumstances affecting the relevant market,
reasonable and adequate means do not exist for ascertaining LIBOR for such
Interest Period, or (b) the Required Lenders shall reasonably determine (which
determination shall be conclusive and binding absent manifest error) that the
LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of
funding LIBOR Rate Loans that a Borrower has requested be outstanding as a LIBOR
tranche during such Interest Period, the Administrative Agent shall forthwith
give telephone notice of such determination, confirmed in writing, to the
Borrowers, and the Lenders at least two (2) Business Days prior to the first day
of such Interest Period. If such notice is given (a) any LIBOR Rate Loans
requested to be made by the Canadian Borrower on the first day of such Interest
Period shall be made, at the sole option of the Canadian Borrower, in U.S.
Dollars as U.S. Base Rate Loans or such request shall be cancelled, (b) any
affected U.S Base Rate Loans that were to have been converted at the request of
the Canadian Borrower on the first day of such Interest period to, or LIBOR Rate
Loans that were to have been continued as, LIBOR Rate Loans shall be converted
to or continued, at the sole option of the Canadian Borrower, as U.S. Base Rate
Loans, (c) any affected LIBOR Rate Loans denominated in U.S. Dollars requested
to be made by the Company on the first day of such Interest Period shall be
made, at the sole option of the Company, in U.S. Dollars as Alternate Base Rate
Loans or such request shall be cancelled and (d) any affected Loans denominated
in U.S. Dollars that were to have been converted at the request of the Company
on the first day of such Interest Period to or continued as LIBOR Rate Loans
shall be converted to or continued, at the sole option of the Company, as
Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected.
2.15 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for (i) such Lender or its LIBOR Lending Office to make or
maintain LIBOR Rate Loans or (ii) a BA Lender to make or maintain Bankers'
Acceptance Advances, as contemplated by this Credit Agreement or to obtain in
the interbank Eurodollar market through its LIBOR Lending Office the funds with
which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent or the Canadian Agent, as applicable, and the Borrowers
thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or
continue LIBOR Rate Loans as such, or to make Bankers' Acceptance Advances or
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continue Bankers' Acceptance Advances as such, shall forthwith be suspended
until the Administrative Agent or Canadian Agent, as applicable, shall give
notice that the condition or situation which gave rise to the suspension shall
no longer exist, (c) such Lender's Loans then outstanding as LIBOR Rate Loans,
if any, shall be converted to (x) Alternate Base Rate Loans denominated in U.S.
Dollars in the case of Loans to the Company and (y) U.S. Base Rate Loans in the
case of Loans to the Canadian Borrower, in each case, on the last day of the
Interest Period for such Loans or within such earlier period as required by law
to Alternate Base Rate Loans in the case of the Company, and to U.S. Base Rate
Loans in the case of the Canadian Borrower, and (d) such Bankers' Acceptance
Advances shall be converted to Canadian Prime Rate Loans on the last day of the
BA Period. The Applicable Borrower hereby agrees promptly to pay any Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
actual and direct costs (but not including anticipated profits) reasonably
incurred by such Lender including, but not limited to, any interest or fees
payable by such Lender to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans and/or Bankers' Acceptance Advances hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent or the Canadian
Agent, as applicable, to the Applicable Borrower shall be conclusive in the
absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office) to avoid or to
minimize any amounts which may otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by such
Lender in its sole discretion to be material.
2.16 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind whatsoever with
respect to any LIBOR Rate Loan or Bankers' Acceptance Advances made by it,
or change the basis of taxation of payments to such Lender in respect
thereof (except for changes in the rate of tax on the overall net income
of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the LIBOR Rate or BA Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining LIBOR Rate Loans Bankers' or Acceptance Advances or to
reduce any amount receivable hereunder or under any Note, then, in any such
case, the Applicable Borrower shall promptly pay such Lender, upon its demand,
any additional amounts necessary to compensate such Lender for such additional
cost or reduced amount receivable which such Lender reasonably deems to be
material as determined by such Lender with respect to its LIBOR Rate Loans or
Bankers' Acceptance Advance . A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender,
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through the Administrative Agent or Canadian Agent, as applicable, to the
Applicable Borrower shall be conclusive in the absence of manifest error. Each
Lender agrees to use reasonable efforts (including reasonable efforts to change
its Domestic Lending Office or LIBOR Lending Office, as the case may be) to
avoid or to minimize any amounts which might otherwise be payable pursuant to
this subsection (a); provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or regulatory burdens
deemed by such Lender in its sole discretion to be material.
(b) If any Lender shall have reasonably determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender in its sole discretion to be material, then from time to
time, within fifteen (15) days after demand by such Lender, the Applicable
Borrower shall pay to such Lender such additional amount as shall be certified
by such Lender as being required to compensate it for such reduction (but, in
the case of outstanding Base Rate Loans, without duplication of any amounts
already recovered by a Lender by reason of an adjustment in the Alternate Base
Rate, Canadian Prime Rate or U.S. Base Rate, as applicable). Such a certificate
as to any additional amounts payable under this Section submitted by a Lender
(which certificate shall include a description of the basis for the
computation), through the Administrative Agent, to the Borrowers shall be
conclusive absent manifest error.
(c) Failure or delay on the part of any Lender or the Issuing Lender to
demand compensation pursuant to the foregoing provisions of this Section 2.16
shall not constitute a waiver of such Lender's right to demand such
compensation, provided that the the Applicable Borrower shall not be required to
compensate a Lender pursuant to the foregoing provisions of this Section 2.16
for any increased costs incurred or reductions suffered more than six months
prior to the date that such Lender, as the case may be, notifies the Applicable
Borrower of the Requirement of Law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor (except
that, if the Requirement of Law giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof).
(d) The agreements in this Section 2.16 shall survive the termination of
this Credit Agreement and payment of the Notes and all other amounts payable
hereunder.
2.17 INDEMNITY.
The Applicable Borrower hereby agrees to indemnify each Lender and to hold
such Lender harmless from any funding loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in payment of
the principal amount of or interest on any Loan by such Lender in accordance
with the terms hereof, (b) default by such Borrower in accepting a borrowing
after such Borrower has given a notice in accordance with the terms hereof, (c)
default by such Borrower in making any repayment after such Borrower has given a
notice in accordance with the terms hereof, and/or (d) the making by such
Borrower of a repayment or prepayment of a Loan, or
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the conversion thereof, on a day which is not the last day of the Interest
Period with respect thereto, in each case including, but not limited to, any
such loss or expense arising from interest or fees payable by such Lender to
lenders of funds obtained by it in order to maintain its Loans hereunder to the
extent not received by such Lender in connection with the re-employment of such
funds (but excluding loss of anticipated profits). A certificate as to any
additional amounts payable pursuant to this Section submitted by any Lender,
through the Administrative Agent, to the Applicable Borrower (which certificate
must be delivered to the Administrative Agent or Canadian Agent, as applicable,
within thirty (30) days following such default, repayment, prepayment or
conversion and shall set forth the basis for requesting such amounts in
reasonable detail) shall be conclusive in the absence of manifest error. The
agreements in this Section 2.17 shall survive termination of this Credit
Agreement and payment of the Notes and all other amounts payable hereunder.
2.18 TAXES.
(a) All payments made by the Borrowers hereunder or under any Note will
be, except as provided in Section 2.18(b), made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any Governmental Authority or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding (i)
any tax on or measured by the net income or profits of a Lender, and (ii) any
franchise, capital or similar taxes, in each of (i) and (ii) imposed pursuant to
the laws of the jurisdiction in which it is organized or is resident for tax
purposes or the jurisdiction in which the principal office or applicable lending
office of such Lender is located or any subdivision thereof or therein) and all
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrowers agree to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Credit Agreement or under any Note, after withholding or deduction
for or on account of any Taxes, will not be less than the amount provided for
herein or in such Note. The Borrowers will furnish to the Administrative Agent
or the Canadian Agent, as applicable, as soon as practicable after the date the
payment of any Taxes is due pursuant to applicable law certified copies (to the
extent reasonably available and required by law) of tax receipts evidencing such
payment by the Borrowers. The Borrowers agree to indemnify and hold harmless
each Lender, and reimburse such Lender upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Company,
the Administrative Agent and the Canadian Agent on or prior to the Closing Date,
or in the case of a Lender that is an assignee or transferee of an interest
under this Credit Agreement pursuant to Section 9.6 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i) if the
Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, two
accurate and complete original signed copies of Internal Revenue Service Form
W-8BEN or W-8ECI (or successor forms) certifying such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Credit Agreement and under any Note, or (ii) if the Lender
is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, either
Internal Revenue Service Form W-8BEN or W-8ECI as set forth in the foregoing
clause (i), or (x) a certificate substantially in the form of Schedule 2.18 (any
such certificate, a "Tax Exempt Certificate") and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying such
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Lender's entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Credit Agreement and under
any Note. In addition, each Lender agrees that it will deliver upon the
Company's request updated versions of the foregoing, as applicable, whenever the
previous certification has become obsolete or inaccurate in any material
respect, together with such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Credit Agreement and any Note. Notwithstanding anything to the contrary
contained in Section 2.18(a), but subject to the immediately succeeding
sentence, (A) the Company shall be entitled, to the extent its is required to do
so by law, to deduct or withhold Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Company U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (B) the
Company shall not be obligated pursuant to Section 2.18(a) to gross-up payments
to be made to a Lender in respect of Taxes imposed by the United States if (I)
such Lender has not provided to the Company the Internal Revenue Service Forms
required to be provided to the Company pursuant to this Section 2.18(b) or (II)
in the case of a payment, other than interest, to a Lender described in clause
(ii) of the second sentence of this subsection, to the extent that such Forms do
not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 2.18, the Company agrees to pay additional amounts and
to indemnify each Lender in the manner set forth in Section 2.18(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Closing Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as the
case may be) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.
(d) If the Borrowers pay any additional amount pursuant to this Section
2.18 with respect to a Lender, such Lender shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of such
payment; provided that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit position
or (ii) it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. To the extent that
the payment of any Lender's Taxes by a Borrower gives rise from time to time to
a Tax Benefit (as hereinafter defined) to such Lender in any jurisdiction other
than the jurisdiction which imposed such Taxes, such Lender shall pay to the
Applicable Borrower the amount of each such Tax Benefit so recognized or
received. The amount of each Tax Benefit and, therefore, payment to the
Applicable Borrower will be determined from time to time by the relevant Lender
in its sole discretion, which determination shall be binding and conclusive on
all parties hereto. Each such payment will be due and payable by such Lender to
the applicable Borrower within a reasonable time after the filing of the income
tax return in which such Tax Benefit is recognized or, in the case of any tax
refund, after the refund is received; provided, however, if at any time
thereafter such Lender is required to rescind such Tax Benefit or such Tax
Benefit is otherwise disallowed or nullified, the applicable Borrower shall
promptly, after notice thereof from such Lender, repay to Lender the
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amount of such Tax Benefit previously paid to the Applicable Borrower and
rescinded, disallowed or nullified. For purposed of this section, "Tax Benefit"
shall mean the amount by which any Lender's income tax liability for the taxable
period in question is reduced below what would have been payable had the
Applicable Borrower not been required to pay the Lender's Taxes. In case of any
dispute with respect to the amount of any payment the Applicable Borrower shall
have no right to any offset or withholding of payments with respect to future
payments due to any Lender under this Credit Agreement. Nothing contained in
this Section 2.18 shall require a Lender to disclose or detail the basis of its
calculation of the amount of any Tax Benefit or any other amount or the basis of
its determination referred to in the proviso to the first sentence of this
Section 2.18 to the Borrowers or any other party.
(e) The agreements in this Section 2.18 shall survive the termination of
this Credit Agreement and the payment of the Notes and all other amounts payable
hereunder.
2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.4, the Company
hereby agrees to protect, indemnify, pay and hold the Issuing Lender harmless
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees) that the
Issuing Lender may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit, except to the extent resulting from
the gross negligence or willful misconduct of the Issuing Lender or (ii) the
failure of the Issuing Lender to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jute or de facto government or governmental authority (all such acts
or omissions, herein called "Government Acts").
(b) As between the Company and the Issuing Lender, the Company shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (vii) any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Company. It is the intention of the
parties that this Credit Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby
67
assumed by the Company, including, without limitation, any and all risks of the
acts or omissions, whether rightful or wrongful, of any Government Authority.
The Issuing Lender shall not, in any way, be liable for any failure by the
Issuing Lender or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of the
Issuing Lender.
(d) Nothing in this Section 2.19 is intended to limit the reimbursement
obligation of the Company contained in Section 2.4. The obligations of the
Company under this Section 2.19 shall survive the termination of this Credit
Agreement. No act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
2.19, the Company shall have no obligation to indemnify any Issuing Lender in
respect of any liability incurred by such Issuing Lender arising out of the
gross negligence or willful misconduct of the Issuing Lender, as determined by a
court of competent jurisdiction.
2.20 REPLACEMENT OF LENDERS.
The Borrowers shall be permitted to replace with a financial institution
acceptable to the Administrative Agent any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.15, Section 2.16 or
Section 2.18(a) or (b) is then in default of its obligation to make Loans
hereunder; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.15, Section 2.16(a) or
Section 2.18(c), as applicable, so as to eliminate the continued need for
payment of amounts owing pursuant to Section 2.15, Section 2.16 or Section
2.18(a), (iv) the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Applicable Borrower shall be liable to such replaced Lender
under Section 2.17 if any LIBOR Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Agents, (vii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
9.6 (provided that the Applicable Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the the Applicable Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.15, 2.16 or 2.18(a),
as the case may be, (ix) a Canadian Lender may only be replaced with another
Canadian Lender, and (x) any such replacement shall not be deemed to be a waiver
of any rights that the Borrowers, either Agent or any other Lender shall have
against the replaced Lender. In the event any replaced Lender fails to execute
the agreements required under Section 9.6 in connection with an assignment
pursuant to this Section 2.20, the Applicable Borrower may, upon two (2)
Business Days' prior notice to such replaced Lender, execute such agreements on
behalf of such replaced Lender. A Lender shall not be required to be replaced
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the the Applicable Borrower to require such replacement
cease to apply.
2.21 RELATIONSHIP BETWEEN THE AGENTS.
The Canadian Agent shall promptly inform the Administrative Agent and the
Administrative Agent shall promptly inform the Canadian Agent, by telecopy, of
the funding of any Revolving Loan or
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Swingline Loan and the terms thereof, as well and any other notices and
communications received from either Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to
make Loans herein provided for, the Credit Parties hereby represent and warrant
to the Agents and to each Lender that:
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
The Company and each of its Subsidiaries is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization. The Company and each of its Subsidiaries (i)
has the corporate power and authority and the legal right to own and operate its
property and to conduct its business, (ii) is duly qualified as a foreign
corporation or other legal entity and in good standing under the laws of each
jurisdiction where its ownership of property or the conduct of its business
requires such qualification, and (iii) is in compliance with all Requirements of
Law, except where (a) the failure to have such power, authority and legal right
as set forth in clause (i) hereof, (b) the failure to be so qualified or in good
standing as set forth in clause (ii) hereof, or (c) the failure to comply with
Requirements of Law as set forth in clause (iii) hereof, is reasonably likely,
in the aggregate, to have a Material Adverse Effect.
3.2 CORPORATE POWER; AUTHORIZATION.
Each of the Credit Parties has the corporate power and authority to make,
deliver and perform the Credit Documents to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance of such Credit Documents. No consent or authorization of, or filing
with, any Person (including, without limitation, any Governmental Authority), is
required in connection with the execution, delivery or performance by a Credit
Party, or the validity or enforceability against a Credit Party, of the Credit
Documents, other than such consents, authorizations or filings which have been
made or obtained.
3.3 ENFORCEABLE OBLIGATIONS.
This Agreement has been duly executed and delivered, and each other Credit
Document will be duly executed and delivered, by each Credit Party, as
applicable, and this Credit Agreement constitutes, and each other Credit
Document when executed and delivered will constitute, legal, valid and binding
obligations of each Credit Party executing the same, enforceable against such
Credit Party in accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity.
3.4 NO LEGAL BAR.
The execution, delivery and performance by each Credit Party of the Credit
Documents will not violate such Person's articles or certificate of
incorporation (or equivalent formation document), bylaws or other organizational
or governing documents or any Requirement of Law or cause a breach or Default
under any of their respective Material Contracts
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3.5 NO MATERIAL LITIGATION.
No litigation, investigation or proceeding of or before any court,
tribunal, arbitrator or governmental authority is pending or, to the knowledge
of any Responsible Officer of the Company, threatened by or against the
Borrowers or any of the Restricted Subsidiaries, or against any of their
respective properties or revenues, existing or future (a) with respect to any
Credit Document, or any of the transactions contemplated hereby or thereby, or
(b) which is reasonably likely to have a Material Adverse Effect.
3.6 INVESTMENT COMPANY ACT, ETC.
Neither Borrower nor any Restricted Subsidiary is (i) an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, and is not controlled by such a company, or (ii) a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
3.7 MARGIN REGULATIONS.
No part of the proceeds of the Loans hereunder will be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin stock" within
the meaning of Regulation U, or for the purpose of purchasing or carrying or
trading in any securities. If requested by any Lender or the Administrative
Agent, the Borrowers will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U. No Indebtedness being reduced or retired
out of the proceeds of the Loans hereunder was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation T.
"Margin stock" within the meaning of Regulation U does not constitute more than
25% of the value of the Consolidated Assets of Company and its Subsidiaries.
Neither the execution and delivery hereof by the Borrowers, nor the performance
by them of any of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds of
the Loans) will violate or result in a violation of the Securities Act of 1933,
as amended, or the Exchange Act, or regulations issued pursuant thereto, or
Regulation T, U or X.
3.8 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Neither Borrower nor any of the Restricted Subsidiaries has received
any notices of claims or potential liability under, and are in compliance with,
all applicable Environmental Laws, where such claims and liabilities under, and
failures to comply with, such statutes, regulations, rules, ordinances, laws or
licenses, is reasonably likely to result in penalties, fines, claims or other
liabilities to the Borrowers and the Restricted Subsidiaries in amounts that
would have a Material Adverse Effect, either individually or in the aggregate.
(b) Neither Borrower nor any of the Restricted Subsidiaries has received
any notice of violation, or notice of any action, either judicial or
administrative, from any Governmental Authority relating to the actual or
alleged violation of any Environmental Law, including, without limitation, any
notice of any actual or alleged spill, leak, or other release of any Hazardous
Substances, waste or hazardous waste by a Borrower or any of the Restricted
Subsidiaries or its employees or agents, or as to the existence of any
contamination on any properties owned by a Borrower or any of the Restricted
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Subsidiaries, where any such violation, spill, leak, release or contamination is
reasonably likely to result in penalties, fines, claims or other liabilities to
a Borrower or any Restricted Subsidiary in amounts that would have a Material
Adverse Effect, either individually or in the aggregate. Neither Borrower nor
any of the Restricted Subsidiaries, nor, to the knowledge of Borrower, any other
Person, has caused any spill, leak or other release of any Hazardous Substance
that is reasonably likely to result in penalties, fines, claims or other
liabilities to a Borrower or any Restricted Subsidiary in amounts that would
have a Material Adverse Effect, either individually or in the aggregate.
(c) The Borrowers and the Restricted Subsidiaries have obtained all
necessary governmental permits, licenses and approvals for the operations
conducted on their respective properties, including without limitation, all
required material permits, licenses and approvals for (i) the emission of air
pollutants or contaminants, (ii) the treatment or pretreatment and discharge of
waste water or storm water, (iii) the treatment, storage, disposal or generation
of hazardous wastes, (iv) the withdrawal and usage of ground water or surface
water, and (v) the disposal of solid wastes, in any such case where the failure
to have such license, permit or approval is reasonably likely to have a Material
Adverse Effect.
3.9 INSURANCE.
The Borrowers and the Restricted Subsidiaries currently maintain insurance
with respect to their respective properties and businesses, with financially
sound and reputable insurers, having coverages against losses or damages of the
kinds customarily insured against by reputable companies in the same or similar
businesses, such insurance being in amounts no less than those amounts which are
customary for such companies under similar circumstances. The Borrowers and the
Restricted Subsidiaries have paid all material amounts of insurance premiums now
due and owing with respect to such insurance policies and coverages, and such
policies and coverages are in full force and effect. The present insurance
coverage of the Borrowers and the Restricted Subsidiaries is outlined as to
carrier, policy number, type and amount on Schedule 3.9.
3.10 NO DEFAULT.
None of the Borrowers or the Restricted Subsidiaries is in default under
or with respect to any Contractual Obligation in any respect which has had or is
reasonably likely to have a Material Adverse Effect.
3.11 NO BURDENSOME RESTRICTIONS.
Except as set forth on Schedule 3.11, neither Borrower nor any of the
Restricted Subsidiaries is a party to or bound by any Contractual Obligation or
Requirement of Law or any provision of its articles or certificate of
incorporation, bylaws or other organizational or governing documents which has
had or is reasonably likely to have a Material Adverse Effect.
3.12 TAXES.
Except where the failure to do so could not reasonably be expect to have a
Material Adverse Effect, each Borrower and each Restricted Subsidiary has filed
all tax returns which are required to have been filed by any Governmental
Authority, and has paid all taxes, assessments, fees and other charges otherwise
due and payable, except those which are being contested in good faith by
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appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP). The Company has not received
written notice of any proposed material tax assessment with respect to Federal
or other material income taxes against either Borrower or any Restricted
Subsidiary nor does any Responsible Officer of the Company know of any material
Federal income tax liability on the part of a Borrower or any Restricted
Subsidiary other than any such assessment or liability which is adequately
provided for on the books of the Borrowers and its Restricted Subsidiaries.
3.13 SUBSIDIARIES.
(a) Schedule 3.13 is a complete and correct list of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its Capital Stock or similar equity interests outstanding owned by the Company
and each other Subsidiary. Schedule 3.13 indicates which Subsidiaries are
Restricted Subsidiaries and which Subsidiaries are Unrestricted Subsidiaries.
(b) All of the outstanding shares of Capital Stock or similar equity
interests of each Subsidiary shown in Schedule 3.13 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 3.13.
3.14 FINANCIAL STATEMENTS, FISCAL YEAR AND FISCAL QUARTERS.
(a) The Company has furnished to the Administrative Agent and the Lenders
(a)(i) the audited consolidated balance sheets as of September 30, 2004, 2003,
and 2002 of the Company and its Subsidiaries and the related consolidated
statements of income, shareholders' equity and cash flows for the fiscal years
then ended, including in each case the related notes and (ii) the unaudited
consolidated balance sheets as of March 31, 2005 of the Company and its
Subsidiaries and the related consolidated statements of income, shareholders'
equity and cash flows for the six months then ended, including in each case the
related notes, and (b)(i) the audited balance sheets of the Acquired Businesses
as of January 2, 2005 and December 28, 2003, (ii) the audited statements of
income, shareholders' equity and cash flows of the Acquired Businesses for the
fiscal years ended January 2, 2005, December 28, 2003 and June 2, 2002 and the
seven-month period ended December 29, 2002, in each case audited by independent
public accountants of recognized national standing and prepared in conformity
with GAAP, and (iii) the unaudited balance sheets of the Acquired Businesses as
of April 3, 2005, and the unaudited statements of income, shareholders' equity
and cash flows of the Acquired Businesses for the both the 13-week period and
the 53-week period ended April 3, 2005. The foregoing financial statements
fairly present in all material respects the consolidated financial condition of
Company and its Subsidiaries or the Acquired Businesses, as applicable, as at
the dates thereof and results of operations for such periods in conformity with
GAAP consistently applied (subject, in the case of the quarterly financial
statements, to normal year-end audit adjustments and the absence of certain
notes). The Borrowers and the Restricted Subsidiaries taken as a whole did not
have any material contingent obligations, contingent liabilities, or material
liabilities for known taxes, long-term leases or unusual forward or long-term
commitments required to be reflected in the foregoing financial statements or
the notes thereto that are not so reflected. Since September 30, 2004, there has
been no change with respect to either Borrower or any Restricted Subsidiary
which has had or is reasonably likely to have a Material Adverse Effect. Since
January 2, 2005, there has been no change with respect to the Acquired
Businesses which has had or is reasonably likely to have a Material Adverse
Effect. The Company's fiscal year commences October 1st of each year and ends
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on September 30th of each year. The Company's fiscal quarters end on December
31st, March 31st, June 30th and September 30th of each year.
(b) The pro forma consolidated balance sheet, income statement and
statement of cash flows of the Consolidated Companies as of the Closing Date
after giving effect to the Acquisition and the initial Extensions of Credit
hereunder is based upon reasonable assumptions made known to the Lenders and
upon information not known to be incorrect or misleading in any material
respect.
(c) The annual projections for each fiscal year ending after the Closing
Date and through the Maturity Date were prepared in good faith on the basis of
the assumptions stated therein, which assumptions are fair in light of then
existing conditions (it being understood that projections are subject to
uncertainties and contingencies and that no assurance can be given that any
projection will be realized).
3.15 ERISA.
Except as disclosed on Schedule 3.15:
(a) Identification of Plans. None of the Borrowers, any of the Restricted
Subsidiaries nor any of their respective ERISA Affiliates maintains or
contributes to, or has during the past seven years maintained or contributed to,
any Plan that is subject to Title IV of ERISA;
(b) Compliance. Each Plan maintained by the Borrowers and the Restricted
Subsidiaries has at all times been maintained, by its terms and in operation, in
compliance with all applicable laws, and the Borrowers and the Restricted
Subsidiaries are subject to no tax or penalty with respect to any Plan of such
Consolidated Company or any ERISA Affiliate thereof, including without
limitation, any tax or penalty under Title I or Title IV of ERISA or under
Chapter 43 of the Code, or any tax or penalty resulting from a loss of deduction
under Sections 162, 404, or 419 of the Code, where the failure to comply with
such laws, and such taxes and penalties, together with all other liabilities
referred to in this Section 3.15 (taken as a whole), would in the aggregate have
a Material Adverse Effect;
(c) Liabilities. Neither Borrower nor any Restricted Subsidiary is subject
to any liabilities (including withdrawal liabilities) with respect to any Plans
of such Borrower and/or such Restricted Subsidiary or any of their ERISA
Affiliates, including without limitation, any liabilities arising from Titles I
or IV of ERISA, other than obligations to fund benefits under an ongoing Plan
and to pay current contributions, expenses and premiums with respect to such
Plans, where such liabilities, together with all other liabilities referred to
in this Section 3.15 (taken as a whole), would in the aggregate have a Material
Adverse Effect;
(d) Funding. Each Borrower and each Restricted Subsidiary and, with
respect to any Plan which is subject to Title IV of ERISA, each of their
respective ERISA Affiliates, have made full and timely payment of all amounts
(A) required to be contributed under the terms of each Plan and applicable law,
and (B) required to be paid as expenses (including PBGC or other premiums) of
each Plan, where the failure to pay such amounts (when taken as a whole,
including any penalties attributable to such amounts) would have a Material
Adverse Effect. No Borrower nor any Restricted Subsidiary is subject to any
liabilities with respect to post-retirement medical benefits in any amounts
which, together with all other liabilities referred to in this Section 3.15
(taken as a whole), would have a Material Adverse Effect if such amounts were
then due and payable.
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(e) ERISA Event. No ERISA Event has occurred or is reasonably expected to
occur.
Schedule 3.15, as it applies to subsection (a) above, may be updated from time
to time by the Borrowers by giving written notice thereof to the Administrative
Agent.
3.16 INTELLECTUAL PROPERTY.
Each of the Credit Parties and the other Restricted Subsidiaries owns, or
has the legal right to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for each of them to conduct its business as
currently conducted. Set forth on Schedule 3.16 is a list of all material
Intellectual Property owned by each of the Credit Parties and their Subsidiaries
or that the Credit Parties or any of their Subsidiaries has the right to use.
Except as provided on Schedule 3.16, no claim has been asserted and is pending
by any Person challenging or questioning the use of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property, nor
do the Credit Parties or any of their Subsidiaries know of any such claim, and,
to the knowledge of the Credit Parties, the use of such Intellectual Property by
the Credit Parties or any of their Subsidiaries does not infringe on the rights
of any Person, except for such claims and infringements that in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. Schedule
3.16 may be updated from time to time by the Company to include new Intellectual
Property by giving written notice thereof to the Administrative Agent.
3.17 OWNERSHIP OF PROPERTY; LIENS.
(a) Except as set forth on Schedule 3.17, (i) each Borrower and each
Restricted Subsidiary has good and marketable fee simple title to or a valid
leasehold interest in all of its real property and good title to, or a valid
leasehold interest in, all of its other Property, as such Properties are
reflected in the consolidated balance sheet of the Company and its Subsidiaries
as of September 30, 2004 referred to in Section 3.14 (other than Properties
disposed of in the ordinary course of business since such date or as otherwise
permitted by the terms of this Credit Agreement) except where the failure to
hold such title, leasehold interest or possession would not have a Material
Adverse Effect, subject to no Lien or title defect of any kind, except Liens
permitted by Section 6.2 and (ii) each Borrower and each Restricted Subsidiary
enjoys peaceful and undisturbed possession under all of their respective leases.
(b) As of the date of this Credit Agreement, the Property and assets owned
by each Borrower and each Restricted Subsidiary are not subject to any Lien
securing any Indebtedness or other obligation in excess of U.S.$5,000,000
individually other than as described on Schedule 3.17.
3.18 EXISTING INDEBTEDNESS.
Schedule 3.18 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries in excess of U.S.$5,000,000 as
of May 30, 2005, since which date there has been no material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company and its Subsidiaries. Neither the Company nor
any Subsidiary is in default and no waiver of default is currently in effect, in
the payment of any principal or interest on any Indebtedness of the Company or
such Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary the outstanding principal amount
of which exceeds U.S.$5,000,000 that would permit (or that with notice or the
lapse of time, or both,
74
would permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.
3.19 FINANCIAL CONDITION.
On the Closing Date and after giving effect to the transactions
contemplated by this Credit Agreement and the other Credit Documents, (i) the
assets of each Borrower and each Restricted Subsidiary at fair valuation and
based on their present fair saleable value will exceed such Person's debts,
including contingent liabilities, (ii) the remaining capital of each Borrower
and each Restricted Subsidiary will not be unreasonably small to conduct such
Person's business, and (iii) no Borrower nor any Restricted Subsidiary will have
incurred debts, or have intended to incur debts, beyond such Person's ability to
pay such debts as they mature. For purposes of this Section 3.19, "debt" means
any liability on a claim, and "claim" means (a) the right to payment, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, or (b) the right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
3.20 LABOR MATTERS.
Except as set forth in Schedule 3.20, the Borrowers and the Restricted
Subsidiaries have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which are reasonably likely to have a
Material Adverse Effect, and, to the best knowledge of the Responsible Officers
of the Company, there are no such strikes, disputes, slow downs or work
stoppages threatened against a Borrower or any of its Restricted Subsidiaries
which are reasonably likely to have a Material Adverse Effect, except as
disclosed in writing to the Administrative Agent. The hours worked and payment
made to employees of each Borrower and each Restricted Subsidiary have not been
in violation in any material respect of (including any possible penalties under)
the Fair Labor Standards Act or any other applicable law dealing with such
matters, and all payments due from either Borrower and or any Restricted
Subsidiary, or for which any claim may be made against a Borrower or any
Restricted Subsidiary, on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as liabilities on the
books of a Borrower and the Restricted Subsidiaries, in each case where the
failure to comply with such laws or to pay or accrue such liabilities is
reasonably likely to have a Material Adverse Effect.
3.21 PAYMENT OR DIVIDEND RESTRICTIONS.
Except as described on Schedule 3.21, neither Borrower nor any Restricted
Subsidiary is party to or subject to any agreement or understanding restricting
or limiting its ability to pay dividends or make other distributions.
3.22 ACCURACY AND COMPLETENESS OF INFORMATION.
Each written report, financial statement, certificate, or final schedule
to the Agreement or any other Credit Document heretofore, contemporaneously or
hereafter furnished by or on behalf of any Credit Party or any of its
Subsidiaries to the Agents, the Lead Arrangers or any Lender for purposes of or
in connection with this Credit Agreement or any other Credit Document, or any
transaction contemplated hereby or thereby, is or will be true and accurate in
all material respects and not
75
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to the Company, any other
Credit Party or any of their Subsidiaries which has, or could reasonably be
expected to have, a Material Adverse Effect which fact has not been set forth
herein, in the financial statements of the Company and its Subsidiaries and the
Acquired Businesses furnished to the Agent, the Arrangers and/or the Lenders, in
the Acquisition Documents or in any certificate, opinion or other written
statement made or furnished by any Credit Party to the Agents and/or the
Lenders.
3.23 COMPLIANCE WITH TRADING WITH THE ENEMY ACT, OFAC RULES AND
REGULATIONS AND PATRIOT ACT.
(a) Neither any Credit Party nor any of its Subsidiaries is an "enemy" or
an "ally of the enemy" within the meaning of Section 2 of the Trading with the
Enemy Act of the United States of America (50 U.S.C. App. Sections 1 et seq.),
as amended. Neither any Credit Party nor any or its Subsidiaries is in violation
of (i) the Trading with the Enemy Act, as amended, (ii) any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto or (iii) the Patriot Act (as defined in Section 9.17).
None of the Credit Parties (A) is a blocked person described in section 1 of the
Anti-Terrorism Order or (B) to the best of its knowledge, engages in any
dealings or transactions, or is otherwise associated, with any such blocked
person.
(b) None of the Company, any Subsidiary of the Company or any Affiliate of
the Company or any Guarantor (i) is a Sanctioned Person, (ii) has more than 15%
of its assets in Sanctioned Countries, or (iii) derives more than 15% of its
operating income from investments in, or transactions with Sanctioned Persons or
Sanctioned Countries. The proceeds of any Loan will not be used and have not
been used to fund any operations in, finance any investments or activities in or
make any payments to, a Sanctioned Person or a Sanctioned Country.
3.24 USE OF PROCEEDS.
The Extensions of Credit will be used solely (a) to finance the Gulf
States Acquisition (first, to the portion of the purchase price paid in
connection therewith attributable to all Property of the Businesses which
constitute Principal Property and, then, to the portion of such purchase price
attributable to all other Property comprising the Acquired Businesses) and (b)
to provide for working capital and general corporate requirements of the
Borrower, including Permitted Acquisitions.
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3.25 CONSUMMATION OF ACQUISITION; REPRESENTATIONS AND WARRANTIES FROM
OTHER DOCUMENTS.
The Acquisition and related transactions have been consummated
substantially in accordance with the terms of the Acquisition Documents. As of
the Closing Date, the Acquisition Documents have not been materially altered,
amended or otherwise modified or supplemented or any condition thereof waived
without the prior written consent of the Administrative Agent. Each of the
representations and warranties made in the Acquisition Documents by the Company
and the Subsidiaries of the Company party thereto and, to the knowledge of the
Responsible Officers of the Company, by the Sellers is true and correct, except
for any representation or warranty therein the failure of which to be true and
correct, does not have or could not reasonably be expected to have a Material
Adverse Effect.
3.26 BUSINESS LOCATIONS
Set forth on Schedule 3.26(a) is a list of all material real Properties
(other than those acquired in the Gulf States Acquisition) located in the United
States and Canada that are owned or leased by the Credit Parties as of the
Closing Date, with an indication as to which properties are owned and which are
leased. Set forth on Schedule 3.26(b) is a list of all real Properties acquired
by the Credit Parties in the Gulf States Acquisition, with an indication as to
which properties are owned and which are leased. Set forth on Schedule 3.26(c)
is a list of all locations where any inventory of a Credit Party (other than
inventory acquired in the Gulf States Acquisition) with a value in excess of
$1,000,000 is located as of the Closing Date. Set forth in Schedule 3.26(d) is a
list of all locations where any tangible personal Property (including inventory)
acquired by the Credit Parties in the Gulf States Acquisition is located as of
the Closing Date. Set forth on Schedule 3.26(e) is the chief executive office
and jurisdiction of incorporation or formation of each Credit Party as of the
Closing Date.
3.27 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby. Except as set forth in the
Security Documents, such security interests and Liens are currently (or will be,
upon the filing of appropriate financing statements and the recordation of the
applicable Mortgage Instruments in each case in favor of the applicable Agent,
on behalf of the applicable Secured Parties) perfected security interests and
Liens, prior to all other Liens other than Permitted Liens.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS AND TERM LOAN.
This Credit Agreement shall become effective upon, and the obligation of
each Lender to make the initial Revolving Loans and the Term Loan on the Closing
Date is subject to, the satisfaction of the following conditions precedent:
(a) Execution of Credit Agreement and Credit Documents. Receipt by the
Administrative Agent of (i) counterparts of this Credit Agreement, (ii) the U.S.
Revolving Notes, (iii) the Canadian Revolving Notes, (iv) the Term Notes, (iv)
for the account of the U.S. Swingline Lender, a U.S. Swingline Note, (v) for the
account of the Canadian Swingline Lender, a Canadian Swingline Note
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and (vi) counterparts of the Security Agreements; in each case executed by a
duly authorized officer of each party thereto and in each case conforming to the
requirements of this Credit Agreement.
(b) Legal Opinion. Receipt by the Administrative Agent of the following
legal opinions of counsel to the Credit Parties, in form and substance
reasonably acceptable to the Administrative Agent:
(i) a legal opinion of Xxxxxx & Xxxxxx, special counsel to the
Credit Parties, providing customary opinions regarding the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of
1935, as amended, no conflicts with/no creation of liens under material
contracts, no conflicts with or consents under applicable Georgia law and
perfection of security interests under applicable Georgia and Delaware
law.
(ii) a legal opinion of Winston & Xxxxxx LLP, special New York
counsel to the Credit Parties, providing customary opinions regarding
enforceability of the Credit Documents, no conflicts with New York law and
creation of security interests;
(iii) a legal opinion of the general counsel of the Company,
covering valid existence and good standing of the U.S. Credit Parties, due
authorization, execution and delivery of the Credit Documents by the U.S.
Credit Parties', no conflicts with Organizational Documents and no
material litigation;
(iv) a legal opinion of Xxxxxx Xxxxxxx LLP, Canadian counsel to the
Canadian Credit Parties, covering the valid existence and good standing of
the Canadian Credit Parties organized in Quebec, due authorization,
execution and delivery of the Credit Documents by the Canadian Credit
Parties organized in Quebec, , no conflicts with or consents under
applicable Quebec and Canadian federal law and other customary matters
with respect to the Canadian Security Documents; and
(v) a legal opinion of Xxxxxxx XxXxxxxx Stirling Scales, special
Nova Scotia counsel to the Canadian Credit Parties, covering the valid
existence and good standing of the Canadian Borrower, the due
authorization, execution and delivery of the Credit Documents by the
Canadian Borrower, and no conflicts with or consents under applicable Nova
Scotia law.
(c) Personal Property Collateral. The Administrative Agent shall have
received, in form and substance reasonably satisfactory to the Administrative
Agent:
(i) searches of Uniform Commercial Code filings in the jurisdiction
of organization of each Credit Party and the chief executive office of
each Credit Party, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted Liens
(ii) searches of PPSA filings or the equivalent thereof in the
provinces of Xxxxxxx xxx Xxxxxx, Xxxxxx, copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist
other than Permitted Liens;
(iii) UCC and PPSA financing statements or the equivalent thereof
for each appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the Collateral;
and
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(iv) searches of ownership of, and Liens on, Intellectual Property
of each Credit Party in the appropriate governmental offices in the United
States and Canada;
(v) duly executed notices of grant of security interest with the
United States Patent and Trademark Office, United States Copyright Offices
of the grant of security interests in Patents, Trademarks and/or
Copyrights constituting U.S. Collateral, each in the form required by the
U.S. Security Agreement and as are necessary, in the discretion of the
Administrative Agent, as applicable, to perfect the Lender's security
interest in the Collateral.
(d) Absence of Legal Proceedings. The absence of any material pending or,
to the best knowledge of the Company, threatened action, suit, investigation,
proceeding, bankruptcy or insolvency, injunction, order or claim with respect to
the Company or any of its Subsidiaries.
(e) Corporate Documents. Receipt by the Administrative Agent of the
following (or their equivalent), each (other than with respect to clause (iv))
certified by the secretary or assistant secretary of the applicable Credit Party
as of the Closing Date to be true and correct and in force and effect pursuant
to a certificate in a form reasonably satisfactory to the Administrative Agent:
(i) Articles of Incorporation. Copies of the articles of
incorporation or charter documents of each Credit Party certified to be
true and complete as of a recent date by the appropriate Governmental
Authority of the state of its organization.
(ii) Resolutions. Copies of resolutions of the board of directors or
comparable managing body of each Credit Party approving and adopting the
respective Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof.
(iii) Bylaws. Copies of the bylaws, operating agreement or
partnership agreement of each Credit Party.
(iv) Good Standing. Copies, where applicable, of certificates of
good standing, existence or its equivalent of each Credit Party in its
state or province of organization, certified as of a recent date by the
appropriate Governmental Authorities of the applicable state or province
of organization.
(f) Officer's Certificate. Receipt by the Administrative Agent of a
certificate, in form and substance reasonably satisfactory to it, of a
Responsible Officer certifying that (i) each Borrower and each of the other
Credit Parties is solvent as of the Closing Date and (ii) the ratio of Total
Funded Debt as of the Closing Date to pro forma EBITDA for the 12-month period
ending March 31, 2005 is not greater than 4.45:1.00
(g) Account Designation Letter. Receipt by the Administrative Agent of an
executed counterpart of the Account Designation Letter.
(h) Financial Information. Receipt by the Administrative Agent of the
financial information described in subsections (a), (b) and (c) of Section 3.14.
..
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(i) Capital Structure/Other Documentation. Receipt by the Administrative
Agent of any information requested by it relating to the corporate and capital
structure of the Company and its Subsidiaries.
(j) Liability and Casualty Insurance. The Agents shall have received
copies of insurance policies or certificates of insurance evidencing liability
and casualty insurance meeting the requirements set forth herein or in the
Security Documents. The Administrative Agent, in the case of the U.S.
Collateral, and the Canadian Agent, in the case of the Canadian Collateral,
shall be named as lender loss payee and additional insured on all such insurance
policies for the benefit of the applicable Secured Parties.
(k) Flow of Funds. Receipt by the Administrative Agent of a sources and
uses table and payment instructions with respect to each wire transfer to be
made by the Administrative Agent on behalf of the Lenders or the Borrowers on
the Closing Date setting forth the amount of such transfer, the purpose of such
transfer, the name and number of the account to which such transfer is to be
made, the name and ABA number of the bank or other financial institution where
such account is located and the name and telephone number of an individual that
can be contacted to confirm receipt of such transfer.
(l) Repayment of Existing Indebtedness. The Administrative Agent shall
have received evidence, in form and substance satisfactory to the Administrative
Agent, that the Existing Credit Facilities have been or concurrently with the
Closing Date are being repaid in full and terminated and all Liens relating
thereto shall have been terminated and released (or arrangements reasonably
satisfactory to the Administrative Agent shall have been made.
(m) Consents. The Administrative Agent shall have received evidence that
all necessary governmental, corporate, shareholder and third party consents and
approvals, if any, in connection with the financings and other transactions
contemplated hereby have been received and no condition exists which would
reasonably be likely to restrain, prevent or impose any material adverse
conditions on the transactions contemplated hereby.
(n) No Material Adverse Change. No change having or that could reasonably
be expected to have a Material Adverse Effect shall have occurred since (i)
September 30, 2004 in the business, assets, liabilities, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole,
(ii) January 2, 2005 in the business, assets, liabilities, condition (financial
or otherwise) or prospects of the Acquired Businesses, taken as a whole.
(o) Fees. Receipt by the Administrative Agent and the Lenders of all fees,
if any, then owing pursuant to the Fee Letters, Section 2.10 or pursuant to any
other Credit Document.
(p) Consummation of Acquisition; Acquisition Documents. Contemporaneously
with the initial Extensions of Credit hereunder, the Acquisition shall have been
consummated in accordance with the terms of the Acquisition Documents (without
waiver of any conditions precedent to the obligations of the buyer thereunder)
and in material compliance with applicable law and regulatory approvals. The
Administrative Agent shall have reviewed and approved in its sole discretion all
of the Acquisition Documents and there shall not have been any material
modification, amendment, supplement or waiver to the Acquisition Documents
without the prior written consent of the Administrative Agent, including, but
not limited to, any modification, amendment, supplement or waiver relating to
the amount or type of consideration to be paid in connection with the
Acquisition and the contents of all disclosure schedules
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and exhibits. The Administrative Agent shall have received a copy, certified by
an officer of the Company as true and complete, of each Acquisition Document as
originally executed and delivered, together with all exhibits and schedules
thereto.
(q) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Credit Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agents and
the Required Lenders.
4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) Representations and Warranties. The representations and warranties
made by the Credit Parties herein or in any other Credit Document or which are
contained in any certificate furnished at any time under or in connection
herewith or therewith shall be true and correct on and as of the date of such
Extension of Credit as if made on and as of such date (except for those which
expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date.
(c) Compliance with Commitments. Immediately after giving effect to the
making of any such Extension of Credit (and the application of the proceeds
thereof), (i) the sum of the aggregate principal amount of outstanding U.S.
Revolving Loans plus U.S. Swingline Loans plus LOC Obligations shall not exceed
the Aggregate U.S. Revolving Committed Amount, (ii) the LOC Obligations shall
not exceed the LOC Committed Amount, (iii) the U.S. Swingline Loans shall not
exceed the U.S. Swingline Commitment, (iv) the Canadian Swingline Loans shall
not exceed the Canadian Swingline Commitment and (v) the aggregate outstanding
principal amount of outstanding Canadian Revolving Loans plus Canadian Swingline
Loans shall not exceed the Aggregate Canadian Revolving Commitment Amount.
(d) Additional Conditions to U.S. Revolving Loans. If a U.S. Revolving
Loan is requested, all conditions set forth in Section 2.1 shall have been
satisfied.
(e) Additional Conditions to Canadian Revolving Loans. If a Canadian
Revolving Loan is requested, all conditions set forth in Section 2.2 shall have
been satisfied.
(f) Additional Conditions to U.S. Swingline Loans. If a U.S. Swingline
Loan is requested, all conditions set forth in Section 2.4 shall have been
satisfied.
(g) Additional Conditions to Canadian Swingline Loans. If a Canadian
Swingline Loan is requested, all conditions set forth in Section 2.4-A shall
have been satisfied.
(h) Additional Conditions to Term Loan. If the Term Loan is requested, all
conditions set forth in Section 2.3 shall have been satisfied.
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(i) Additional Conditions to Letters of Credit. If the issuance of a
Letter of Credit is requested, all conditions set fort in Section 2.5 shall have
been satisfied.
Each request for an Extension of Credit (including extensions and
conversions) and each acceptance by a Borrower of an Extension of Credit
(including extensions and conversions) shall be deemed to constitute a
representation and warranty by the Credit Parties as of the date of such Loan
that the conditions in subsections (a) through (i) of this Section have been
satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties covenant and agree that on the Closing Date, and so
long as this Credit Agreement is in effect and until the Commitments have been
terminated, no Loans remain outstanding and all amounts owing hereunder or under
any other Credit Document or in connection herewith or therewith have been paid
in full, the Credit Parties shall:
5.1 CORPORATE EXISTENCE, ETC.
Preserve and maintain, and cause each of the Restricted Subsidiaries to
preserve and maintain, its corporate existence (except as otherwise permitted
pursuant to Section 6.4), its material rights, franchises, and licenses, and its
material patents and copyrights (for the scheduled duration thereof),
trademarks, trade names, and service marks, necessary or desirable in the normal
conduct of its business, and its qualification to do business as a foreign
corporation in all jurisdictions where it conducts business or other activities
making such qualification necessary, where the failure to be so qualified is
reasonably likely to have a Material Adverse Effect.
5.2 COMPLIANCE WITH LAWS, ETC.
Comply, and cause each of the Restricted Subsidiaries to comply with all
Requirements of Law (including, without limitation, the Environmental Laws
subject to the exceptions set forth in Section 3.8 where the penalties, claims,
fines, and other liabilities resulting from noncompliance with such
Environmental Laws do not involve amounts material in the aggregate) and
Contractual Obligations applicable to or binding on any of them where the
failure to comply with such Requirements of Law and Contractual Obligations is
reasonably likely to have a Material Adverse Effect.
5.3 PAYMENT OF TAXES AND CLAIMS.
File and cause each Restricted Subsidiary to file all Federal, state,
local and foreign tax returns that are required to be filed by each of them and
will pay or make provision for the payment of all taxes that have become due
pursuant to such returns or pursuant to any assessment in respect thereof
received by a Borrower or any Restricted Subsidiary, and each Borrower and each
Restricted Subsidiary will pay or cause to be paid all other taxes, assessments,
fees and other governmental charges and levies which, to the knowledge of the
Responsible Officers of a Borrower or any Restricted Subsidiary, are due and
payable before the same become delinquent, except only such taxes and
assessments as are being contested in good faith by appropriate and timely
proceedings and as to which adequate reserves have been established in
accordance with GAAP.
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5.4 KEEPING OF BOOKS.
Keep, and cause each of the Restricted Subsidiaries to keep, proper books
of record and account, containing complete and accurate entries of all their
respective financial and business transactions.
5.5 VISITATION, INSPECTION, ETC.
Permit, and cause each of its Restricted Subsidiaries to permit, any
representative of the an Agent or any Lender, at such Agent's or such Lender's
expense, to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such reasonable times
and as often as such Agent or such Lender may reasonably request after
reasonable prior notice to the Company; provided, however, that at any time
following the occurrence and during the continuance of a Default or an Event of
Default, no prior notice to Company shall be required, and any such inspection
shall be at the expense of the Company.
5.6 INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to its properties and business, and
the properties and business of the Restricted Subsidiaries, against loss or
damage of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance to be of such types and in such
amounts and subject to such deductibles and self-insurance programs as the
Company in its judgment deems reasonable; provided, however, that in any event
Borrowers shall use their best efforts to maintain, or cause to be maintained,
insurance in amounts and with coverages not materially less favorable to the
Borrowers or any of the Restricted Subsidiaries as in effect on the date of this
Credit Agreement, except where the costs of maintaining such insurance would, in
the judgment of the Company, be excessive. The Administrative Agent, in the case
of U.S. Collateral, and the Canadian Agent, in the case of Canadian Collateral,
shall be named as loss payee or mortgagee, as its interest may appear, and/or
additional insured with respect to any such insurance providing coverage in
respect of any such Collateral, and each provider of any such insurance shall
agree, by endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agents, that it will give the applicable Agent
thirty (30) days prior written notice before any such policy or policies shall
be altered or canceled.
(b) Cause, and cause each Restricted Subsidiaries to cause, all properties
used or useful in the conduct of its business to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
settlements and improvements thereof, all as in the judgment of Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 5.6 shall prevent a Credit Party from discontinuing the
operation or maintenance of any such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of either Borrower or any of the Restricted Subsidiaries.
(c) Cause a summary, set forth in format and detail reasonably acceptable
to the Administrative Agent, of the types and amounts of insurance (property and
liability) maintained by the Borrowers and the Restricted Subsidiaries to be
delivered to the Administrative Agent on or before thirty (30) days after the
Closing Date.
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5.7 FINANCIAL REPORTS; OTHER NOTICES.
Furnish to the Agents and each Lender:
(a) after the end of each of the first three quarterly accounting periods
of each of its fiscal years, as soon as prepared, but in any event at the same
time it files or is required to file the same with the SEC, the quarterly
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such fiscal quarter and the related unaudited consolidated statements
of income and cash flows (together with all footnotes thereto) of the Company
and its Subsidiaries for such fiscal quarter and the then elapsed portion of
such fiscal year, setting forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion of Borrower's previous
fiscal year, accompanied by a certificate, dated the date of furnishing, signed
by a Responsible Officer of the Company to the effect that such financial
statements accurately present in all material respects the consolidated
financial condition of the Company and its Subsidiaries and that such financial
statements have been prepared in accordance with GAAP consistently applied
(subject to year end adjustments); provided, however, during any period that the
Company has consolidated Subsidiaries which are not Consolidated Companies, the
Company shall also provide such financial information in a form sufficient to
enable the Agent and the Lenders to determine the compliance of the Borrowers
with the terms of this Credit Agreement with respect to the Consolidated
Companies;
(b) after the end of each of its fiscal years, as soon as prepared, but in
any event at the same time it files or is required to file the same with the
SEC, the annual audited report for that fiscal year for the Company and its
Subsidiaries, containing a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, stockholders' equity and cash flows (together with all
footnotes thereto) of the Company and its Subsidiaries for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year (which financial statements shall be reported on by the Company 's
independent certified public accountants, such report to state that such
financial statements fairly present in all material respects the consolidated
financial condition and results of operation of the Company and its Subsidiaries
in accordance with GAAP, and which shall not be subject to any "going concern"
or like qualification, exception, assumption or explanatory language or any
qualification, exception, assumption or explanatory language as to the scope of
such audit); provided, however, during any period that the Company has
consolidated Subsidiaries which are not Consolidated Companies, the Company
shall also provide such financial information in a form sufficient to enable the
Agents and the Lenders to determine the compliance of the Borrowers with the
terms of this Credit Agreement with respect to the Consolidated Companies;
(c) concurrently with the delivery of the financial statements described
in Section 5.7(a) and (b) above, a certificate of a Responsible Officer
substantially in the form of Schedule 5.7(c) stating that, to the best of such
Responsible Officer's knowledge, each of the Credit Parties during such period
observed or performed in all material respects all of its covenants and other
agreements, and satisfied in all material respects every condition, contained in
this Credit Agreement to be observed, performed or satisfied by it, and that
such Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and such certificate shall
include the calculations in reasonable detail required to indicate compliance
with Section 6.1 as of the last day of such period and that the financial
information provided have been prepared in accordance with GAAP applied
consistently for the periods related thereto;
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(d) promptly upon the filing thereof or otherwise becoming available,
copies of all financial statements, annual, quarterly and special reports, proxy
statements and notices sent or made available generally by the Company to its
public security holders, of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any of them with any
securities exchange or with the SEC, and of all press releases and other
statements made available generally to the public containing Material
developments in the business or financial condition of the Borrowers and the
Restricted Subsidiaries;
(e) promptly upon receipt thereof, copies of all financial statements of,
and all reports submitted by, independent public accountants to the Company in
connection with each annual, interim, or special audit of the Company's
financial statements, including without limitation, the comment letter submitted
by such accountants to management in connection with their annual audit;
(f) as soon possible and in any event within thirty (30) days after a
Borrower or any Restricted Subsidiary knows or has reason to know that any
"Reportable Event" (as defined in Section 4043(b) of ERISA) with respect to any
Plan has occurred (other than such a Reportable Event for which the PBGC has
waived the 30-day notice requirement under Section 4043(a) of ERISA) and such
Reportable Event involves a matter that has had, or is reasonably likely to
have, a Material Adverse Effect, a statement of a Responsible Officer of such
Borrower or such Restricted Subsidiary setting forth details as to such
Reportable Event and the action which such Borrower or such Restricted
Subsidiary proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC if a copy of such notice is
available to such Borrower or such Restricted Subsidiary;
(g) within 45 days following the end of each fiscal year of the Company,
beginning with the fiscal year ending September 30, 2005 an annual business plan
and budget of the Company and its Subsidiaries containing, among other things,
pro forma financial statements for the next fiscal year;
(h) prompt written notice of the occurrence of any Default or Event of
Default; and
(i) with reasonable promptness, such other information relating to each
Borrower's performance of this Credit Agreement or its financial condition as
may reasonably be requested from time to time by the Administrative Agent (at
the request of the Canadian Agent or any Lender).
5.8 NOTICES UNDER CERTAIN OTHER INDEBTEDNESS.
Promptly following its receipt thereof, the Company shall furnish the
Agents a copy of any notice received by it, the Canadian Borrower or any of the
Restricted Subsidiaries from the holder(s) of Indebtedness (or from any trustee,
agent, attorney, or other party acting on behalf of such holder(s)) in an amount
which, in the aggregate, exceeds U.S.$10,000,000, where such notice states or
claims the existence or occurrence of any default or event of default with
respect to such Indebtedness under the terms of any indenture, loan or credit
agreement, debenture, note, or other document evidencing or governing such
Indebtedness.
5.9 NOTICE OF LITIGATION.
Notify the Administrative Agent of any actions, suits or proceedings
instituted by any Person against a Borrower or any Restricted Subsidiary where
the uninsured portion of the money damages sought (which shall include any
deductible amount to be paid by such Borrower or such Restricted
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Subsidiary) is in excess of U.S.$10,000,000 or which is reasonably likely to
have a Material Adverse Effect. Said notice is to be given along with the
quarterly and annual reports required by Section 5.7, and is to specify the
amount of damages being claimed or other relief being sought, the nature of the
claim, the Person instituting the action, suit or proceeding, and any other
significant features of the claim.
5.10 ADDITIONAL GUARANTORS.
(a) The Company shall cause each of its Restricted Subsidiaries that is a
Domestic Subsidiary and not existing as of the Closing Date to promptly become a
U.S. Guarantor hereunder by promptly executing and delivering a Joinder
Agreement, within thirty (30) days of the creation or acquisition of any such
Restricted Subsidiary by the Company or other Restricted Subsidiary that is a
Domestic Subsidiary; provided, however, that in the case of any such Restricted
Subsidiary which holds no assets and is formed solely to effectuate a Permitted
Acquisition, the thirty (30) day period referenced above shall begin on the
earlier of (i) such Restricted Subsidiary acquiring any assets or (ii) the
consummation of the Permitted Acquisition for which such Restricted Subsidiary
was formed. The delivery of such documents shall be accompanied by such other
documents as the Administrative Agent may reasonably request (including without
limitation, certificates of incorporation, articles of incorporation and bylaws,
membership operating agreements, opinion letters and appropriate resolutions of
the Board of Directors of any such Guarantor).
(b) The Canadian Borrower shall cause each of its Restricted Subsidiaries
incorporated under the laws of Canada or a province thereof and not existing as
of the Closing Date to promptly become a Canadian Guarantor hereunder by
promptly executing and delivering a Joinder Agreement, within thirty (30) days
of the creation or acquisition of any such Restricted Subsidiary by the Canadian
Borrower or other Restricted Subsidiary of the Canadian Borrower; provided,
however, that in the case of any such Restricted Subsidiary which holds no
assets and is formed solely to effectuate a Permitted Acquisition, the thirty
(30) day period referenced above shall begin on the earlier of (i) such
Restricted Subsidiary acquiring any assets or (ii) the consummation of the
Permitted Acquisition for which such Restricted Subsidiary was formed. The
delivery of such documents shall be accompanied by such other documents as the
Administrative Agent may reasonably request (including without limitation,
certificates of incorporation, articles of incorporation and bylaws, membership
operating agreements, opinion letters and appropriate resolutions of the Board
of Directors of any such Guarantor).
(c) In the event that a Borrower or any Restricted Subsidiary sells any
Guarantor in a transaction permitted by Section 6.4, or in the event the Company
designates any Restricted Subsidiary as an Unrestricted Subsidiary in accordance
with the terms of this Credit Agreement, then such Guarantor shall be released
from all obligations under this Credit Agreement. Such release shall occur upon
the consummation of the sale or designation of any Restricted Subsidiary as an
Unrestricted Subsidiary, as the case may be, and the Administrative Agent shall
execute and deliver any releases or other documents reasonably requested by the
Company to effectuate such release.
5.11 PLEDGED ASSETS.
(a) Each U.S. Credit Party will (i) cause all of its Property that
constitutes Collateral to be subject at all times to first priority,
perfected Liens in favor of the Administrative Agent to secure the
Obligations pursuant to the terms and conditions of the U.S. Collateral
Documents or, with respect to any such Property acquired subsequent to the
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Closing Date, such other additional security documents as the
Administrative Agent shall reasonably request, subject in any case to
Permitted Liens and (ii) deliver such other documentation as the
Administrative Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, landlord's waivers, certified resolutions and other
organizational and authorizing documents of such Person, favorable
opinions of counsel to such Person (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Administrative
Agent's Liens thereunder) and other items of the types required to be
delivered pursuant to Section 4.01(c), all in form, content and scope
reasonably satisfactory to the Administrative Agent.
(b) Each Canadian Credit Party will (i) cause all of its Property
that constitutes Collateral to be subject at all times to first priority,
perfected Liens in favor of the Canadian Agent to secure the Canadian
Obligations pursuant to the terms and conditions of the Canadian
Collateral Documents or, with respect to any such Property acquired
subsequent to the Closing Date, such other additional security documents
as the Canadian Agent shall reasonably request, subject in any case to
Permitted Liens and (ii) deliver such other documentation as the Canadian
Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate PPSA financing statements, landlord's
waivers, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Canadian Agent's Liens thereunder) and other items of
the types required to be delivered pursuant to Section 4.01(c), all in
form, content and scope reasonably satisfactory to the Canadian Agent.
5.12 FURTHER ASSURANCES REGARDING REAL ESTATE.
Within in sixty (60) days after the Closing Date, the Administrative Agent
shall have received, in form and substance reasonable satisfactory to the
Administrative Agent:
(a) fully executed and notarized mortgages, deeds of trust or deeds
to secure debt (each, as the same may be amended, modified, restated or
supplemented from time to time, a "Mortgage Instrument" and collectively
the "Mortgage Instruments") encumbering the fee interest and/or leasehold
interest of any Credit Party in each of the real Properties designated in
Schedule 5.12(a) (each a "Mortgaged Property" and collectively the
"Mortgaged Properties");
(b) in the case of each leasehold Mortgaged Property, (i) such
estoppel letters, consents and waivers from the landlords on such
Mortgaged Property as may be obtained by the Credit Parties using
commercially reasonable efforts, which estoppel letters shall be in the
form and substance reasonably satisfactory to the Administrative Agent and
(ii) evidence that the applicable lease, a memorandum of lease with
respect thereto, or other evidence of such lease in form and substance
reasonably satisfactory to the Administrative Agent, has been or will be
recorded in all places to the extent necessary to enable the Mortgage
Instrument encumbering such leasehold interest to effectively create a
valid and enforceable first priority lien (subject to Permitted Liens) on
such leasehold interest in favor of the Administrative Agent (or such
other Person as may be required or desired under local law) for the
benefit of Lenders;
87
(c) maps or plats of an as-built survey of each owned Mortgaged
Property certified to the Administrative Agent and the title insurance
company issuing the policies referred to in Section 5.12(d) (the "Title
Insurance Company") in a manner reasonably satisfactory to each of the
Administrative Agent and the Title Insurance Company, dated a date
reasonably satisfactory to each of the Administrative Agent and the Title
Insurance Company by an independent professional licensed land surveyor,
which maps or plats and the surveys on which they are based shall be in
form and content reasonably satisfactory to the Administrative Agent and
be made in accordance with the Minimum Standard Detail Requirements for
Land Title Surveys jointly established and adopted by the American Land
Title Association and the American Congress on Surveying and Mapping in
1997 with all items from Table A thereof completed, except for Nos. 5 and
12;
(d) ALTA mortgagee title insurance policies issued by an underwriter
reasonable acceptable to the Administrative Agent (the "Mortgage
Policies"), assuring the Administrative Agent that each of the Mortgage
Instruments creates a valid and enforceable first priority mortgage lien
on the applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens and standard exceptions and exclusions
from coverage (as modified by the terms of any endorsements), which
Mortgage Policies shall otherwise be in form and substance reasonably
satisfactory to the Administrative Agent and shall include such
endorsements as are reasonably requested by the Administrative Agent;
(e) evidence as to (i) whether any Mortgaged Property is in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards (a "Flood Hazard Property") and (ii) if any
Mortgaged Property is a Flood Hazard Property, (A) the applicable Credit
Party's written acknowledgment of receipt of written notification from the
Administrative Agent (1) as to the fact that such Mortgaged Property is a
Flood Hazard Property and (2) as to whether the community in which each
such Flood Hazard Property is located is participating in the National
Flood Insurance Program and (B) copies of insurance policies or
certificates of insurance of the Consolidated Parties evidencing flood
insurance reasonably satisfactory to the Administrative Agent and naming
the Administrative Agent as sole loss payee on behalf of the Lenders;
(f) a legal opinion of special local counsel for the Credit Parties
for each state in which any Mortgaged Property is located;
(g) in the case of any personal property Collateral with a value
equal to or greater than U.S.$1,000,000 located at premises leased by a
Credit Party, such estoppel letters, consents and waivers from the
landlords on such real Property as may be obtained by the Credit Parties
using commercially reasonable efforts; provided that the failure to
provide such letters, consents and waivers shall not constitute a default
hereunder;
(h) in the event that, for any reason, the applicable Credit Party
that is the then owner of the Demopolis IDB Bonds or any other Credit
Party takes fee simple title to the real Property covered by the Demopolis
IDB Leasehold Parcel, promptly thereafter, but in no event less than
thirty (30) days after the applicable Credit Party takes fee simple title
to such real Property, the Credit Parties shall cause the applicable
Credit Party to deliver to the Administrative Agent a Mortgage Instrument
encumbering the fee interest of such Credit
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Party in such real Property and the other items required by clauses (a)
through (f) of Section 5.12.
5.13 ADDITIONAL FURTHER ASSURANCES.
(a) Upon the reasonable request of the Administrative Agent, the
Credit Parties shall promptly perform or cause to be performed any and all
acts and execute or cause to be executed any and all documents for filing
under the provisions of the Uniform Commercial Code, PPSA or any other
Requirement of Law which are necessary or advisable to maintain in favor
of the Administrative Agent or Canadian Agent, as applicable, for the
benefit of the applicable Secured Parties, Liens on the Collateral that
are duly perfected in accordance with the requirements of, or the
obligations of the Credit Parties under, the Credit Documents and all
applicable Requirements of Law (including, without limitation, any
additional Security Documents as may be required to create and perfect the
Canadian Lenders Liens in Collateral owned by a Canadian Credit Party
organized or having assets in the province of Quebec, and customary legal
opinions covering the creation and perfection of security interests under
applicable Quebec law).
(b) Within 45 days after the Closing Date, the Canadian Borrower and
the Canadian Guarantors shall have delivered evidence reasonably
satisfactory to the Canadian Agent and the Administrative Agent of the
registration of the Notices of Grant of Security Interest with the
Canadian Intellectual Property Office.
(c) Within 45 days after the Closing Date, the Company and the
applicable U.S. Guarantors shall have filed such documents with the U.S.
Patent and Trademark Office as reasonable requested by the Administrative
Agent so that the applicable records correctly reflect the transfer of all
registered Intellectual Property from the Sellers to the Credit Parties in
connection with the Gulf States Acquisition as well as the results of all
intercompany transfers of Intellectual Property effected prior to the
Closing Date or intended to be effected by the Company following the
Closing Date.
(d) Within 60 days after the Closing Date (or such extended period
of time as agreed to by the Administrative Agent), the Credit Parties
shall have provided the Administrative Agent with evidence of the
termination of certain Intellectual Property notice filings and the
termination or amendment of certain UCC filings, in each case as
reasonably requested by the Administrative Agent.
5.14 USE OF PROCEEDS.
Use the Loans solely for the purposes provided in Section 3.24.
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ARTICLE VI
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note shall
remain unpaid:
6.1 FINANCIAL REQUIREMENTS.
The Borrowers will not:
(a) Consolidated Interest Coverage Ratio. Suffer or permit the
Consolidated Interest Coverage Ratio as of the last day of each fiscal quarter
ending during the periods set forth below, as calculated for a period consisting
of the four preceding fiscal quarters, to be less than the ratio set forth
opposite such period.
PERIOD RATIO
--------------------------------------- ---------
Closing Date through March 31, 2006 2.50:1.00
April 1, 2006 through December 31, 2006 2.75:1.00
January 1, 2007 through Maturity Date 3.00:1.00
(b) Leverage Ratio. Permit the Leverage Ratio as of the last day of each
fiscal quarter ending during the periods set forth below, as calculated for a
period consisting of the four preceding fiscal quarters, to exceed the ratio set
forth opposite such period:
PERIOD RATIO
--------------------------------------- ---------
Closing Date through June 30, 2006 5.00:1.00
July 1, 2006 through December 31, 2006 4.50:1.00
January 1, 2007 through June 30, 2007 4.25:1.00
July 1, 2007 through June 30, 2008 4.00:1.00
July 1, 2008 though Maturity Date 3.75:1.00
provided, however, that in the event that the Lenders' security interest
in the Collateral is terminated and released pursuant to Section 8.12(b) as a
result of the Company's satisfying the Leverage Ratio requirements for such
release set forth in clause (ii) of Section 8.12(b), the Borrowers will not, at
any time thereafter, permit the Leverage Ratio as of the end of any fiscal
quarter to exceed 3:50 to 1:00.
(c) Consolidated Net Worth. Permit Consolidated Net Worth as of the last
day of each fiscal quarter to be less than an amount equal to the sum of (i)
U.S.$375,000,000, plus (ii) 50% of cumulative Consolidated Net Income since June
30, 2005, minus (iii) any charges taken since the Closing Date for the
impairment of goodwill taken pursuant to FASB 142.
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6.2 LIENS.
The Borrowers will not, and will not permit any Restricted Subsidiary to,
create, assume or suffer to exist any Lien upon any of their respective
properties or assets (hereinafter "Properties") whether now owned or hereafter
acquired; provided, however, that this Section 6.2 shall not apply to the
following:
(a) any Lien for taxes not yet due or taxes or assessments or other
governmental charges which are being actively contested in good faith by
appropriate proceedings and for which adequate reserves have been established;
(b) any Liens, pledges or deposits in connection with worker's
compensation or social security, assessments or other similar charges or
deposits incidental to the conduct of the business of a Borrower or any
Restricted Subsidiary or the ownership of any of their assets or properties
which were not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not in the aggregate materially
detract from the value of their Properties or materially impair the use thereof
in the operation of their businesses;
(c) statutory Liens of carriers, warehousemen, mechanics, materialmen and
other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established;
(d) pledges or deposits for the purpose of securing a stay or discharge in
the course of any legal proceeding provided that the aggregate amount of such
pledges or deposits outstanding at any one time does not exceed U.S.$10,000,000;
(e) Liens consisting of encumbrances in the nature of zoning restrictions,
easements, rights and restrictions of record on the use of real property on the
date of the acquisition thereof and statutory Liens of landlords and lessors
which in each case do not materially detract from the value of such property or
impair the use thereof;
(f) any Lien in favor of the United States of America or any department or
agency thereof, or in favor of any state government or political subdivision
thereof, or in favor of a prime contractor under a government contract of the
United States, or of any state government or any political subdivision thereof,
and, in each case, resulting from acceptance of partial, progress, advance or
other payments in the ordinary course of business under government contracts of
the United States, or of any state government or any political subdivision
thereof, or subcontracts thereunder and which do not materially impair the use
of such Property as currently being utilized by a Borrower or any Restricted
Subsidiary;
(g) any Lien existing on the date hereof and listed on Schedule 6.2;
(h) Liens securing Indebtedness permitted under Section 6.3(d) (including
any such Liens existing on any properties of any Person at the time of its
Acquisition by a Borrower or any Restricted Subsidiary); provided that such
Liens (i) are placed upon any asset at the time of its acquisition (or within 60
days thereafter); (ii) do not at any time encumber any properties other than the
property acquired;
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(i) Liens securing Indebtedness evidenced by the industrial development
bonds described on Schedule 3.18;
(j) Liens created by the issuance of a Letter of Credit to secure
obligations under Hedging Agreements permitted by Section 6.3(e), but only to
the extent such Liens secure obligations under Hedging Agreements with any
Lender, or any Affiliate of a Lender;
(k) any Lien evidencing the transfer of any receivables pursuant to any
Permitted Securitization Transaction;
(l) any interest of title of a lessor under, and Liens arising from UCC
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases not prohibited by this Credit
Agreement;
(m) any interest of title of an owner of equipment or inventory on loan or
consignment to a Credit Party, and Liens arising from UCC financing statements
(or equivalent filings, registrations or agreements in foreign jurisdictions)
relating to such arrangements entered into in the ordinary course of business
(but excluding any general inventory financing);
(n) any Lien renewing, extending, refinancing or refunding any Lien
permitted by subsection (c), (d), (e), (f), (g), (h), (i), (j), (k) or (l)
above; provided, however, that (i) the Property covered thereby is not
increased, (ii) the amount secured or benefited thereby is not increased, (iii)
the direct or any contingent obligor with respect thereto is not changed, and
(iv) any renewal or extension of the obligations secured or benefited thereby is
permitted by Section 6.3; and
(o) other Liens in addition to those permitted by subsections (a) through
(n) above; provided, however, that the aggregate outstanding principal amount of
all obligations secured by Liens permitted by this subsection (o) shall not at
any time outstanding exceed (i) if (A) both before and after giving effect to
the creation or assumption of such Lien, the Company has Investment Grade Status
from at least one Rating Agency and/or (B) the Company shall have delivered to
the Administrative Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to the incurrence of such Indebtedness
secured by such Liens and to the concurrent retirement of any other
Indebtedness, the Leverage Ratio does not exceed 3.00:1.00 on a Pro Forma Basis
as of the most recent fiscal quarter end for which the Administrative Agent has
received the information required by subsections (a) through (d) of Section 5.7,
ten percent (10%) of the Consolidated Net Worth determined at such time, and
(ii) in all other cases, U.S.$15,000,000.
6.3 INDEBTEDNESS.
The Borrowers will not, and will not permit any Restricted Subsidiary to,
at any time, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of any Restricted Subsidiary owing to a Borrower or any
Guarantor;
(c) Indebtedness existing as of the Closing Date and, with respect to any
such Indebtedness in an outstanding principal amount in excess of $5,000,000,
set forth on Schedule 3.18;
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and renewals, refinancings or extensions thereof in a principal amount not in
excess of that outstanding as of the date of such renewal, refinancing or
extension; provided that the terms relating to principal amount, amortization,
maturity, collateral (if any) and subordination (if any), and other material
terms taken as a whole, of any such refinancing, refunding, renewing or
extending Indebtedness, and of any agreement entered into and of any instrument
issued in connection therewith, are no less favorable in any material respect to
the Credit Parties or the Lenders than the terms of any agreement or instrument
governing the Indebtedness being refinanced, refunded, renewed or extended and
the interest rate applicable to any such refinancing, refunding, renewing or
extending Indebtedness does not exceed the then applicable market interest rate.
(d) Indebtedness of the Borrowers and the Restricted Subsidiaries incurred
after the Closing Date consisting of Capital Leases or Indebtedness incurred to
provide all or a portion of the purchase price or cost of construction of an
asset and any refinancing thereof; provided that (i) such Indebtedness when
incurred shall not exceed the purchase price or cost of construction of such
asset; (ii) no such Indebtedness shall be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time of such
refinancing, and (iii) the total amount of all such Indebtedness shall not
exceed at any time outstanding (A) if (I) both before and after giving effect to
such Indebtedness, the Company has Investment Grade Status from at least one
Rating Agency and/or (II) the Company shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect
on a Pro Forma Basis to the incurrence of such Indebtedness and to the
concurrent retirement of any other Indebtedness, the Leverage Ratio does not
exceed 3.00:1.00 as of the most recent fiscal quarter end for which the
Administrative Agent has received the information required by subsections (a)
through (d) of Section 5.7, ten percent (10%) of Consolidated Net Worth
determined at such time; and (B) in all other cases, U.S.$20,000,000.
(e) Indebtedness and obligations owing under Hedging Agreements so long as
such Hedging Agreements are not entered into for speculative purposes;
(f) Guaranty Obligations of the Company in respect of Indebtedness of a
Restricted Subsidiary to the extent such Indebtedness is permitted to exist or
be incurred pursuant to this Section 6.3;
(g) obligations of the Borrowers or any Restricted Subsidiary in
connection with any Permitted Securitization Transaction, to the extent such
obligations constitute Indebtedness;
(h) Indebtedness of the Company completion guarantees, performance bonds,
surety bonds or customs bonds incurred in the ordinary course of business in an
aggregate principal amount not to exceed at any time outstanding
U.S.$[$2,000,000].
(i) additional Indebtedness of the Borrowers and the Restricted
Subsidiaries in an aggregate principal amount not to exceed U.S.$20,000,000 at
any time outstanding;
(j) additional unsecured Indebtedness of the Company; provided that (i)
the terms, taken as a whole, of any such Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith (including,
without limitation, with respect to the amortization schedules, redemption
provisions, maturities, covenants, defaults and remedies) are not materially
less favorable to the Consolidated Companies or the Lenders than the terms of
the Senior Note Indenture, as in effect on the Closing Date, (ii) such
Indebtedness has a maturity no earlier than December 31, 2010, and (iii) the
aggregate principal amount of all such Indebtedness incurred after the Closing
Date
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(together with any accumulated, pay-in-kind, or capitalized interest thereon)
shall not exceed $75,000,000;
(k) additional Indebtedness of the Restricted Subsidiaries; provided that
(i) (A) both before and after giving effect to such Indebtedness, the Company
has Investment Grade Status from at least one Rating Agency and/or (B) the
Company shall have delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to the
incurrence of such Indebtedness and to the concurrent retirement of any other
Indebtedness of the Restricted Subsidiaries, the Leverage Ratio does not exceed
3.00:1.00 as of the most recent fiscal quarter end for which the Administrative
Agent has received the information required by subsections (a) through (d) of
Section 5.7; and (ii) the aggregate principal amount of such Indebtedness, plus
the aggregate principal amount of the Indebtedness of the Restricted
Subsidiaries permitted pursuant to clause (g) above, shall not at any time
exceed twenty percent (20%) of Consolidated Net Worth determined at such time;
and
(l) additional Indebtedness of the Company; provided that (i) both before
and after giving effect to such Indebtedness, the Company has Investment Grade
Status from at least one Rating Agency and/or (ii) the Company shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to the incurrence of
such Indebtedness and to the concurrent retirement of any other Indebtedness of
the Company, the Leverage Ratio does not exceed 3.00:1.00 as of the most recent
fiscal quarter end for which the Administrative Agent has received the
information required by subsections (a) through (d) of Section 5.7.
6.4 MERGER AND SALE OF ASSETS.
Neither Borrower will, without the prior written consent of the Required
Lenders, merge or consolidate with any other corporation or sell, lease or
transfer or otherwise dispose of all or, during any twelve-month period, any
part of its assets, to any person or entity other than in the ordinary course of
business, nor will the Borrowers permit any Credit Party or any Restricted
Subsidiary to take any of the above actions; provided that notwithstanding any
of the foregoing limitations, if no Event of Default shall then exist or
immediately thereafter will begin to exist, the Borrowers, the other Credit
Parties and the Restricted Subsidiaries may take the following actions:
(a) (i) the Company may merge or consolidate with any of its Subsidiaries
provided that the Company shall be the continuing or surviving corporation, (ii)
the Canadian Borrower may merge or consolidate with any of its Subsidiaries
provided that the Canadian Borrower shall be the continuing or surviving
corporation, (iii) any Credit Party other than the Company or the Canadian
Borrower may merge or consolidate with any other Credit Party other than the
Company or the Canadian Borrower, (iv) any Consolidated Company which is not a
Credit Party may be merged or consolidated with or into any Credit Party
provided that such Credit Party shall be the continuing or surviving
corporation, (v) any Consolidated Company which is not a Credit Party may be
merged or consolidated with or into any other Consolidated Company which is not
a Credit Party, (vi) any Subsidiary of the Company may merge with any Person
that is not a Credit Party in connection with a sale of Property permitted under
this Section 6.4, and (vii) the Company or any Subsidiary of the Company may
merge with any Person other than a Consolidated Company in connection with a
Permitted Acquisition provided that, if such transaction involves the Company or
the Canadian Borrower, the Company or the Canadian Borrower, as the case may be,
shall be the continuing or surviving corporation;
94
(b) Any Restricted Subsidiary may sell, lease, transfer or otherwise
dispose of any of its Property to (i) a Borrower, (ii) any Guarantor or (iii)
any Subsidiary of the Company, provided that, with respect to transfers
described in clause (iii), upon completion of such transaction (A) there shall
exist no Default or Event of Default and (B) the Subsidiary to which the
Restricted Subsidiary's Property is sold, leased, transferred or otherwise
disposed shall be a Restricted Subsidiary and a Guarantor;
(c) Each Borrower may sell, lease, transfer or otherwise dispose of its
Property to any Subsidiary of the Company; provided that upon completion of a
transaction described in this Section 6.4(c), there shall exist no Default or
Event of Default and the Subsidiary to which the Borrower's Property is sold,
leased, transferred or otherwise disposed shall be a Restricted Subsidiary and a
Guarantor;
(d) The Borrowers and the Restricted Subsidiaries may sell, lease,
transfer or otherwise dispose of any of their Property in a transaction
constituting an Investment permitted by Section 6.10;
(e) The Borrowers and the Restricted Subsidiaries may sell, lease,
transfer or otherwise dispose of any of Property in the ordinary course of
business which Property is obsolete or worn out;
(f) The Borrowers and the Restricted Subsidiaries may transfer receivables
to one or more Permitted Securitization Subsidiaries so long as such transfer is
made to consummate a Permitted Securitization Transaction;
(g) In addition to amounts covered by subsections (a) through (f) above,
the Borrowers and the Restricted Subsidiaries may sell, lease or transfer (i)
Gulf States Tangible Assets with an aggregate fair market value for all such
transactions not to exceed $15 million, and (ii) other Property (including Gulf
States Tangible Assets) with an aggregate fair market value for all such
transactions not to exceed U.S.$25,000,000; and
(h) In addition to amounts covered by subsections (a) through (g) above,
the Borrowers and the Restricted Subsidiaries may sell, lease, transfer or
otherwise dispose of any of Property; provided that (i) both before and after
giving effect to such any such transaction, the Company has Investment Grade
Status from at least one Rating Agency and/or or (ii) the Company shall have
delivered to the Administrative Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect to such transaction on a Pro Forma Basis,
the Leverage Ratio does not exceed 3.00:1.00 as of the most recent fiscal
quarter end for which the Administrative Agent has received the information
required by subsections (a) through (d) of Section 5.7.
provided, however, and notwithstanding the foregoing provisions of this
Section 6.4, the Credit Parties shall no under any circumstances sell, transfer
or otherwise dispose of the Demopolis IDB Bonds to any Person other than a
Credit Party.
6.5 TRANSACTIONS WITH AFFILIATES.
Other than in connection with a Permitted Securitization Transaction, the
Borrowers will not, and will not permit any Restricted Subsidiary to, enter into
or be a party to any transaction or arrangement with any Affiliate (including
without limitation, the purchase from, sale to or exchange of property with, or
the rendering of any service by or for, any Affiliates), except in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's or such
Restricted
95
Subsidiary's business and upon fair and reasonable terms no less favorable to
such Borrower or such Subsidiary than such party would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
6.6 NATURE OF BUSINESS.
Neither Borrower nor any Restricted Subsidiary will engage in any business
if, as a result, the primary nature of the business, taken on a consolidated
basis, which would then be engaged in by the Borrowers and the Restricted
Subsidiaries would be fundamentally changed from the general nature of the
business engaged in by the Borrowers and the Restricted Subsidiaries on the date
of this Credit Agreement, which the parties agree is the manufacture and sale of
paperboard (included corrugated medium and gypsum linerboard), paperboard and
plastic packaging products, corrugated packaging, sheet stock and merchandising
displays, other types of packaging and packaging material and similar or
complementary products and services connected or incidental thereto, including,
without limitation, any e-commerce initiatives and brokerage operations.
6.7 REGULATIONS T, U AND X.
The Borrowers will not nor will they permit any Subsidiary of the Company
to take any action that would result in any non-compliance of the Advances made
hereunder with Regulations T, U and X of the Board of Governors of the Federal
Reserve System.
6.8 ERISA COMPLIANCE.
Neither Borrower nor any Subsidiary of the Company will incur any material
"accumulated funding deficiency" within the meaning of Section 302(a)(2) of
ERISA, or any material liability under Section 4062 of ERISA to the Pension
Benefit Guaranty Corporation ("PBGC") established thereunder in connection with
any Plan.
6.9 LIMITATIONS ON SUBSIDIARIES WHICH ARE NOT RESTRICTED SUBSIDIARIES.
The Borrowers will not allow any Unrestricted Subsidiary:
(a) to own any Capital Stock or right or option to acquire Capital Stock
of a Borrower or any Restricted Subsidiary, or own or hold any Lien on any
property of a Borrower or any Restricted Subsidiaries other than in connection
with any Permitted Securitization Transaction; and
(b) to create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to, or suffer to exist any
Indebtedness pursuant to which the lender has recourse to a Borrower or any
Restricted Subsidiary or to any of the assets of a Borrower or any Restricted
Subsidiary ("Recourse Debt") other than (i) Standard Securitization Undertakings
and Recourse Debt which is incurred in connection with a Permitted
Securitization Transaction and (ii) other Recourse Debt that does not exceed
U.S.$15,000,000 at any time outstanding.
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6.10 LIMITATION ON INVESTMENTS.
The Borrowers will not, and will not permit any Restricted Subsidiary to,
make any Investment in any Person except for:
(a) Investments held in the form of cash and Cash Equivalents;
(b) Investments existing as of the Closing Date and, with respect to
any Investment with value of $2,000,000 or more as of the Closing Date,
set forth in Schedule 6.10;
(c) receivables owing to the Company or any of its Subsidiaries and
advances to suppliers, in each case if created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms;
(d) Investments in and loans to any Credit Parties; provided,
however, that the aggregate amount of all Investments in and loans to any
Canadian Credit Party by the U.S. Credit Parties made after the Closing
Date shall not exceed U.S.$10,000,000 at any one time outstanding;
(e) loans and advances to employees (other than officers or
directors) in an aggregate amount not to exceed U.S.$10,000,000 at any
time outstanding;
(f) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
in the ordinary course of business;
(g) Permitted Acquisitions;
(h) Investments in Permitted Joint Ventures;
(i) Investments in GOLIATH Solutions, LLC in an aggregate
outstanding amount at any time for all such Investments made after the
Closing Date not to exceed U.S.$2,000,000; and
(j) additional Investments of a nature not contemplated by the
foregoing subsections (a) through (i), provided that the aggregate
outstanding amount at any time of all such Investments made after the
Closing Date pursuant to this subsection (h) shall not, at any time,
exceed U.S.$15,000,000.
Investments shall be valued at cost, less any return of capital thereon.
6.11 LIMITATION ON SECURITIZATION UNDERTAKINGS OF THE BORROWERS AND
RESTRICTED SUBSIDIARIES.
Neither Borrower nor any Restricted Subsidiary shall incur or become
obligated in respect of any Indebtedness or other obligation in connection with
any Permitted Securitization Transaction other than Funded Debt (i) resulting
from the transfer of any receivable in connection with a Permitted
Securitization Transaction so long as such Funded Debt is non-recourse as to the
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Borrowers and any Restricted Subsidiary (other than as to the transferred
receivables) and (ii) consisting of Standard Securitization Undertakings.
6.12 RESTRICTIVE AGREEMENTS.
Neither Borrower nor any Restricted Subsidiary shall, directly or
indirectly, enter into, incur or permit to exist any agreement that prohibits,
restricts or imposes any condition upon (a) the ability of a Borrower or any
Restricted Subsidiary to create, incur or permit any Lien upon any of its assets
or properties, whether now owned or hereafter acquired, or (b) the ability of
the Canadian Borrower or any Restricted Subsidiary to pay dividends or other
distributions with respect to its common stock, to make or repay loans or
advances to the Company, the Canadian Borrower or any other Restricted
Subsidiary, to guarantee Indebtedness of the a Borrower or any other Restricted
Subsidiary or to transfer any of its property or assets to a Borrower or any
Restricted Subsidiary; provided, that (i) the foregoing shall not apply to
restrictions or conditions imposed by law or by this Credit Agreement or any
other Credit Document, (ii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Restricted Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Restricted Subsidiary that is sold and such sale is
permitted hereunder, (iii) clause (a) shall not apply to (A) restrictions or
conditions imposed by any agreement relating Indebtedness permitted under
Section 6.3(d) if such restrictions and conditions apply only to the property or
assets securing such Indebtedness, (B) customary provisions in leases
restricting the assignment thereof or (C) restrictions or conditions imposed by
the Senior Note Indenture.
6.13 RESTRICTED PAYMENTS.
The Borrowers will not, and will not permit any Restricted Subsidiaries
to, declare or make, or agree to pay or make, directly or indirectly, any
dividend on any class of its stock, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement, defeasance or other acquisition of, any shares of common
stock or any options, warrants, or other rights to purchase such common stock,
whether now or hereafter outstanding (each, a "Restricted Payment"), except for
(a) dividends payable by the Company solely in shares of any class of its common
stock in a manner consistent with past practices, (b) Restricted Payments made
by any Subsidiary to a Borrower or to another Restricted Subsidiary, (c) cash
dividends paid on the common stock of the Company; provided, that (i) no Default
or Event of Default has occurred or would occur as a result of paying such
dividend or repurchases, (ii) at the time of payment of such dividend and after
giving effect to such payment, the Company could incur an additional U.S.$1.00
of Funded Debt under Sections 6.1 and 6.3, respectively, (d) cash repurchases of
Company's common stock so long as, in the case of any Restricted Payment
describe in this clause (d) only, (x) no Default or Event of Default has
occurred or would occur as a result of such payment; and (y) at the time of such
payment and after giving effect to such payment, the Company could incur an
additional U.S.$1.00 of Funded Debt under Sections 6.1 and 6.3, respectively, of
this Credit Agreement, and (z) at the time such Restricted Payment is made, the
aggregate amount of all shares of the Company's common stock repurchased
pursuant to this clause (c) shall not exceed 200,000 in any fiscal year, and (e)
cash repurchases of Company's common stock in an aggregate amount not to exceed,
from the Closing Date through the Maturity Date, the sum of (i) U.S.$20,000,000
plus (ii) fifty (50)% of the amount by which cumulative Consolidated Net Income
commencing with the fiscal year ending September 30, 2005 exceeds
U.S.$20,000,000; so long as, in the case of any Restricted Payment describe in
this clause (e) only, (x) no Default or Event of Default has occurred or would
occur as a result of such payment; (y) at the time of such payment and after
giving effect to
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such payment, the Company could incur an additional U.S.$1.00 of Funded Debt
under Sections 6.1 and 6.3, respectively, of this Credit Agreement, and (z) at
the time of such Restricted Payment, the Company has Investment Grade Status
from at least one Rating Agency.
6.14 ADVERSE ARRANGEMENTS.
The Borrowers will not, and will not permit any Restricted Subsidiary to,
enter into any arrangement, contractual or otherwise, that would reasonably be
expected to have a Material Adverse Effect.
6.15 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
(a) Neither Borrower will, and will not permit any Restricted Subsidiary
to, change its fiscal year nor amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document) in any manner materially adverse to the
interests of the Lenders without the prior written consent of the Administrative
Agent, nor without the prior written consent of the Administrative Agent, amend,
modify, cancel or terminate or fail to renew or extend or permit the amendment,
modification, cancellation or termination of any of the Material Contracts,
except in the event that such amendments, modifications, cancellations or
terminations would not reasonably be expected to have a Material Adverse Effect.
(b) Without limitation of the requirements of the foregoing clause (a),
neither Borrower will, and will not permit any Restricted Subsidiary to, take
any action with respect to the Demopolis IDB Bonds that could have an adverse
effect on the Lenders, the Consolidated Companies, the interest of the
Consolidated Companies in and to the Demopolis Leasehold and/or the security
interests of the Administrative Agent under the U.S. Security Documents without
the prior written consent of the Administrative Agent.
6.16 OWNERSHIP OF RESTRICTED SUBSIDIARIES.
Notwithstanding any other provisions of this Agreement to the contrary,
the Borrowers will not (i) permit any Person (other than the Company or any
Wholly Owned Subsidiary of the Company) to own any Capital Stock of any
Restricted Subsidiary, except (A) to qualify directors where required by
applicable law or to satisfy other requirements of applicable law with respect
to the ownership of Capital Stock of Foreign Subsidiaries or (B) as a result of
or in connection with a dissolution, merger, consolidation or disposition of a
Subsidiary not prohibited by Section 6.4, or (ii) permit, create, incur, assume
or suffer to exist any Lien on any Capital Stock of any Restricted Subsidiary.
6.17 CAPITAL EXPENDITURES.
Permit Consolidated Capital Expenditures for any fiscal year to exceed
$90,000,000, plus the unused amount available for Consolidated Capital
Expenditures under this Section 6.17 for the immediately preceding fiscal year
(excluding any carry forward available from any prior fiscal year); provided,
however, that with respect to any fiscal year, Consolidated Capital Expenditures
made during such fiscal year shall be deemed to be made first with respect to
the applicable limitation for such fiscal year and then with respect to any
carry-forward from the immediately preceding fiscal year.
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ARTICLE VII
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payments. A Borrower shall fail to make promptly when due (including,
without limitation, by mandatory prepayment) any principal payment with respect
to the Loans, or any Credit Party shall fail to make any payment of interest,
fee or other amount payable hereunder within three (3) Business Days of the due
date thereof; or
(b) Covenants Without Notice. Any Credit Party shall fail to observe or
perform any covenant or agreement contained in subsections (a), (b), (c) and (d)
of Section 5.7, Section 5.8, Section 5.9, Section 5.10 or Article 6; or
(c) Other Covenants. Any Credit Party shall fail to observe or perform any
covenant or agreement contained in this Agreement, other than those referred to
in subsections (a) and (b) of Section 7.1, and such failure shall remain
unremedied for 30 days after the earlier of (i) an Responsible Officer of a
Credit Party obtaining knowledge thereof, or (ii) written notice thereof shall
have been given to the Company by an Agent or any Lender; or
(d) Representations. Any representation or warranty made or deemed to be
made by a Credit Party or by any of its officers under this Agreement or any
other Credit Document (including the Schedules attached thereto), or any
certificate or other document submitted to the Agents or the Lenders by any such
Person pursuant to the terms of this Agreement or any other Credit Document,
shall be incorrect in any material respect when made or deemed to be made or
submitted; or
(e) Non-Payments of Other Indebtedness. Any Credit Party shall fail to
make when due (whether at stated maturity, by acceleration, on demand or
otherwise, and after giving effect to any applicable grace period) any payment
of principal of or interest on any Indebtedness (other than the Credit Party
Obligations) exceeding U.S.$10,000,000 individually or in the aggregate; or
(f) Defaults Under Other Agreements. Any Credit Party shall (i) fail to
observe or perform within any applicable grace period any covenants or
agreements contained in any agreements or instruments relating to any of its
Indebtedness (other than the Credit Documents) exceeding U.S.$10,000,000
individually or in the aggregate, or any other event shall occur if the effect
of such failure or other event is to accelerate, or to permit the holder of such
Indebtedness or any other Person to accelerate, the maturity of such
Indebtedness; or any such Indebtedness shall be required to be prepaid (other
than by a regularly scheduled required prepayment) in whole or in part prior to
its stated maturity; or (ii) breach or default any Hedging Agreement (subject to
any applicable cure periods) and the termination value owed by such Credit Party
as a result thereof shall exceed U.S.$10,000,000; or
(g) Bankruptcy. Any Credit Party shall commence a voluntary case
concerning itself under the Bankruptcy Code or applicable foreign bankruptcy
laws; or an involuntary case for bankruptcy is commenced against any Credit
Party and the petition is not controverted within 30
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days, or is not dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) or similar official under
applicable foreign bankruptcy laws is appointed for, or takes charge of, all or
any substantial part of the property of the Borrowers or any of the Restricted
Subsidiaries; or a Credit Party commences proceedings of its own bankruptcy or
to be granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to the Credit Parties or there is commenced
against any Credit Party any such proceeding which remains undismissed for a
period of 60 days; or any Credit Party is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or any Credit Party suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or any Credit Party makes a general assignment
for the benefit of creditors; or any Credit Party shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or any Credit Party shall call a meeting of its creditors
with a view to arranging a composition or adjustment of its debts; or any Credit
Party shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Credit Party for the purpose of effecting any of the foregoing; or
(h) ERISA. A Plan of a Credit Party or a Plan subject to Title IV of ERISA
of any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum funding
standard required by applicable law, the terms of such Plan, Section 412
of the Code or Section 302 of ERISA for any plan year or a waiver of such
standard is sought or granted with respect to such Plan under applicable
law, the terms of such Plan or Section 412 of the Code or Section 303 of
ERISA; or
(ii) is being, or has been, terminated or the subject of termination
proceedings under applicable law or the terms of such Plan; or
(iii) shall require any Credit Party to provide security under
applicable law, the terms of such Plan, Section 401 or 412 of the Code or
Section 306 or 307 of ERISA; or
(iv) results in a liability to a Credit Party under applicable law,
the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or
other event a liability to the PBGC or a Plan that would have a
Material Adverse Effect; or
(i) Money Judgment. Judgments or orders for the payment of money in excess
of U.S.$10,000,000 individually or in the aggregate or otherwise having a
Material Adverse Effect shall be rendered against any Credit Party and such
judgment or order shall continue unsatisfied (in the case of a money judgment)
and in effect for a period of 30 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement or
otherwise); or
(j) Default Under other Credit Documents; The Guaranty. (a) There shall
exist or occur any "Event of Default" as provided under the terms of any Credit
Document, or any Credit Document ceases to be in full force and effect or the
validity or enforceability thereof is disaffirmed by or on behalf of any Credit
Party, or at any time it is or becomes unlawful for any Credit Party to perform
or
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comply with its obligations under any Credit Document, or the obligations of any
Credit Party under any Credit Document are not or cease to be legal, valid and
binding on any Credit Party; or (b) without limiting the foregoing, the Guaranty
or any provision thereof shall cease to be in full force and effect or any
Guarantor or any Person acting by or on behalf of any Guarantor shall deny or
disaffirm any Guarantor's obligations under the Guaranty; or
(k) Change in Control. A Change in Control shall occur; or
(l) Securitization Events. There shall occur any breach of any covenant by
the a Borrower, any Restricted Subsidiary or any Permitted Securitization
Subsidiary contained in any agreement relating to Permitted Securitization
Transaction causing or permitting the acceleration of the obligations thereunder
or requiring the prepayment of such obligations or termination of such
securitization program prior to its stated maturity or term; provided, however,
such breach shall not constitute an Event of Default unless a Credit Party shall
have any Material liability or payment obligation under such Permitted
Securitization Transaction; or
(m) Governmental Licenses; Permits. There shall occur any loss,
termination, cancellation or other material impairment of any governmental
license, certificate, or permit by any Credit Party which is reasonably likely
to have a Material Adverse Effect.
7.2 ACCELERATION; REMEDIES.
Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent (or, where specified, the Canadian Agent) may, or upon the
request and direction of the Required Lenders shall, by written notice to the
Borrowers take any of the following actions (including any combination of such
actions):
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration; Demand. (i) Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other indebtedness or
obligations (including, without limitation, Fees) of any and every kind owing by
any Credit Party to the Agents and/or any of the Lenders hereunder to be due and
direct the Company to pay to the Administrative Agent cash collateral as
security for the LOC Obligations for subsequent drawings under then outstanding
Letters of Credit in an amount equal to 105% of the maximum amount which may be
drawn under Letters of Credit then outstanding, whereupon the same shall be
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Credit Party, and (ii) with
respect to the Canadian Agent, demand that the Canadian Borrower deliver cash to
the Canadian Agent, for the benefit of the BA Lenders and Acceptance Lenders, in
the amount of 100% of the aggregate Face Amount of outstanding Bankers'
Acceptances and Acceptance Notes.
(c) Enforcement of Rights. Exercise any and all rights and remedies
created and existing under the Credit Documents, whether at law or in equity.
(d) Rights Under Applicable Law. Exercise any and all rights and remedies
available to the Administrative Agent or the Lenders under applicable law.
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Notwithstanding the foregoing, if an Event of Default specified in Section
7.1(g) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Agents and/or any of the Lenders
hereunder automatically shall immediately become due and payable without
presentment, demand, protest or the giving of any notice or other action by the
Agents or the Lenders, all of which are hereby waived by the Credit Parties.
ARTICLE VIII
AGENCY PROVISIONS
8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints Wachovia as the
Administrative Agent of such Lender under this Credit Agreement and Bank of
America, N.A., acting through its Canada branch, as the Canadian Agent under
this Credit Agreement, and each such Lender irrevocably authorizes Wachovia, as
the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Credit Agreement and to exercise such powers and
perform such duties as are expressly delegated to the Agents by the terms of
this Credit Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Credit Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or otherwise exist against the Administrative Agent.
Without limiting the powers of the Canadian Agent under this Agreement and
the Canadian Security Documents, each Canadian Lender and the Canadian Agent
acknowledges and agrees that Bank of America, N.A., acting through its Canada
Branch shall, for the purposes of holding any security granted under the
Canadian Security Documents pursuant to the laws of the Province of Quebec to
secure payment of bonds or any similar instruments (collectively, the "BONDS"),
be the holder of an irrevocable power of attorney (fonde de pouvoir), within the
meaning of Article 2692 of the Civil Code of Quebec, for all present and future
Canadian Lenders as well as holders and depositaries of the Bonds. Each of the
Canadian Lenders and the Canadian Agent constitutes, to the extent necessary,
Bank of America, N.A., acting through its Canada Branch, as the holder of such
irrevocable power of attorney (fonde de pouvoir) in order to hold security
granted under the Canadian Security Documents in the Province of Quebec to
secure payment of the Bonds. Each successor Canadian Lender and successor to
Bank of America, N.A., acting through its Canada Branch, shall be deemed to have
confirmed and ratified the constitution of the Canadian Agent as the holder of
such irrevocable power of attorney (fonde de pouvoir). Furthermore, the Canadian
Agent agrees to act in the capacity of the holder and depositary of the Bonds
for the benefit of all present and future Canadian Lenders. Notwithstanding the
provisions of Section 32 of the Special Powers of Legal Persons Act (Quebec),
the Canadian Agent may acquire and be the holder of a Bond. The Canadian
Borrower acknowledges that each of the Bonds executed by it constitutes a title
of indebtedness, as such term is used in Article 2692 of the Civil Code of
Quebec. Notwithstanding the provisions of Section 9.13, the provisions of this
paragraph shall be governed by the laws of the Province of Quebec and the
federal laws of Canada applicable therein.
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8.2 DELEGATION OF DUTIES.
Each of the Agents may execute any of its duties under this Credit
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The Agents
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
foregoing, the Agents may appoint one of its affiliates as its agent to perform
the functions of the its functions hereunder relating to the advancing of funds
to the Borrowers and distribution of funds to the Lenders and to perform such
other related functions of the Agents hereunder as are reasonably incidental to
such functions.
8.3 EXCULPATORY PROVISIONS.
Neither Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Credit Agreement (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Credit Party
or any officer thereof contained in this Credit Agreement or in any certificate,
report, statement or other document referred to or provided for in, or received
by such Agent under or in connection with, this Credit Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any of the Credit Documents or for any failure of any Credit Party to perform
its obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance by any Credit Party of any of the agreements contained in, or
conditions of, this Credit Agreement, or to inspect the properties, books or
records of any Credit Party.
8.4 RELIANCE BY AGENTS.
Each of the Agents shall be entitled to rely, and shall be fully protected
in relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Credit Parties), independent accountants and
other experts selected by the Agents. The Agents may deem and treat the payee of
any Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
either of the Agents and (b) such Agent shall have received the written
agreement of such assignee to be bound hereby as fully and to the same extent as
if such assignee were an original Lender party hereto, in each case in form
satisfactory to such Agent. The Agents shall be fully justified in failing or
refusing to take any action under this Credit Agreement unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agents shall in all cases
be fully protected in acting, or in refraining from acting, under any of the
Credit Documents in accordance with a request of the Required Lenders or all of
the Lenders, as may be required under this Credit Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
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8.5 NOTICE OF DEFAULT.
Neither Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless such Agent has
received notice from a Lender or the Company referring to this Credit Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that an Agent receives such a notice, such
Agent shall give prompt notice thereof to the Lenders. The Agents shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, however, that unless and
until an Agent shall have received such directions, such Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders except to the extent that this Credit Agreement
expressly requires that such action be taken, or not taken, only with the
consent or upon the authorization of the Required Lenders, or all of the
Lenders, as the case may be.
8.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Agents nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representation or warranty to it and that no act by an Agent hereinafter
taken, including any review of the affairs of the Credit Parties, shall be
deemed to constitute any representation or warranty by the Agents to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon the Agents or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Credit Parties and made its own decision
to make its Loans hereunder and enter into this Credit Agreement. Each Lender
also represents that it will, independently and without reliance upon the Agents
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Credit
Agreement, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Credit Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by an Agent
hereunder, no Agents shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Credit Parties which may come into the possession of such Agents or any of
their officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7 INDEMNIFICATION.
The Lenders agree to indemnify each Agent in its capacity hereunder (to
the extent not reimbursed by the Credit Parties as provide in Section 9.5 and
without limiting the obligation of the Credit Parties to do so), ratably
according to their respective Commitment Percentages in effect on the date on
which indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of any Credit Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing;
105
provided, however, that (i) no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the such Agent's gross negligence or willful misconduct, as determined by a
court of competent jurisdiction pursuant to a final non-appealable judgment;
(ii) the Lenders shall not be liable to the Agents hereunder for more
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements than the Credit Parties would be liable for
under Section 9.5, and (iii) only the Canadian Lenders shall have any obligation
to make any payment to the Canadian Agent pursuant to this Section 8.7. The
agreements in this Section 8.7 shall survive the termination of this Credit
Agreement and payment of the Notes and all other amounts payable hereunder.
8.8 AGENTS IN THEIR INDIVIDUAL CAPACITY.
Each of the Agents and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Credit Parties as
though such Agent were not an Agent hereunder. With respect to its Loans made or
renewed by it and any Note issued to it, each Agent shall have the same rights
and powers under this Credit Agreement as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
8.9 SUCCESSOR AGENT.
Any Agent may resign as such Agent upon thirty (30) days' prior notice to
the Company and the Lenders. If an Agent shall resign as such Agent under this
Credit Agreement and the other Credit Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Borrowers (so long as not Event of
Default has occurred and is continuing), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" or "Canadian Agent," as applicable, shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as an Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Credit Agreement or any holders of the Notes. After any retiring
Agent's resignation as an Agent, the provisions of this Section 8.9 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Agent under this Credit Agreement.
8.10 PATRIOT ACT NOTICE.
Each Lender and each Agent (for itself and not on behalf of any other
party) hereby notifies the Borrowers that, pursuant to the requirements of the
USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001
(the "Patriot Act"), it is required to obtain, verify and record information
that identifies each Borrower, which information includes the name and address
of each Borrower and other information that will allow such Lender or such
Agent, as applicable, to identify such Borrower in accordance with the Patriot
Act.
8.11 OTHER AGENTS, ARRANGERS AND MANAGERS.
None of the Lenders or other Persons identified on the front page or
signature pages of this Credit Agreement as "Syndication Agent," "Lead Arranger"
or "Book Runner" shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than, in the case
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of the Syndication Agent, those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders or other Persons so identified shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Credit
Agreement or in taking or not taking action hereunder.
8.12 COLLATERAL AND GUARANTY MATTERS.
(a) The Lenders irrevocably authorize and direct the Administrative Agent
and the Canadian Agent:
(i) to release any Lien on any Property granted to or held by the
applicable Agent under any Loan Document (i) upon termination of the
Aggregate Revolving Commitments and payment in full of all Obligations
outstanding under the Credit Documents (other than contingent
indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is transferred or to be transferred as part
of or in connection with any sale or other disposition permitted under
Section 6.4, or (iii) subject to Section 9.1, if approved, authorized or
ratified in writing by the Required Lenders;
(ii) to subordinate any Lien on any Property granted to or held by
the such Agent under any Credit Document to the holder of any Lien on such
Property that is permitted by Section 6.3(d); and
(iii) to release any Guarantor from its obligations under the
applicable Guaranty if such Person ceases to be a Restricted Subsidiary as
a result of a transaction permitted hereunder.
(b) In addition, in the event that (i) the rating of the Company's senior
non credit-enhanced long-term unsecured debt is rated at or above BB+ from
Standard & Poor's and at or above Ba1 from Xxxxx'x (or, if either Standard &
Poor's or Xxxxx'x changes its system of classification after the date of this
Credit Agreement, the rating of the Company's non credit-enhanced senior
long-term unsecured debt is at or above the new rating which most closely
corresponds to the above-specified level under the previous rating system),
and/or (ii) the Leverage Ratio does not exceed 3.00 to 1.00 for two consecutive
fiscal quarters (in each case as demonstrated in the applicable compliance
certificate delivered to the Administrative Agent for such fiscal quarter
pursuant to Section 5.7(c)), then, in either case, the Lenders hereby authorize
and direct each Agent to release any Lien on any Property granted to or held by
the applicable Agent under any Credit Document.
(c) In connection with a termination or release pursuant to this Section
8.12, the applicable Agent shall promptly execute and deliver to the applicable
Credit Party, at the Company's expense, all documents that the applicable Credit
Party shall reasonably request to evidence such termination or release. Upon
request by the Administrative Agent and/or Canadian Agent at any time, the
Required Lenders or the Required Canadian Lenders, as the case may be, will
confirm in writing such Agent's authority to release or subordinate its interest
in particular types or items of Property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 8.12; provided, however,
that the applicable Agent may not decline to release any Lien or guarantee
pursuant to this Section 8.12 due to the absence of any such confirmation.
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ARTICLE IX
MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS.
Neither this Credit Agreement, nor any of the other Credit Documents, nor
any terms hereof or thereof may be amended, supplemented, waived or modified
except in accordance with the provisions of this Section. The Required Lenders
may, or, with the written consent of the Required Lenders, the Administrative
Agent may, from time to time, (a) enter into with the Borrowers written
amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or changing in any manner the rights of the Lenders
or of the Borrowers hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders may specify in such instrument, any of the
requirements of this Credit Agreement or the other Credit Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, waiver, supplement, modification or release
shall:
(i) reduce the amount or extend the scheduled date of maturity of
any Loan or Note or any installment thereon, or reduce the stated rate of
any interest or fee payable hereunder (except in connection with a waiver
of interest at the increased post-default rate) or extend the scheduled
date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the
written consent of each Lender directly affected thereby; or
(ii) amend, modify or waive any provision of this Section 9.1 or
reduce the percentage specified in the definition of Required Lenders,
without the written consent of all the Lenders; or
(iii) amend, modify or waive any provision of Article VIII without
the written consent of the then Agents; or
(iv) release all or substantially all of the Guarantors from their
obligations under the Guaranty (other than as permitted hereunder),
without the written consent of all the Lenders; provided, however, only
the consent of all of the Canadian Lenders shall be required to release
all, substantially all of or any one of the Canadian Guarantors (other
than as permitted hereunder); or
(v) release all or substantially all of the Collateral (other than
as permitted hereunder), without the written consent of all of the Secured
Parties; provided, however, only the consent of all of the Canadian
Lenders shall be required to release all, substantially all of or any part
of the Canadian Collateral (other than as permitted hereunder); or
(vi) amend, modify or waive any provision of the Credit Documents
requiring consent, approval or request of the Required Lenders or all
Lenders, without the written consent of the Required Lenders or of all
Lenders as appropriate; or
(vii) amend or modify the definition of Credit Party Obligations to
delete or exclude any obligation or liability described therein without
the written consent of each Lender and each Hedging Agreement Provider
directly affected thereby; or
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(viii) amend, modify or waive the definition of "Secured Hedging
Agreement", "Hedging Agreement Provider" or "Secured Party" without the
consent of each Hedging Agreement Provider;
(ix) amend, modify or waive the order in which Credit Party
Obligations are paid in Section 2.12(b) without the written consent of
each Lender and each Hedging Agreement Provider directly affected thereby;
(x) amend, modify or waive any provision of Section 2.2 without the
consent of the Required Canadian Lenders, and amend, modify or waive any
provision of Section 2.4A without the consent of the Canadian Swingline
Lender;
(xi) amend, modify or waive any provision of Section 2.4 without the
consent of the U.S. Swingline Lender, or amend, modify or waive any
provision of Section 2.5 without the consent of the Issuing Lender.
provided, further, that no amendment, waiver or consent affecting the rights or
duties of the an Agent under any Credit Document shall in any event be
effective, unless in writing and signed by the applicable Agent in addition to
the Lenders required hereinabove to take such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrowers, the Lenders, the other Credit Parties, the Agents and all
future holders of the Notes. In the case of any waiver, the Borrowers, the other
Credit Parties, the Lenders and the Agents shall be restored to their former
position and rights hereunder and under the outstanding Loans and Notes and
other Credit Documents, and any Default or Event of Default permanently waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrowers shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); provided,
however, that the Administrative Agent will provide written notice to the
Borrowers of any such amendment, modification or waiver. In addition, the
Borrowers, the Canadian Agent and the Lenders hereby authorize the
Administrative Agent to modify this Credit Agreement by unilaterally amending or
supplementing Schedule 2.1(a) from time to time in the manner requested by the
Borrowers, the Agents or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided further, however,
that the Administrative Agent shall promptly deliver a copy of any such
modification to the Borrowers, the Canadian Agent and each Lender.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (A) each Lender is entitled to vote
as such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (B) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
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The Borrowers shall be permitted to replace with a replacement financial
institution acceptable to the Administrative Agent any Lender that fails to
consent to any proposed amendment, modification, termination, waiver or consent
with respect to any provision hereof or of any other Credit Document that
requires the unanimous approval of all of the Lenders, the approval of all of
the Lenders affected thereby or the approval of a class of Lenders, in each case
in accordance with the terms of this Section 9.1, so long as the consent of the
Required Lenders shall have been obtained with respect to such amendment,
modification, termination, waiver or consent; provided that (1) such replacement
does not conflict with any Requirement of Law, (2) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (3) the replacement
financial institution shall approve the proposed amendment, modification,
termination, waiver or consent, (4) the Borrowers shall be liable to such
replaced Lender under Section 2.17 if any LIBOR Rate Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (5) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 9.6 (provided that the
Borrowers shall be obligated to pay the registration and processing fee referred
to therein), (6) until such time as such replacement shall be consummated, the
Borrowers shall pay to the replaced Lender all additional amounts (if any)
required pursuant to Section 2.15, 2.16 or 2.18(a), as the case may be, (7) the
Borrowers provide at least three (3) Business Days' prior notice to such
replaced Lender, and (8) any such replacement shall not be deemed to be a waiver
of any rights that the Borrowers, the Administrative Agent or any other Lender
shall have against the replaced Lender. In the event any replaced Lender fails
to execute the agreements required under Section 9.6 in connection with an
assignment pursuant to this Section 9.1, the Borrowers may, upon two (2)
Business Days' prior notice to such replaced Lender, execute such agreements on
behalf of such replaced Lender. A Lender shall not be required to be replaced
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such replacement cease to
apply.
9.2 NOTICES.
(a) All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy or other
electronic communications as provided below), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) when
delivered by hand, (b) when transmitted via telecopy (or other facsimile device)
to the number set out herein, (c) the day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case addressed as follows in the case of the Borrowers,
the other Credit Parties and the Agents, and as set forth on Schedule 9.2 in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:
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if to any of the Credit Parties
c/o Rock-Tenn Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxx, XX 00000-0000
Attn: Chief Financial Officer
Telephone: 000-000-0000
Telecopy: 000-000-0000
With a copy to:
Rock-Tenn Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
Telephone: 000-000-0000
Telecopy: 000-000-0000
if to the Administrative Agent:
Wachovia Bank, National Association
Charlotte Plaza
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Wachovia Bank, National Association
Xxx Xxxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxx, Agency Management Group
Telecopier: 000-000-0000
Telephone: 000-000-0000
if to the Canadian Agent:
Xxxxxx Sales xx Xxxxxxx
Assistant Vice President
Portfolio Management
Bank of America, N.A., Canada Branch,
000 Xxxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx.
X0X 0X0
Telephone: 000-000-0000
Telecopier: 000-000-0000
E-Mail: xxxxxx.xxxxx_xx_xxxxxxx@xxxxxxxxxxxxx.xxx
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With a copy to:
Xxxxxxx Xxxxxx, Xx.
Vice President
Forest Products, Paper & Packaging
Bank of America, N.A.
000 Xxxxxxxxxx Xxxxxx, 0xx Xx.
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
E-Mail: xxxxxxx.l.letson_jr@bankofamerica
(b) Notices and other communications to the Lenders or the Agents
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender pursuant to Section 2 if such Lender, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. The Agents or the Borrowers may, in their
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Agents or any Lender, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans; provided that all such
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representations and warranties shall terminate on the date upon which the
Commitments have been terminated and all Credit Party Obligations have been paid
in full.
9.5 PAYMENT OF EXPENSES AND TAXES.
The Applicable Borrower agrees (a) to pay or reimburse the Agents and the
Lead Arranger for all their reasonable out-of-pocket costs and expenses incurred
in connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Credit
Agreement and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, together with the reasonable fees
and disbursements of counsel to the Agents and the Lead Arranger, (b) to pay or
reimburse each Lender and the Agents for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this Credit
Agreement and the other Credit Documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Agents and to the Lenders,
(c) on demand, to pay, indemnify, and hold each Lender and the Agents harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents, (d) to pay or reimburse each Lender and
the Agents for any costs, fees or expenses incurred in connection with any
investigation (including, without limitation, background checks) performed to
determine whether the Company or any of its Subsidiaries or any officer,
director, shareholder or affiliate of the Company or any of its Subsidiaries has
violated any Anti-Terrorism Laws or other similar law and (e) to pay, indemnify,
and hold each Lender, each Agent and each Related Party of the foregoing Persons
(each such Person being called an "Indemnitee") harmless from and against, any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs (including, without limitation, settlement costs),
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of the Credit
Documents and any such other documents and the use, or proposed use, of proceeds
of the Loans and the Letters of Credit (all of the foregoing, collectively, the
"Indemnified Liabilities"); provided, however, that the Borrowers shall not have
any obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such
Indemnitee, as determined by a court of competent jurisdiction pursuant to a
final non-appealable judgment. The agreements in this Section 9.5 shall survive
repayment of the Loans, Notes and all other Credit Party Obligations. For the
purposes of clarification, the Canadian Borrower shall only be required to pay
amounts under this Section 9.5 in respect of the Canadian Obligations.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Credit Agreement shall be binding upon and inure to the benefit
of the Borrowers, the Lenders, the Agents, all future holders of the Notes and
their respective successors and assigns, except that the Borrowers may not
assign or transfer any of its rights or obligations under this Credit Agreement
or the other Credit Documents without the prior written consent of each Lender.
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(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, any Commitment of such
Lender, or any other interest of such Lender hereunder; provided, however, that
a Canadian Lender may only sell such participating interests to another Canadian
Lender. In the event of any such sale by a Lender of participating interests to
a Participant, such Lender's obligations under this Credit Agreement to the
other parties to this Credit Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Credit Agreement, and
the Borrowers and the Agents shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Credit Agreement. No Lender shall transfer or grant any participation under
which the Participant shall have rights to approve any amendment to or waiver of
this Credit Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the scheduled maturity of any Loan or Note
or any installment thereon in which such Participant is participating, or reduce
the stated rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of the
Participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default shall not constitute
a change in the terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without consent of any Participant if the
Participant's participation is not increased as a result thereof), (ii) release
any of the Guarantors from its obligations under the Guaranty or (iii) consent
to the assignment or transfer by the Borrowers of any of its rights and
obligations under this Credit Agreement. In the case of any such participation,
the Participant shall not have any rights under this Credit Agreement or any of
the other Credit Documents (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreement executed by
such Lender in favor of the Participant relating thereto) and all amounts
payable by the Borrowers hereunder shall be determined as if such Lender had not
sold such participation; provided that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16, 2.17, and 2.18 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided further, that no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its lending business and in
accordance with applicable law, at any time, sell or assign to any Lender, or
any Affiliate or Related Fund thereof, and, with the consent of (x) the
Administrative Agent, (y) in the case of an assignment of a U.S. Revolving
Commitment, the Issuing Lender, and (z) so long as no Default or Event of
Default has occurred and is continuing, the Applicable Borrower (in each case,
which consent shall not be unreasonably withheld or delayed), to one or more
additional banks or financial institutions or entities ("Purchasing Lenders"),
all or any part of its rights and obligations under this Credit Agreement and
the Notes in minimum amounts of (i) U.S.$2,500,000 with respect to its Revolving
Commitment and its Revolving Loans (or, if less, the entire amount of such
Lender's Revolving Commitment and Revolving Loans) and (ii) U.S.$1,000,000 with
respect to its Term Loans (or, if less, the entire amount of such Lender's Term
Loans), pursuant to a Commitment Transfer Supplement, executed by such
Purchasing Lender and such transferor Lender (and, to the extent required above,
the Administrative Agent and the Borrowers), and delivered to the Administrative
Agent for its acceptance and recording in the Register; provided, however, that
any sale or assignment to an existing Lender, or Affiliate or Related Fund
thereof, shall not require the consent of the
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Administrative Agent or the Borrowers nor shall any such sale or assignment be
subject to the minimum assignment amounts specified herein; and, provided
further, that if the assigning Lender is a Canadian Lender, the applicable
Purchasing Lender must also be a Canadian Lender; and, provided further, that no
Purchasing Lender shall be entitled to receive any greater amount pursuant to
Sections 2.15, 2.16, 2.17, and 2.18 than the transferor Lender would have been
entitled to receive in respect of the amount of the Commitment and/or Loans
transferred by such transferor Lender to such Purchasing Lender had no such
transfer occurred. Upon such execution, delivery, acceptance and recording, from
and after the Transfer Effective Date specified in such Commitment Transfer
Supplement, (x) the Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Credit Agreement, except with respect to any accrued obligations not then
satisfied (and, in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Lender's rights and obligations under this
Credit Agreement, such transferor Lender shall cease to be a party hereto). Such
Commitment Transfer Supplement shall be deemed to amend this Credit Agreement to
the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Percentages arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Credit Agreement and the
Notes. On or prior to the Transfer Effective Date specified in such Commitment
Transfer Supplement, the Borrowers shall execute and deliver to the
Administrative Agent in exchange for the Notes delivered to the Administrative
Agent pursuant to such Commitment Transfer Supplement new Notes to the order of
such Purchasing Lender, to the extent requested by such Purchasing Lender, in an
amount equal to the Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender in an
amount equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes replaced
thereby. The Notes surrendered by the transferor Lender shall be returned by the
Administrative Agent to the Borrowers marked "canceled".
(d) The Administrative Agent shall maintain at its address referred to in
Section 9.2 a copy of each Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as the
owner of the Loan recorded therein for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrowers or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer Supplement,
together with payment to the Administrative Agent by the transferor Lender or
the Purchasing Lender, as agreed between them, of a registration and processing
fee of U.S.$3,500 for each Purchasing Lender listed in such Commitment Transfer
Supplement and the Notes subject to such Commitment Transfer Supplement, the
Administrative Agent shall (i) accept such Commitment Transfer Supplement, (ii)
record the information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the Borrowers.
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(f) The Borrowers authorize each Lender to disclose to any Participant or
Purchasing Lender (each, a "Transferee") and any prospective Transferee any and
all financial information in such Lender's possession concerning the Borrowers
and their Affiliates which has been delivered to such Lender by or on behalf of
the Borrowers pursuant to this Credit Agreement or which has been delivered to
such Lender by or on behalf of the Borrowers in connection with such Lender's
credit evaluation of the Company and its Subsidiaries prior to becoming a party
to this Credit Agreement, in each case subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section 9.6 to a
Person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for federal
income tax purposes, the respective assignee Lender shall provide to the
Borrowers and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a Tax Exempt Certificate) described in Section 2.18.
(h) Nothing herein shall prohibit any Lender from pledging or assigning
any of its rights under this Credit Agreement (including, without limitation,
any right to payment of principal and interest under any Note) to any Federal
Reserve Bank or Farm Credit Bank in accordance with applicable laws.
9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "Benefited Lender") shall at
any time receive any payment of all or part of its Loans, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(e), or otherwise) in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrowers agree that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by law
(including, without limitation, other rights of set-off), each Lender shall have
the right, without prior notice to any Credit Party, any such notice being
expressly waived by the Credit Parties to the extent permitted by applicable
law, upon the occurrence of any Event of Default, to setoff and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of any Credit Party, or any
part thereof in such amounts as such Lender may elect, against and on account of
the obligations and liabilities of the Borrowers and the other Credit Parties to
such Lender hereunder and claims of every nature and description of such Lender
against the Borrowers, in any currency, whether arising hereunder, under any
other Credit Document or any Hedging Agreement with a Hedging Agreement Provider
provided
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by such Lender pursuant to the terms of this Credit Agreement, as such Lender
may elect, whether or not such Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The aforesaid right of set-off may be exercised by such Lender
against the Credit Party or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or execution,
judgment or attachment creditor of any such Credit Party, or against anyone else
claiming through or against any such Credit Party or any such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Lender
prior to the occurrence of any Event of Default. Each Lender agrees promptly to
notify the applicable Credit Party and the Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.
9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Credit
Agreement.
9.9 COUNTERPARTS.
This Credit Agreement may be executed by one or more of the parties to
this Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
agreement.
9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all of
the parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Agents (or counsel to the Agents) or, in
the case of the Lenders, shall have given to the Administrative Agent written,
telecopied or telex notice (actually received) at such office that the same has
been signed and mailed to it.
9.11 SEVERABILITY.
Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.12 INTEGRATION.
This Credit Agreement and the other Credit Documents represent the
agreement of the Borrowers, the Agents and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Agents, the Borrowers or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the other
Credit Documents.
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9.13 GOVERNING LAW.
THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS (EXCEPT AS OTHERWISE
PROVIDED THEREIN) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrowers and/or any other
Credit Party with respect to this Credit Agreement, any Note or any of the other
Credit Documents may be brought in the courts of the State of New York in New
York County or of the United States for the Southern District of New York, and,
by execution and delivery of this Credit Agreement, each of the Borrowers and
the other Credit Parties accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Credit Agreement, any Note or any other
Credit Document from which no appeal has been taken or is available. Each of the
Borrowers and the other Credit Parties irrevocably agrees that all service of
process in any such proceedings in any such court may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in Section 9.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by each of the
Borrowers and the other Credit Parties to be effective and binding service in
every respect. Each of the Borrowers, the Administrative Agent and the Lenders
irrevocably waives any objection, including, without limitation, any objection
to the laying of venue based on the grounds of forum non conveniens which it may
now or hereafter have to the bringing of any such action or proceeding in any
such jurisdiction. Nothing herein shall affect any right that any party hereto
may have to serve process in any other manner permitted by law or shall limit
the right of any Lender to bring proceedings against the Borrowers or the other
Credit Parties in the court of any other jurisdiction.
9.15 CONFIDENTIALITY.
The Administrative Agent, the Canadian Agent and each of the Lenders
agrees that it will use its best efforts not to disclose without the prior
consent of the Borrowers (other than to its employees, affiliates, auditors or
counsel or to another Lender) any information with respect to the Borrowers and
its Subsidiaries which is furnished pursuant to this Credit Agreement, any other
Credit Document or any documents contemplated by or referred to herein or
therein and which is designated by the Borrowers to the Lenders in writing as
confidential or as to which it is otherwise reasonably clear such information is
not public, except that any Lender may disclose any such information (a) as has
become generally available to the public other than by a breach of this Section
9.15, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or the OCC or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6; provided that such prospective transferee shall agreed
to be bound by the confidentiality provisions set forth in this Section 9.15,
(e) to any actual or
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prospective counterparty (or its advisors) to any Hedging Agreement relating to
a Credit Party and its obligations; provided that such prospective counterparty
shall have agreed to be bound by the confidentiality provisions set forth in
this Section, (f) to Gold Sheets and other similar bank trade publications, such
information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such
publications or (g) in connection with any suit, action or proceeding for the
purpose of defending itself, reducing its liability, or protecting or exercising
any of its claims, rights, remedies or interests under or in connection with the
Credit Documents or any Hedging Agreement entered into with a Hedging Agreement
Provider.
9.16 ACKNOWLEDGMENTS.
Each of the Borrowers and the other Credit Parties each hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
(b) neither the Administrative Agent, the Canadian Agent nor any Lender
has any fiduciary relationship with or duty to the Borrowers or any other Credit
Party arising out of or in connection with this Credit Agreement and the
relationship between Administrative Agent, the Canadian Agent and the Lenders,
on one hand, and the Borrowers and the other Credit Parties, on the other hand,
in connection herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Borrowers and
the Lenders.
9.17 WAIVERS OF JURY TRIAL.
THE BORROWERS, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT, THE
CANADIAN AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
9.18 JUDGMENT CURRENCY.
If, for the purposes of obtaining judgment in any court, it is necessary
to convert a sum due hereunder or under any other Credit Document in one
currency into another currency, the rate of exchange used shall be that at which
in accordance with normal banking procedures the Administrative Agent or the
Canadian Agent, as applicable, could purchase the first currency with such other
currency on the Business Day preceding that on which final judgment is given.
The obligation of the Borrowers in respect of any such sum due from it to the
Administrative Agent, the Canadian Agent or any Lender hereunder or under the
other Credit Documents shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than that in which such sum is denominated in
accordance with the applicable provisions of this Credit Agreement (the
"Agreement Currency"), be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent, the Canadian Agent or such Lender
of any sum adjudged to be so due in the Judgment Currency, the Administrative
Agent, the Canadian Agent or such Lender may in accordance with normal banking
procedures purchase the Agreement Currency with the Judgment
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Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent, the Canadian Agent or such
Lender in the Agreement Currency, the Borrowers agree, as a separate obligation
and notwithstanding any such judgment, to indemnify the Administrative Agent,
the Canadian Agent or such Lender or the Person to whom such obligation was
owing against such loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Administrative Agent, the Canadian
Agent or such Lender in such currency, the Administrative Agent, the Canadian
Agent or such Lender agrees to return the amount of any excess to the Borrowers
(or to any other Person who may be entitled thereto under applicable law).
9.19 SUBORDINATION OF INTERCOMPANY DEBT.
Each Loan Party agrees that all intercompany Indebtedness among Credit
Parties (the "Intercompany Debt") is subordinated in right of payment, to the
prior payment in full of all Obligations. Notwithstanding any provision of this
Agreement to the contrary, provided that no Event of Default has occurred and is
continuing, Credit Parties may make and receive payments with respect to the
Intercompany Debt to the extent otherwise permitted by this Agreement; provided,
that in the event of and during the continuation of any Event of Default, no
payment shall be made by or on behalf of any Credit Party on account of any
Intercompany Debt. In the event that any Credit Party receives any payment of
any Intercompany Debt at a time when such payment is prohibited by this Section
9.19 hereof, such payment shall be held by such Credit Party, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the Administrative Agent.
ARTICLE X
GUARANTY OF COMPANY OBLIGATIONS
10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Credit Agreement and any
Hedging Agreement Provider to enter into any Secured Hedging Agreement and to
extend credit hereunder and thereunder and in recognition of the direct benefits
to be received by the U.S. Guarantors from the Extensions of Credit hereunder
and any Secured Hedging Agreement, each of the U.S. Guarantors hereby agrees
with the Agents and the Lenders as follows: such U.S. Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of the
Company to the Administrative Agent, the Canadian Agent and the Lenders. If any
or all of the indebtedness becomes due and payable hereunder or under any
Secured Hedging Agreement, each U.S. Guarantor unconditionally promises to pay
such indebtedness to the Administrative Agent, the Lenders, the Secured Hedging
Agreement Providers, or their respective order, on demand, together with any and
all reasonable expenses which may be incurred by the Administrative Agent or the
Lenders in collecting any of the Credit Party Obligations of the Company. The
word "indebtedness" is used in this Article X in its most comprehensive sense
and includes any and all advances, debts, obligations and liabilities of the
Company, including specifically all Credit Party Obligations of the Company,
arising in connection with this Credit Agreement, the other Credit Documents or
any Secured Hedging Agreement, in each case, heretofore, now, or hereafter made,
incurred or created, whether voluntarily or involuntarily, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such indebtedness is from time to time reduced, or extinguished and
thereafter increased or incurred, whether the
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Company may be liable individually or jointly with others, whether or not
recovery upon such indebtedness may be or hereafter become barred by any statute
of limitations, and whether or not such indebtedness may be or hereafter become
otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a U.S. Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state, federal or provincial law
relating to fraudulent conveyances or transfers) then the obligations of each
such U.S. Guarantor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal, state or provincial and
including, without limitation, the Bankruptcy Code).
10.2 BANKRUPTCY.
Additionally, each of the U.S. Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all Credit Party
Obligations of the Company to the Lenders and any Hedging Agreement Provider
whether or not due or payable by the Company upon the occurrence of any of the
events specified in Section 7.1(g), and unconditionally promises to pay such
Credit Party Obligations to the Administrative Agent for the account of the
Lenders and to any such Hedging Agreement Provider, or order, on demand, in
lawful money of the United States. Each of the U.S. Guarantors further agrees
that to the extent that the Company or a U.S. Guarantor shall make a payment or
a transfer of an interest in any property to the Administrative Agent, any
Lender or any Hedging Agreement Provider, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Company or a U.S.
Guarantor, the estate of the Company or a U.S. Guarantor, a trustee, receiver or
any other party under any bankruptcy law, state, provincial or federal law,
common law or equitable cause, then to the extent of such avoidance or
repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.
10.3 NATURE OF LIABILITY.
The liability of each U.S. Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Credit Party
Obligations of the Company whether executed by any such U.S. Guarantor, any
other guarantor or by any other party, and no U.S. Guarantor's liability
hereunder shall be affected or impaired by (a) any direction as to application
of payment by the Company or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Credit Party Obligations of the Company, or (c) any payment on
or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Company, or (e) any payment made to the Administrative Agent, the Lenders or any
Hedging Agreement Provider on the Credit Party Obligations of the Company which
the Administrative Agent, such Lenders or such Hedging Agreement Provider repay
the Company pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each of the U.S.
Guarantors waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
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10.4 INDEPENDENT OBLIGATION.
The obligations of each U.S. Guarantor hereunder are independent of the
obligations of any other U.S. Guarantor or the Company, and a separate action or
actions may be brought and prosecuted against each U.S. Guarantor whether or not
action is brought against any other U.S. Guarantor or the Company and whether or
not any other U.S. Guarantor or the Company is joined in any such action or
actions.
10.5 AUTHORIZATION.
Each of the U.S. Guarantors authorizes the Administrative Agent, each
Lender and each Hedging Agreement Provider without notice or demand (except as
shall be required by applicable statute and cannot be waived), and without
affecting or impairing its liability hereunder, from time to time to (a) renew,
compromise, extend, increase, accelerate or otherwise change the time for
payment of, or otherwise change the terms of the Credit Party Obligations or any
part thereof in accordance with this Agreement and any Secured Hedging
Agreement, as applicable, including any increase or decrease of the rate of
interest thereon, (b) take and hold security from any U.S. Guarantor or any
other party for the payment of this Guaranty or the Credit Party Obligations and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, U.S. Guarantors, the Company or other obligors.
10.6 RELIANCE.
It is not necessary for the Administrative Agent, the Lenders or any
Hedging Agreement Provider to inquire into the capacity or powers of the Company
or the officers, directors, members, partners or agents acting or purporting to
act on its behalf, and any Credit Party Obligations made or created in reliance
upon the professed exercise of such powers shall be guaranteed hereunder.
10.7 WAIVER.
(a) Each of the U.S. Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent, any Lender or any Hedging Agreement Provider to (i)
proceed against the Company, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from the Company, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent's, any Lender's or any Hedging Agreement Provider's power
whatsoever. Each of the U.S. Guarantors waives any defense based on or arising
out of any defense of the Company, any other guarantor or any other party other
than payment in full of the Credit Party Obligations of the Company (other than
contingent indemnity obligations), including without limitation any defense
based on or arising out of (i) the disability of the Company, any other
Guarantor or any other party, (ii) the unenforceability of the Credit Party
Obligations or any part thereof from any cause, (iii) the cessation from any
cause of the liability of the Company other than payment in full of the Credit
Party Obligations of the Company, (iv) any amendment, waiver or modification of
the Credit Party Obligations, (v) any substitution, release, exchange or
impairment of any security for any of the Credit Party Obligations, (vi) any
change in the corporate existence or structure of a Borrower or any other
Guarantor, (vii) any claims or rights of set off that such Guarantor may have,
and/or (viii) any Requirement of Law or order of any Governmental Authority
affecting any term of the Credit Party Obligations. The Administrative Agent
may, at its election, foreclose on any security held by the Administrative Agent
by one or more
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judicial or nonjudicial sales (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative Agent
or any Lender may have against the Company or any other party, or any security,
without affecting or impairing in any way the liability of any U.S. Guarantor
hereunder except to the extent the Credit Party Obligations of the Company have
been paid in full and the Commitments have been terminated. Each of the U.S.
Guarantors waives any defense arising out of any such election by the
Administrative Agent or any of the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of the U.S. Guarantors against the Company or any other party or any
security.
(b) Each of the U.S. Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of acceptance of
this Guaranty, and notices of the existence, creation or incurring of new or
additional Credit Party Obligations. Each U.S. Guarantor assumes all
responsibility for being and keeping itself informed of the Company's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Credit Party Obligations and the nature, scope and extent of
the risks which such U.S. Guarantor assumes and incurs hereunder, and agrees
that neither the Administrative Agent nor any Lender shall have any duty to
advise such U.S. Guarantor of information known to it regarding such
circumstances or risks.
(c) Each of the U.S. Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or
otherwise) to the claims of the Lenders or any Hedging Agreement Provider
against the Company or any other guarantor of the Credit Party Obligations of
the Company owing to the Lenders or such Hedging Agreement Provider
(collectively, the "Other Parties") and all contractual, statutory or common law
rights of reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such time as
the Credit Party Obligations of the Company shall have been paid in full and the
Commitments have been terminated. Each of the U.S. Guarantors hereby further
agrees not to exercise any right to enforce any other remedy which the
Administrative Agent, the Lenders or any Hedging Agreement Provider now have or
may hereafter have against any Other Party, any endorser or any other guarantor
of all or any part of the Credit Party Obligations of the Company and any
benefit of, and any right to participate in, any security or collateral given to
or for the benefit of the Lenders and/or the Hedging Agreement Providers to
secure payment of the Credit Party Obligations of the Company until such time as
the Credit Party Obligations of the Company (other than contingent indemnity
obligations) shall have been paid in full and the Commitments have been
terminated.
10.8 LIMITATION ON ENFORCEMENT.
The Lenders and the Hedging Agreement Providers agree that this Guaranty
may be enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or such Hedging Agreement Provider (only
with respect to obligations under the applicable Secured Hedging Agreement) and
that no Lender or Hedging Agreement Provider shall have any right individually
to seek to enforce or to enforce this Guaranty, it being understood and agreed
that such rights and remedies may be exercised by the Administrative Agent for
the benefit of the Lenders under the terms of this Credit Agreement and for the
benefit of any Hedging Agreement Provider under any Secured Hedging Agreement.
The Lenders and the Hedging Agreement Providers further agree that this Guaranty
may not be enforced against any director, officer, employee or stockholder of
the U.S. Guarantors. Notwithstanding the inclusion of Secured Hedging Agreements
in the definition
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of "Credit Party Obligations" or any other provision contained in this Credit
Agreement or any of the other Credit Documents, so long as any Credit Party
Obligations are outstanding under the Credit Documents, the Hedging Agreement
Providers shall not, in such capacity, have any right to approve or consent to
any amendments, modifications, releases or terminations of any kind whatsoever
relating to this Guaranty, or to any determinations relating to exercise of
rights or remedies in respect of this Guaranty; provided, that the foregoing
shall not be deemed to modify the rights of such Hedging Agreement Providers
arising out of Secured Hedging Agreements to share pari passu with the proceeds
of this Guaranty and the Collateral.
10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after payment
of the indebtedness and obligations which are the subject of this Guaranty and
termination of the Commitments relating thereto, confirm to the Company, the
U.S. Guarantors or any other Person that such indebtedness and obligations have
been paid and the Commitments relating thereto terminated, subject to the
provisions of Section 10.2.
ARTICLE XI
GUARANTY OF CANADIAN OBLIGATIONS
11.1 THE GUARANTY.
In order to induce the Lenders to enter into this Credit Agreement and any
Hedging Agreement Provider to enter into any Secured Hedging Agreement and to
extend credit hereunder and thereunder and in recognition of the direct benefits
to be received by the Guarantors from the Extensions of Credit hereunder and any
Secured Hedging Agreement, each of the Guarantors hereby agrees with the Agents
and the Lenders as follows: such Guarantor hereby unconditionally and
irrevocably jointly and severally guarantees as primary obligor and not merely
as surety the full and prompt payment when due, whether upon maturity, by
acceleration or otherwise, of any and all indebtedness of the Canadian Borrower
to the Canadian Agent, the Administrative Agent and the Lenders. If any or all
of the indebtedness becomes due and payable hereunder or under any Secured
Hedging Agreement, each Guarantor unconditionally promises to pay such
indebtedness to the Administrative Agent, the Lenders, the Hedging Agreement
Providers, or their respective order, on demand, together with any and all
reasonable expenses which may be incurred by the Administrative Agent or the
Lenders in collecting any of the Canadian Obligations. The word "indebtedness"
is used in this Article XI in its most comprehensive sense and includes any and
all advances, debts, obligations and liabilities of the Canadian Borrower,
including specifically all Canadian Obligations, arising in connection with this
Credit Agreement, the other Credit Documents or any Secured Hedging Agreement,
in each case, heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Canadian Borrower may be liable individually or jointly with others,
whether or not recovery upon such indebtedness may be or hereafter become barred
by any statute of limitations, and whether or not such indebtedness may be or
hereafter become otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
would either breach any applicable law,
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including without limitation the Companies Act (Quebec) or shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of the provisions of the Companies Act (Quebec) or any other applicable
state, provincial or federal law relating to fraudulent conveyances or
transfers) then the obligations of each such Guarantor hereunder shall be
limited to the maximum amount that is permissible under or would not otherwise
breach applicable law (whether federal, state or provincial and including,
without limitation, the Bankruptcy Code and the Companies Act (Quebec)).
11.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all Canadian Obligations
of the Canadian Borrower to the Lenders and any Hedging Agreement Provider
whether or not due or payable by the Canadian Borrower upon the occurrence of
any of the events specified in Section 7.1(g), and unconditionally promises to
pay such Canadian Obligations to the Canadian Agent for the account of the
Lenders and to any such Hedging Agreement Provider, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to
the extent that the Canadian Borrower or a Guarantor shall make a payment or a
transfer of an interest in any property to the Canadian Agent, any Lender or any
Hedging Agreement Provider, which payment or transfer or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, or
otherwise is avoided, and/or required to be repaid to the Canadian Borrower or a
Guarantor, the estate of the Canadian Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state, provincial or
federal law, common law or equitable cause, then to the extent of such avoidance
or repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.
11.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the Canadian Obligations of the Canadian
Borrower whether executed by any such Guarantor, any other guarantor or by any
other party, and no Guarantor's liability hereunder shall be affected or
impaired by (a) any direction as to application of payment by the Canadian
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Canadian Obligations of the Canadian Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Canadian
Borrower, or (e) any payment made to the Canadian Agent, the Administrative
Agent, the Lenders or any Hedging Agreement Provider on the Canadian Obligations
which the Canadian Agent, the Administrative Agent, such Lenders or such Hedging
Agreement Provider repay the Canadian Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each of the Guarantors waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
11.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or the Canadian Borrower, and a separate
action or actions may be brought and prosecuted against each Guarantor whether
or not action is brought against any other Guarantor or the Canadian
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Borrower and whether or not any other Guarantor or the Canadian Borrower is
joined in any such action or actions.
11.5 AUTHORIZATION.
Each of the Guarantors authorizes the Agents, each Lender and each Hedging
Agreement Provider without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the Canadian Obligations or any part thereof in accordance
with this Agreement and any Secured Hedging Agreement, as applicable, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any Guarantor or any other party for the payment of this Guaranty
or the Canadian Obligations and exchange, enforce, waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, Guarantors, the
Canadian Borrower or other obligors.
11.6 RELIANCE.
It is not necessary for the Agents, the Lenders or any Hedging Agreement
Provider to inquire into the capacity or powers of the Canadian Borrower or the
officers, directors, members, partners or agents acting or purporting to act on
its behalf, and any Canadian Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
11.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Agents, any Lender or
any Hedging Agreement Provider to (i) proceed against the Canadian Borrower, any
other guarantor or any other party, (ii) proceed against or exhaust any security
held from the Canadian Borrower, any other guarantor or any other party, or
(iii) pursue any other remedy in the Agents', any Lender's or any Hedging
Agreement Provider's power whatsoever. Each of the Guarantors waives any defense
based on or arising out of any defense of the Canadian Borrower, any other
guarantor or any other party other than payment in full of the Canadian
Obligations (other than contingent indemnity obligations), including without
limitation any defense based on or arising out of (i) the disability of the
Canadian Borrower, any other guarantor or any other party, (ii) the
unenforceability of the Canadian Obligations or any part thereof from any cause,
(iii) the cessation from any cause of the liability of the Canadian Borrower
other than payment in full of the Canadian Obligations, (iv) any amendment,
waiver or modification of the Canadian Obligations, (v) any substitution,
release, exchange or impairment of any security for any of the Canadian
Obligations, (vi) any change in the corporate existence or structure of the
Canadian Borrower or any other Guarantor, (vii) any claims or rights of set off
that such Guarantor may have, and/or (viii) any Requirement of Law or order of
any Governmental Authority affecting any term of the Canadian Obligations. The
Agents may, at their election, foreclose on any security held by the Agents by
one or more judicial or nonjudicial sales (to the extent such sale is permitted
by applicable law), or exercise any other right or remedy the Agents or any
Lender may have against the Canadian Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Canadian Obligations have been paid
in full and the Commitments have been terminated. Each of the Guarantors waives
any defense arising out of any such election by the Agents or any of the
Lenders, even though such election operates to
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impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantors against the Canadian Borrower or any other party or any
security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of acceptance of
this Guaranty, and notices of the existence, creation or incurring of new or
additional Canadian Obligations. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Canadian Borrower's financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment
of the Canadian Obligations and the nature, scope and extent of the risks which
such Guarantor assumes and incurs hereunder, and agrees that neither the Agents
nor any Lender shall have any duty to advise such Guarantor of information known
to it regarding such circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise any rights
of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or
otherwise) to the claims of the Lenders or any Hedging Agreement Provider
against the Canadian Borrower or any other guarantor of the Canadian Obligations
of the Canadian Borrower owing to the Lenders or such Hedging Agreement Provider
(collectively, the "Other Parties") and all contractual, statutory or common law
rights of reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such time as
the Canadian Obligations shall have been paid in full and the Commitments have
been terminated. Each of the Guarantors hereby further agrees not to exercise
any right to enforce any other remedy which the Agents, the Lenders or any
Hedging Agreement Provider now have or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the Canadian
Obligations of the Canadian Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit of the
Lenders and/or the Hedging Agreement Providers to secure payment of the Canadian
Obligations of the Canadian Borrower until such time as the Canadian Obligations
(other than contingent indemnity obligations) shall have been paid in full and
the Commitments have been terminated.
11.8 LIMITATION ON ENFORCEMENT.
The Lenders and the Hedging Agreement Providers agree that this Guaranty
may be enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or such Hedging Agreement Provider (only
with respect to obligations under the applicable Secured Hedging Agreement) and
that no Lender or Hedging Agreement Provider shall have any right individually
to seek to enforce or to enforce this Guaranty, it being understood and agreed
that such rights and remedies may be exercised by the Administrative Agent for
the benefit of the Lenders under the terms of this Credit Agreement and for the
benefit of any Hedging Agreement Provider under any Secured Hedging Agreement.
The Lenders and the Hedging Agreement Providers further agree that this Guaranty
may not be enforced against any director, officer, employee or stockholder of
the Guarantors. Notwithstanding the inclusion of Secured Hedging Agreements in
the definition of "Credit Party Obligations" or any other provision contained in
this Credit Agreement or any of the other Credit Documents, so long as any
Credit Party Obligations are outstanding under the Credit Documents, the Hedging
Agreement Providers shall not, in such capacity, have any right to approve or
consent to any amendments, modifications, releases or terminations of any kind
whatsoever relating to this Guaranty, or to any determinations relating to
exercise of rights or remedies in respect of this Guaranty; provided, that the
foregoing shall not be deemed to modify the rights of such
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Hedging Agreement Providers arising out of Hedging Agreements to share pari
passu with the proceeds of this Guaranty and the Collateral.
11.9 CONFIRMATION OF PAYMENT.
The Agents and the Lenders will, upon request after payment of the
indebtedness and obligations which are the subject of this Guaranty and
termination of the Commitments relating thereto, confirm to the Canadian
Borrower, the Guarantors or any other Person that such indebtedness and
obligations have been paid and the Commitments relating thereto terminated,
subject to the provisions of Section 11.2.
ARTICLE XII
SPECIAL PROVISIONS APPLICABLE TO LENDERS UPON THE OCCURRENCE OF A
SHARING EVENT
12.1 PARTICIPATIONS.
Upon the occurrence and during the continuation of a Sharing Event, the
Lenders shall automatically and without further action be deemed to have
exchanged interests in the outstanding Loans, outstanding Letters of Credit and
outstanding Bankers' Acceptance Advances such that, in lieu of the interests of
each Lender in each Loan, each outstanding Letter of Credit and each Bankers'
Acceptance Advance, such Lender shall hold an interest in all Revolving Loans
and Swingline Loans, made to the Borrowers, all outstanding Letters of Credit
issued for the account of such Persons or their Subsidiaries at such time, and
all Bankers' Acceptance Advances made for the account of the Borrowers, whether
or not such Lender shall previously have participated therein, equal to such
Lender's Exchange Percentage thereof. The foregoing exchanges shall be
accomplished automatically pursuant to this Section 12.1 through purchases and
sales of participations in the various Loans and outstanding Letters of Credit
as required hereby, although at the request of the Administrative Agent each
Lender hereby agrees to enter into customary participation agreements approved
by the Administrative Agent to evidence the same. All purchases and sales of
participating interests pursuant to this Section 12.1 shall be made in U.S.
Dollars. At the request of the Administrative Agent, each Lender which has sold
participations in any of its Loans and outstanding Letters of Credit as provided
above (through the Administrative Agent) will deliver to each Lender (through
the Administrative Agent) which has so purchased a participating interest
therein a participation certificate in the appropriate amount as determined in
conjunction with the Administrative Agent and the Canadian Agent. It is
understood that the amount of funds delivered by each Lender shall be calculated
on a net basis, giving effect to both the sales and purchases of participations
by the various Lenders as required above.
12.2 ADMINISTRATIVE AGENT'S DETERMINATIONS BINDING.
All determinations by the Administrative Agent pursuant to this Article
XII shall be made by it in accordance with the provisions herein and with the
intent being to equitably share the credit risk after a Sharing Event for all
Loans and Letters of Credit and other Extensions of Credit hereunder in
accordance with the provisions hereof. Absent manifest error, all determinations
by the Administrative Agent hereunder shall be binding on the Credit Parties and
each of the Lenders. The Administrative Agent shall have no liability to any
Credit Party or Lender hereunder for any determinations made by it hereunder
except to the extent resulting from the Administrative Agent's
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gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
12.3 PARTICIPATION PAYMENTS IN U.S. DOLLARS.
Upon, and after, the occurrence of a Sharing Event (a) no further Credit
Extensions shall be made, (b) all amounts from time to time accruing with
respect to, and all amounts from time to time payable on account of, Loans
denominated in Canadian Dollars (including, without limitation, any interest and
other amounts which were accrued but unpaid on the date of such Sharing Event)
shall be payable in U.S. Dollars (taking the Dollar Amount of such amounts on
the date payment is made with respect thereto) and shall be distributed by the
Administrative Agent for the account of the Lenders which made such Loans or are
participating therein and (c) all Commitments shall be automatically terminated.
Notwithstanding anything to the contrary contained above, the failure of any
Lender to purchase its participating interests as required above in any
Extensions of Credit upon the occurrence of a Sharing Event shall not relieve
any other Lender of its obligation hereunder to purchase its participating
interests in a timely manner, but no Lender shall be responsible for the failure
of any other Lender to purchase the participating interest to be purchased by
such other Lender on any date.
12.4 DELINQUENT PARTICIPATION PAYMENTS.
If any amount required to be paid by any Lender pursuant to this Article
XII is not paid to the Administrative Agent on the date upon which the Sharing
Event occurred, such Lender shall, in addition to such aforementioned amount,
also pay to the Administrative Agent on demand an amount equal to the product of
(a) the amount so required to be paid by such Lender for the purchase of its
participations, (b) the daily average Federal Funds Rate, during the period from
and including the date of request for payment to the date on which such payment
is immediately available to the Administrative Agent and (c) a fraction the
numerator of which is the number of days that elapsed during such period and the
denominator of which is 360. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts payable under this Article XII shall
be conclusive in the absence of manifest error. Amounts payable by any Lender
pursuant to this Article XII shall be paid to the Administrative Agent for the
account of the relevant Lenders; provided that, if the Administrative Agent (in
its sole discretion) has elected to fund on behalf of such other Lender the
amounts owing to such other Lenders, then the amounts shall be paid to the
Administrative Agent for its own account.
12.5 SETTLEMENT OF PARTICIPATION PAYMENTS.
Whenever, at any time after the relevant Lenders have received from any
other Lenders purchases of participations pursuant to this Article XII, the
various Lenders receive any payment on account thereof, such Lenders will
distribute to the Administrative Agent, for the account of the various Lenders
participating therein, such Lenders' participating interests in such amounts
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such participations were outstanding) in like funds as
received; provided, however, that in the event that such payment received by any
Lenders is required to be returned, the Lenders who received previous
distributions in respect of their participating interests therein will return to
the respective Lenders any portion thereof previously so distributed to them in
like funds as such payment is required to be returned by the respective Lenders.
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12.6 PARTICIPATION OBLIGATIONS ABSOLUTE.
Each Lender's obligation to purchase participating interests pursuant to
this Article XII shall be absolute and unconditional and shall not be affected
by any circumstance including, without limitation, (a) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against any other
Lender, any Credit Party or any other Person for any reason whatsoever, (b) the
occurrence or continuance of a Default or an Event of Default, (c) any adverse
change in the condition (financial or otherwise) of any Credit Party or any
other Person, (iv) any breach of this Agreement by any Credit Party, any Lender
or any other Person, or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
12.7 INCREASED COSTS; INDEMNITIES.
Notwithstanding anything to the contrary contained elsewhere in this
Agreement, upon any purchase of participations as required above, (a) each
Lender which has purchased such participations shall be entitled to receive from
the Borrowers any increased costs and indemnities directly from Borrowers to the
same extent as if it were the direct Lender as opposed to a participant therein
and (b) each Lender which has sold such participations shall be entitled to
receive from the Borrowers indemnification from and against any and all Taxes
imposed as a result of the sale of the participations pursuant to this Article
XII. Each Borrower acknowledges and agrees that, upon the occurrence of a
Sharing Event and after giving effect to the requirements of this Article XII,
increased Taxes may be owing by it pursuant to Section 2.18, which Taxes shall
be paid (to the extent provided in Section 2.18) by the respective Borrower or
Borrowers, without any claim that the increased Taxes are not payable because
same resulted from the participations effected as otherwise required by this
Article XII.
12.8 PROVISIONS SOLELY TO EFFECT INTERCREDITOR AGREEMENT.
The provisions of this Article XII are and are intended solely for the
purpose of effecting a sharing arrangement among the Lenders and reflects an
agreement among creditors. Except as contemplated by Sections 12.3 and 12.7,
none of the Credit Parties shall have any rights or obligations under this
Article XII. Nothing contained in this Article XII is intended to or shall
impair the obligations of the Credit Parties, which are absolute and
unconditional, to pay the Credit Party Obligations as and when the same shall
become due and payable in accordance with their terms.
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EXHIBIT 4.2
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
COMPANY: ROCK-TENN COMPANY,
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief Financial Officer
CANADIAN
BORROWER: ROCK-TENN COMPANY OF CANADA, a Nova Scotia
unlimited liability company
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief Financial Officer
U.S GUARANTORS:
ROCK-TENN CONVERTING COMPANY, a Georgia corporation
WALDORF CORPORATION, a Delaware corporation
PCPC, Inc., a California corporation
ROCK-TENN COMPANY MILL DIVISION, LLC, a Tennessee
limited liability company
ROCK-TENN PACKAGING AND PAPERBOARD, LLC, a Georgia
limited liability company
ROCK-TENN MILL COMPANY, LLC, a Georgia limited liability
company
ROCK-TENN SHARED SERVICES, LLC, a Georgia limited
liability company
ROCK-TENN SERVICES, INC., a Georgia corporation
ALLIANCE DISPLAY, LLC, a Delaware limited liability company
ROCK-TENN PACKAGING COMPANY, a Delaware corporation
ROCK-TENN COMPANY OF TEXAS, a Georgia corporation
ROCK-TENN PARTITION COMPANY, a Georgia corporation
ROCK-TENN REAL ESTATE, LLC, a Georgia limited liability
Company
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief Financial Officer
CANADIAN GUARANTOOR:
LING INDUSTRIES, INC., a company existing under the
Companies Act (Quebec)
0000-0000 XXXXXX INC., a company existing under the
Companies Act (Quebec)
GROUPE CARTEM WILCO INC., a company existing under the
Companies Act (Quebec)
WILCO, INC., a company existing under the Companies Act (Quebec)
LING QUEBEC, INC., a company existing under the
Companies Act (Quebec)
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and Chief Financial Officer
AGENT: WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Director
LENDER: WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Director
LENDER: SUNTRUST BANK
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
LENDER: BANK OF AMERICA, N.A.,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
LENDER: COBANK, ACB
By: /s/ Xxxxxxx Tousighant
Name: Xxxxxxx Tousighant
Title: Vice President
LENDER: FARM CREDIT BANK OF TEXAS
By: /s/ Xxxx X. X. Xxxxxxx
Name: Xxxx X. X. Xxxxxxx
Title: Vice President
LENDER: COOPERATIVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
"Rabobank International", New York Branch
By: /s/ Xxxxxx Xxxxxxxx-Xxxxxxx
Name: Xxxxxx Xxxxxxxx-Xxxxxxx
Title: Executive Director
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Executive Director
LENDER: REGIONS BANK
By: /s/ J. Xxxxxxx Xxxxx
Name: J. Xxxxxxx Xxxxx
Title: Vice President
LENDER: AGFIRST FARM CREDIT BANK
By: /s/ J. Xxxxxxx Xxxxxxx, Jr.
Name: J. Xxxxxxx Xxxxxxx, Jr.
Title: Vice President
LENDER: GREENSTONE FARM CREDIT SERVICES, FLCA
By: /s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: AVP/Lending Officer
LENDER: RBC CENTURA BANK
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
LENDER: AGSTAR FINANCIAL SERVICES, PCA
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
LENDER: THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
LENDER: CAROLINA FIRST BANK
By: /s/ Xxxxx X. Short
Name: Xxxxx X. Short
Title: Senior Vice President
LENDER: FARM CREDIT SERVICES OF AMERICA, PCA
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
LENDER: 1ST FARM CREDIT SERVICES, PCA
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: VP-Capital Markets
LENDER: PEE DEE FARM CREDIT, ACA
By: /s/ Xxxxxxxxx Xxxxxx
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
LENDER: AGCHOICE FARM CREDIT, FLCA
By: /s/ Xxxx X. Xxxxxxxxxx
Name: Xxxx X. Xxxxxxxxxx
Title: Assistant Secretary - Treasurer
LENDER: BADGERLAND FARM CREDIT SERVICES, ACA
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice-President
LENDER: FARM CREDIT SERVICES OF MISSOURI, PCA
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Senior Vice President, Credit Services
LENDER: FARM CREDIT SERVICES OF THE MOUNTAIN PLAINS, PCA
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
CANADIAN AGENT: BANK OF AMERICA, N.A. ACTING THROUGH ITS CANADA BRANCH,
as Canadian Agent
By: /s/ Xxxxxx Sales xx Xxxxxxx
Name: Xxxxxx Sales xx Xxxxxxx
Title: Assistant Vice-President
CANADIAN LENDER: BANK OF AMERICA, N.A. ACTING THROUGH ITS CANADA BRANCH,
as a Canadian Lender
By: /s/ Xxxxxx Sales xx Xxxxxxx
Name: Xxxxxx Sales xx Xxxxxxx
Title: Assistant Vice-President
CANADIAN LENDER: RABOBANK NEDERLAND, CANADIAN BRANCH
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Executive Director
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Financial Analyst, Vice-President
CANADIAN LENDER: [Congress Financial Corporation Canada]
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
