EXHIBIT 4.1
$450,000,000
CREDIT AGREEMENT
Among
INTERNATIONAL MULTIFOODS CORPORATION,
as U.S. Borrower,
XXXXX XXXX MULTIFOODS INC.
as Canadian Borrower,
The Several Lenders
from Time to Time Parties Hereto,
RABOBANK INTERNATIONAL,
as Documentation Agent,
U.S. BANK NATIONAL ASSOCIATION and UBS WARBURG LLC,
as Syndication Agents,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as U.S. Administrative Agent and Canadian Administrative Agent
Dated as of September 28, 2001
CIBC WORLD MARKETS CORP.,
as Sole Lead Arranger and Sole Book Runner
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS..........................................................................................1
1.1 Defined Terms..........................................................................1
1.2 Other Definitional Provisions.........................................................33
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.....................................................................33
2.1 U.S. Term Commitments.................................................................33
2.2 Procedure for U.S. Term Loan Borrowing................................................33
2.3 Repayment of U.S. Term Loans..........................................................34
2.4 Canadian Term Commitments.............................................................35
2.5 Procedure for Canadian Term Loan Borrowing............................................35
2.6 Repayment of Canadian Term Loans......................................................36
2.7 U.S. Revolving Commitments............................................................36
2.8 Procedure for U.S. Revolving Loan Borrowing...........................................37
2.9 Canadian Revolving Commitments........................................................37
2.10 Procedure for Canadian Revolving Loan Borrowing.......................................38
2.11 Bankers' Acceptances..................................................................38
2.12 Circumstances Making Bankers' Acceptances Unavailable.................................42
2.13 Canadian Swingline Commitment.........................................................43
2.14 Repayment of Canadian Swingline Loans.................................................43
2.15 Commitment Fees, etc..................................................................43
2.16 Termination or Reduction of Commitments and Canadian Swingline Commitment.............44
2.17 Optional Prepayments..................................................................45
2.18 Mandatory Prepayments and Commitment Reductions.......................................45
2.19 Conversion and Continuation Options...................................................48
2.20 Limitations on Eurodollar Tranches....................................................49
2.21 Interest Rates and Payment Dates......................................................49
2.22 Computation of Interest and Fees......................................................51
2.23 Inability to Determine Interest Rate..................................................52
2.24 Pro Rata Treatment and Payments.......................................................52
2.25 Requirements of Law...................................................................54
2.26 Taxes.................................................................................55
2.27 Indemnity.............................................................................57
2.28 Change of Lending Office..............................................................57
2.29 Replacement of Lenders................................................................58
2.30 Controls; Currency Exchange Rate Fluctuations.........................................58
2.31 Occurrence of a Rescission Event......................................................59
SECTION 3. LETTERS OF CREDIT...................................................................................60
3.1 L/C Commitment........................................................................60
3.2 Procedure for Issuance of Letters of Credit...........................................60
3.3 Fees and Other Charges................................................................61
3.4 L/C Participations....................................................................62
3.5 Reimbursement Obligation of the Borrowers.............................................62
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3.6 Obligations Absolute..................................................................63
3.7 Letter of Credit Payments.............................................................63
3.8 Applications..........................................................................64
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................................................64
4.1 Financial Condition...................................................................64
4.2 No Change.............................................................................65
4.3 Existence; Compliance with Law........................................................65
4.4 Power; Authorization; Enforceable Obligations.........................................65
4.5 No Legal Bar..........................................................................66
4.6 Litigation............................................................................66
4.7 No Default............................................................................66
4.8 Ownership of Property; Liens..........................................................66
4.9 Intellectual Property.................................................................66
4.10 Taxes.................................................................................67
4.11 Federal Regulations...................................................................67
4.12 Labor Matters.........................................................................67
4.13 ERISA.................................................................................67
4.14 Investment Company Act; Other Regulations.............................................68
4.15 Subsidiaries..........................................................................68
4.16 Use of Proceeds.......................................................................68
4.17 Environmental Matters.................................................................68
4.18 Accuracy of Information, etc..........................................................69
4.19 Security Documents....................................................................70
4.20 Solvency..............................................................................72
4.21 Regulation H..........................................................................72
4.22 Certain Documents.....................................................................72
SECTION 5. CONDITIONS PRECEDENT................................................................................72
5.1 Conditions to Initial Extension of Credit.............................................72
5.2 Conditions to Each Extension of Credit................................................78
SECTION 6. AFFIRMATIVE COVENANTS...............................................................................78
6.1 Financial Statements..................................................................78
6.2 Certificates; Other Information. Furnish to each Administrative Agent and each Lender
(or, in the case of clause (h), to the relevant Lender):..............................79
6.3 Payment of Obligations................................................................81
6.4 Maintenance of Existence; Compliance..................................................81
6.5 Maintenance of Property; Insurance....................................................81
6.6 Inspection of Property; Books and Records; Discussions................................81
6.7 Notices...............................................................................81
6.8 Environmental Management..............................................................82
6.9 Additional Collateral, etc............................................................83
SECTION 7. NEGATIVE COVENANTS..................................................................................85
7.1 Financial Condition Covenants.........................................................85
7.2 Indebtedness..........................................................................87
7.3 Liens.................................................................................88
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7.4 Fundamental Changes...................................................................89
7.5 Disposition of Property...............................................................90
7.6 Restricted Payments...................................................................90
7.7 Capital Expenditures..................................................................91
7.8 Investments...........................................................................91
7.9 Optional Payments and Modifications of Certain Debt Instruments; Synthetic Purchase
Agreements............................................................................92
7.10 Transactions with Affiliates..........................................................92
7.11 Sales and Leasebacks..................................................................93
7.12 Changes in Fiscal Periods.............................................................93
7.13 Negative Pledge Clauses...............................................................93
7.14 Clauses Restricting Subsidiary Distributions..........................................93
7.15 Lines of Business.....................................................................94
7.16 Amendments to Acquisition Documents...................................................94
SECTION 8. EVENTS OF DEFAULT...................................................................................94
SECTION 9. THE AGENTS..........................................................................................97
9.1 Appointment...........................................................................97
9.2 Delegation of Duties..................................................................99
9.3 Exculpatory Provisions................................................................99
9.4 Reliance by Administrative Agents.....................................................99
9.5 Notice of Default.....................................................................99
9.6 Non-Reliance on Agents and Other Lenders.............................................100
9.7 Indemnification......................................................................100
9.8 Agent in Its Individual Capacity.....................................................101
9.9 Successor Administrative Agents......................................................101
9.10 Documentation Agent and Syndication Agents...........................................101
SECTION 10. MISCELLANEOUS.....................................................................................102
10.1 Amendments and Waivers...............................................................102
10.2 Notices..............................................................................103
10.3 No Waiver; Cumulative Remedies.......................................................104
10.4 Survival of Representations and Warranties...........................................104
10.5 Payment of Expenses and Taxes........................................................104
10.6 Successors and Assigns; Participations and Assignments...............................105
10.7 Adjustments; Set-off.................................................................108
10.8 Counterparts.........................................................................109
10.9 Severability.........................................................................110
10.10 Integration..........................................................................110
10.11 GOVERNING LAW........................................................................110
10.12 Submission To Jurisdiction; Waivers..................................................110
10.13 Acknowledgements.....................................................................111
10.14 Releases of Guarantees and Liens.....................................................111
10.15 Confidentiality......................................................................111
10.16 Delivery of Lender Addenda...........................................................112
10.17 WAIVERS OF JURY TRIAL................................................................112
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ANNEX:
A-1 Pricing Grid for Revolving Loans, Canadian Swingline Loans,
Tranche A Term Loans and Commitment Fee Rate
A-2 Pricing Grid for U.S. Tranche B Term Loans
SCHEDULES:
1.1A Mortgaged Property
1.1B Lending Offices
1.1C Bridge Facility Term Sheet
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
7.1 Existing Quarterly Results
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A-1 Form of U.S. Guarantee and Collateral Agreement
A-2 Form of Canadian Collateral Agreement
A-3 Form of Canadian Pledge Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Lender Addendum
E Form of U.S. Mortgage (Fee)
F Form of Assignment and Acceptance
G Form of Prepayment Option Notice
H Form of Exemption Certificate
CREDIT AGREEMENT (this "AGREEMENT"), dated as of September 28,
2001, among
INTERNATIONAL MULTIFOODS CORPORATION, a Delaware corporation (the
"U.S. BORROWER"), XXXXX XXXX MULTIFOODS INC., a corporation organized under the
laws of the Province of Ontario and a Subsidiary of the U.S. Borrower (the
"CANADIAN BORROWER"), the several banks and other financial institutions or
entities from time to time parties to this Agreement (the "LENDERS"), RABOBANK
INTERNATIONAL, as documentation agent for the Lenders (in such capacity, the
"DOCUMENTATION AGENT"), U.S. BANK NATIONAL ASSOCIATION and UBS WARBURG LLC, as
syndication agents (in such capacity, the "SYNDICATION AGENTS"), and CANADIAN
IMPERIAL BANK OF COMMERCE, as administrative agent for the U.S. Lenders (in such
capacity, the "U.S. ADMINISTRATIVE AGENT") and as administrative agent for the
Canadian Lenders (in such capacity, the "CANADIAN ADMINISTRATIVE AGENT").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in
this Section 1.1.
"ABR": for any day, a rate per annum equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the ABR due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is
based upon the ABR.
"ACCEPTANCE FEE": the fee payable in Canadian Dollars to each
Canadian Lender in respect of Bankers' Acceptances computed in accordance with
Section 2.11(e).
"ACQUISITION": as defined in Section 5.1(b).
"ACQUISITION AGREEMENT": the Amended and Restated Asset
Purchase and Sale Agreement to be entered into among the U.S. Borrower, General
Xxxxx and The Pillsbury Company on substantially the terms and conditions set
forth in the draft thereof dated August 19, 2001, previously delivered to the
Administrative Agents, with such changes therein as are not adverse to the U.S.
Borrower or the Lenders or as shall be approved in writing by the Administrative
Agents, as the same, after the execution thereof, may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.16.
"ACQUISITION DOCUMENTATION": collectively, the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case in form and substance satisfactory to the Arranger.
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"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENTS": the collective reference to the U.S.
Administrative Agent and the Canadian Administrative Agent.
"AFFILIATE": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "CONTROL" of a Person means
the power, directly or indirectly, either to (a) vote 15% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGENTS": the collective reference to the Syndication
Agents, the Documentation Agent, the Collateral Agent and the Administrative
Agents.
"AGGREGATE EXPOSURE": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans, (ii) the
amount of such Lender's Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the amount of such Lender's
Revolving Extensions of Credit then outstanding and (iii) the amount of such
Lender's Canadian Swingline Commitment then in effect or, if the Canadian
Swingline Commitment has been terminated, the amount of such Lender's Canadian
Swingline Extensions of Credit then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any
Lender at any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposures of all Lenders at
such time.
"AGREEMENT": as defined in the preamble hereto.
"APPLICABLE BA DISCOUNT RATE": in respect of a Bankers'
Acceptance, (a) for a Canadian Lender that is listed in Schedule I to the Bank
Act (Canada), the CDOR Rate at approximately 10:00 a.m., Toronto time, on such
Borrowing Date for bankers' acceptances having a comparable maturity date as the
maturity date of such Bankers' Acceptance and (b) for any other Canadian Lender
the CDOR Rate at approximately 10:00 a.m., Toronto time, on such Borrowing Date
for bankers' acceptances having a comparable maturity date as the maturity date
of such Bankers' Acceptance, PLUS 0.10%.
"APPLICABLE MARGIN": (a) for each Type of U.S. Loan, the
rate per annum set forth under the relevant column heading below:
ABR LOANS EURODOLLAR LOANS
--------- ----------------
U.S. Revolving Loans 2.00% 3.00%
U.S. Tranche A Term Loans 2.00% 3.00%
U.S. Tranche B Term Loans 2.00% 3.00%;
PROVIDED that on and after the first Adjustment Date occurring after delivery of
the financial statements pursuant to Section 6.1(b) for the fiscal quarter of
the U.S. Borrower ending March 2,
3
2002, the Applicable Margin with respect to U.S. Loans will be determined
pursuant to the Pricing Grid; and
(b) for each Type of Canadian Loan, the rate per annum set
forth under the relevant column heading below:
U.S. Base Rate Bankers'
C$ Prime Loans Loans Eurodollar Loans Acceptances
-------------- -------------- ---------------- -----------
Canadian Revolving Loans 2.00% 2.00% 3.00% 3.00%
Canadian Swingline Loans 2.00% N/A N/A N/A
Canadian Term Loans 2.00% 2.00% 3.00% 3.00%;
PROVIDED that on and after the first Adjustment Date occurring after delivery of
the financial statements pursuant to Section 6.1(b) for the fiscal quarter of
the U.S. Borrower ending March 2, 2002, the Applicable Margin with respect to
all Canadian Loans will be determined pursuant to the Pricing Grid.
"APPLICATION": an application, in such form as an Issuing
Lender may specify from time to time, requesting such Issuing Lender to open
a Letter of Credit.
"ARRANGER": CIBC World Markets Corp., as sole lead
arranger and sole book runner of the Facilities.
"ASSET SALE": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clauses
(a), (b), (c), (d) or (f) of Section 7.5) that yields gross proceeds to any
Group Member (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance,
substantially in the form of Exhibit F.
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE CANADIAN REVOLVING COMMITMENT": as to any Canadian
Revolving Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Canadian Revolving Commitment then in effect OVER (b) such Lender's
Canadian Revolving Loans then outstanding.
"AVAILABLE CANADIAN SWINGLINE COMMITMENT": as to the Canadian
Swingline Lender at any time, an amount equal to the excess, if any, of (a) the
Canadian Swingline Commitment then in effect OVER (b) the aggregate Canadian
Swingline Extensions of Credit then outstanding.
"AVAILABLE U.S. REVOLVING COMMITMENT": as to any U.S.
Revolving Lender at any time, an amount equal to the excess, if any, of (a)
such Lender's U.S. Revolving
4
Commitment then in effect OVER (b) such Lender's U.S. Revolving Extensions of
Credit then outstanding.
"BA DISCOUNT PROCEEDS": in respect of any Bankers' Acceptance
to be purchased by a Canadian Lender on any day under Section 2.11, an amount
(rounded to the nearest whole Canadian cent, and with one-half of one Canadian
cent being rounded up) calculated on such day by dividing: (a) the face amount
of such Bankers' Acceptance by (b) the sum of (i) one PLUS (ii) the product
(rounded up or down to the fifth decimal place (with .000005 being rounded up))
of: (A) the Applicable BA Discount Rate (expressed as a decimal) applicable to
such Bankers' Acceptance and (B) a fraction, the numerator of which is the
number of days remaining in the term of such Bankers' Acceptance and the
denominator of which is 365.
"BANKERS' ACCEPTANCE": a Draft denominated in Canadian
Dollars drawn by the Canadian Borrower and accepted by a Canadian Lender
pursuant to Section 2.11.
"BANK OF AMERICA HEDGE AGREEMENT": the Hedge Agreement,
reference number 171554, between the U.S. Borrower and Bank of America, N.A.,
as counterparty, in respect of the aggregate notional amount of $25,000,000,
which Hedge Agreement terminates on November 30, 2001.
"BANK OF CANADA NOON RATE": the spot wholesale transaction
buying rate of the Bank of Canada for the purchase of Dollars with Canadian
Dollars or Canadian Dollars with Dollars, as the case may be, in effect as of
12:00 noon, Toronto time, on the Business Day with respect to which such
computation is required.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve
System of the United States or any successor thereto.
"BORROWERS": the collective reference to the U.S. Borrower
and the Canadian Borrower.
"BORROWING DATE": any Business Day specified by a Borrower
as a date on which such Borrower requests the relevant Lenders to make Loans
to it hereunder.
"BRIDGE FACILITY": a $200,000,000 credit facility to be
provided to the U.S. Borrower pursuant to the Bridge Facility Loan
Documentation, and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof or any shortening of the
maturity of any principal amount thereof), including without limitation, any
such refinancing with the issuance of senior notes (which may be sold in a
public offering or private placement) or other refinancings, in each case on
terms that are contained in documentation complete and correct copies of which
have been delivered to the Administrative Agents and that are no less favorable
to the Loan Parties and the Lenders than the terms under the Bridge Facility
Loan Documentation.
"BRIDGE FACILITY LOAN AGREEMENT": a senior unsecured loan
agreement to be entered into by the U.S. Borrower in connection with the Bridge
Facility which contains the
5
terms and conditions set forth on Schedule 1.1C and is otherwise in form and
substance satisfactory to the Administrative Agents, as the same, after the
execution thereof, may be amended, supplemented or otherwise modified from
time to time in accordance with Section 7.9.
"BRIDGE FACILITY LOAN DOCUMENTATION": the Bridge Facility Loan
Agreement, together with all instruments and other agreements entered into by
the U.S. Borrower and certain of its Subsidiaries in connection therewith, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with Section 7.9.
"BUSINESS DAY": (a) for all purposes other than as set forth
in clauses (b) and (c) below, a day other than a Saturday, Sunday or other day
on which commercial banks in
New York City are authorized or required by law to
close, (b) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day described
in clause (a) above and which is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market in London and (c) for all
purposes in connection with a Canadian Loan or a Canadian Letter of Credit other
than as set forth in clause (b), a day on which banks are open for business in
Toronto, Canada other than a Saturday, Sunday or other day which is a legal
holiday in Toronto, Canada.
"CANADIAN ADMINISTRATIVE AGENT": CIBC, together with its
affiliates, as the arranger of the Canadian Commitments and as the
administrative agent for the Canadian Lenders under this Agreement and the other
Loan Documents, together with any of its successors.
"CANADIAN BORROWER": as defined in the preamble hereto.
"CANADIAN COLLATERAL AGREEMENT": the Collateral Agreement
to be executed and delivered by each of the grantors party thereto,
substantially in the form of Exhibit A-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"CANADIAN COMMITMENTS": as to any Canadian Lender, the sum
of the Canadian Term Commitment, the Canadian Revolving Commitment and the
Canadian Swingline Commitment of such Lender.
"CANADIAN DOLLAR EQUIVALENT": with respect to any amount
of Dollars on any date, the equivalent amount in Canadian Dollars of such
amount of currency as determined by the relevant Administrative Agent using
the applicable Exchange Rate.
"C$ EXCESS": as defined in Section 2.30(c).
"C$ PRIME LOANS": Loans the rate of interest applicable to
which is based upon the C$ Prime Rate.
"C$ PRIME RATE": on any day, the greater of (a) the rate per
annum announced from time to time by CIBC as its reference rate then in effect
for determining interest rates on Canadian Dollar denominated commercial loans
in Canada and (b) the rate per annum equal to the sum of (i) the CDOR Rate and
(ii) 0.50% per annum.
"CANADIAN DOLLARS" and "C$": dollars in lawful currency of
Canada.
6
"CANADIAN ISSUING LENDER": CIBC, in its capacity as issuer
of any Canadian Letter of Credit.
"CANADIAN L/C OBLIGATIONS": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Canadian Letters of Credit and (b) the aggregate amount of drawings
under Canadian Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.
"CANADIAN LENDERS": the collective reference to the
Canadian Term Lenders, the Canadian Revolving Lenders and the Canadian
Swingline Lender.
"CANADIAN LENDING OFFICE": as to each Canadian Lender, the
office in Canada specified as the "Canadian Lending Office" of such Lender on
Schedule 1.1B or in an Assignment and Acceptance, as the case may be, or such
other office in Canada as may be designated by such Lender by written notice to
the Canadian Borrower and the Canadian Administrative Agent.
"CANADIAN LETTERS OF CREDIT": as defined in Section 3.1(b).
"CANADIAN LOANS": the collective reference to all Loans to
the Canadian Borrower.
"CANADIAN MORTGAGED PROPERTIES": the real properties listed
and identified as such on Part B of Schedule 1.1A (other than the Quebec
Mortgaged Properties), as to which the Collateral Agent, for the benefit of the
Canadian Lenders, shall be granted a Lien pursuant to the Canadian Mortgages.
"CANADIAN MORTGAGES": the collective reference to (a) the
Debenture to be executed by the Canadian Borrower and/or each Canadian
Subsidiary Guarantor that owns a Canadian Mortgaged Property in favor of the
Collateral Agent, for the benefit of the Canadian Lenders, and (b) the Pledge of
Debenture to be executed by the Canadian Borrower and/or each such Canadian
Subsidiary Guarantor in favor of the Collateral Agent, for the benefit of the
Canadian Lenders, in each case, substantially on terms contained in the U.S.
Mortgage (to the extent applicable) and otherwise in form and substance
reasonably satisfactory to the Canadian Administrative Agent (with such changes
thereto as shall be advisable under the law of the jurisdiction in which such
Debenture or Pledge of Debenture is to be recorded), in the case of any fee
interests, or in form and substance reasonably satisfactory to the Canadian
Administrative Agent, in the case of any leasehold interests in which a Lien may
in the future be created to secure the Obligations (or any portion thereof), as
each of the foregoing, after the execution thereof, may be amended, supplemented
or otherwise modified from time to time.
"CANADIAN PLEDGE AGREEMENT": the Securities Pledge
Agreement to be executed and delivered by the U.S. Borrower, substantially in
the form of Exhibit A-3, as the same may be amended, supplemented or
otherwise modified from time to time.
"CANADIAN REIMBURSEMENT OBLIGATIONS": the obligation of
the Canadian Borrower to reimburse the Canadian Issuing Lender pursuant to
Section 3.5(b) for amounts drawn under Canadian Letters of Credit.
7
"CANADIAN REVOLVING COMMITMENT": as to any Canadian Lender,
the obligation of such Lender, if any, to make Canadian Revolving Loans in an
aggregate principal amount at any one time outstanding not to exceed the
Canadian Dollar Equivalent on the Business Day prior to the Closing Date of the
amount set forth opposite the heading "Canadian Revolving Commitment" on
Schedule 1 to the Lender Addendum delivered by such Lender or in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the same
may be modified from time to time pursuant to the terms hereof.
"CANADIAN REVOLVING FACILITY": the Canadian Revolving
Commitments and the extensions of credit made thereunder.
"CANADIAN REVOLVING LENDER": each Canadian Lender that has
a Canadian Revolving Commitment or that holds Canadian Revolving Loans.
"CANADIAN REVOLVING LOANS": as defined in Section 2.9.
"CANADIAN REVOLVING PERCENTAGE": as to any Canadian Revolving
Lender at any time, the percentage which such Lender's Canadian Revolving
Commitment then in effect constitutes of the Total Canadian Revolving
Commitments then in effect or, at any time after the Canadian Revolving
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Canadian Revolving Loans then outstanding
constitutes of the aggregate principal amount of the Canadian Revolving Loans
then outstanding.
"CANADIAN SUBSIDIARY GUARANTOR": each Subsidiary of the
Canadian Borrower, other than, subject to Section 6.9(f), 985079 Ontario, Inc.
"CANADIAN SWINGLINE COMMITMENT": as to the Canadian Swingline
Lender, the obligation of such Lender to make Canadian Swingline Loans in an
aggregate principal amount not to exceed C$7,500,000, as the same may be
modified from time to time pursuant to the terms hereof.
"CANADIAN SWINGLINE EXTENSIONS OF CREDIT": as to the Canadian
Swingline Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Canadian Swingline Loans then outstanding and (b) the
aggregate amount of Canadian L/C Obligations then outstanding.
"CANADIAN SWINGLINE FACILITY": the Canadian Swingline
Commitment and the extensions of credit made thereunder.
"CANADIAN SWINGLINE LENDER": CIBC , in its capacity as the
lender of Canadian Swingline Loans.
"CANADIAN SWINGLINE LOANS": as defined in Section 2.13.
"CANADIAN TERM COMMITMENT": as to any Canadian Lender, the
obligation of such Lender, if any, to make a Canadian Term Loan to the Canadian
Borrower hereunder on the Closing Date in a principal amount not to exceed the
Canadian Dollar Equivalent on the Business Day prior to the Closing Date of the
amount set forth opposite the heading "Canadian
8
Term Commitment" on Schedule 1 to the Lender Addendum delivered by such
Lender. The original aggregate amount of the Canadian Term Commitments is the
Canadian Dollar Equivalent on the Business Day prior to the Closing Date of
$60,000,000.
"CANADIAN TERM FACILITY": the Canadian Term Commitments
and the Canadian Term Loans made thereunder.
"CANADIAN TERM LENDER": each Canadian Lender that has a
Canadian Term Commitment or is the holder of a Canadian Term Loan.
"CANADIAN TERM LOAN": as defined in Section 2.4.
"CANADIAN TERM PERCENTAGE": as to any Canadian Term Lender at
any time, the percentage which such Lender's Canadian Term Commitment then in
effect constitutes of the aggregate Canadian Term Commitments then in effect or,
at any time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Canadian Term Loans then outstanding constitutes of the
aggregate principal amount of the Canadian Term Loans then outstanding.
"CANADIAN WHOLLY OWNED SUBSIDIARY GUARANTOR": any Canadian
Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Canadian
Borrower.
"CAPITAL EXPENDITURES": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries, PROVIDED that
for all purposes other than the calculation of Excess Cash Flow, the purchase by
any Group Member from General Xxxxx of the Toledo Facility as contemplated by
the Acquisition Agreement, and the incurrence of additional capital expenditures
in connection therewith (to the extent such purchase price and additional
capital expenditures do not, in the aggregate, exceed $12,000,000) shall not
constitute a Capital Expenditure.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or the
Canadian government or issued by any agency thereof and backed by the full faith
and credit of the United States or
9
Canada, as the case may be, in each case maturing within one year from the
date of acquisition; (b) certificates of deposit, time deposits, eurodollar
time deposits or overnight bank deposits having maturities of six months or
less from the date of acquisition issued by any Lender or by any commercial
bank organized under the laws of the United States or any state thereof or
Canada or any province thereof having combined capital and surplus of not
less than $500,000,000 or the Canadian Dollar Equivalent thereof; (c)
commercial paper of an issuer rated at least A-1 by S&P, P-1 by Moody's or
R-1 (high) by the Dominion Bond Rating Services, Inc. ("DBRS"), or carrying
an equivalent rating by a nationally recognized rating agency, if both of the
two named United States rating agencies or the named Canadian rating agency
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days, with respect
to securities issued or fully guaranteed or insured by the United States
government or the Canadian government; (e) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth, province or territory of the United States or Canada, by
any political subdivision or taxing authority of any such state,
commonwealth, province or territory or by any foreign government, the
securities of which state, commonwealth, province, territory, political
subdivision, taxing authority or foreign government, as the case may be, are
rated at least A by S&P, A by Moody's or A by DBRS; (f) securities with
maturities of six months or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; or (g) shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
"CDOR RATE": on any day, the rate per annum based on the rates
applicable to Canadian Dollar bankers' acceptances for a term of thirty days
(rounded up to two decimal places in the case of the definition of "C$ PRIME
RATE") or for a term equivalent to the term of, and amounts comparable to the
amount of, the relevant Bankers' Acceptances (in the case of the definition of
"APPLICABLE BA DISCOUNT RATE") appearing on the "Reuters Screen CDOR Page" (as
defined in the International Swap Dealer Association, Inc. definitions, as
modified and amended from time to time) for acceptances of Schedule I banks
under the Bank Act (Canada) as of 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;
PROVIDED, HOWEVER, that if no such rate appears on the Reuters Screen CDOR Page
as contemplated, then the CDOR Rate on any day shall be calculated as the rate
for the term referred to above applicable to Canadian Dollar bankers'
acceptances quoted by CIBC as of 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.
"CIBC": Canadian Imperial Bank of Commerce, a Canadian
chartered bank, or one or more of its agencies, branches or affiliates.
"CLOSING DATE": the date on which the conditions precedent
set forth in Section 5.1 shall have been satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
10
"COLLATERAL": all property of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COLLATERAL AGENT": CIBC, in its capacity as collateral
agent for the Secured Parties, together with any of its successors.
"COMMITMENT": as to any Lender, the sum of the U.S.
Commitments and the Canadian Commitments of such Lender.
"COMMITMENT FEE RATE": (a) for any Revolving Commitment, 1/2
of 1% per annum; PROVIDED that on and after the first Adjustment Date occurring
after delivery of the financial statements pursuant to Section 6.1(b) for the
fiscal quarter of the U.S. Borrower ending on March 2, 2002, the Commitment Fee
Rate with respect to Revolving Loans will be determined pursuant to the Pricing
Grid and (b) for each of the U.S. Tranche A Term Commitment, the U.S. Tranche B
Term Commitment or the Canadian Tranche A Term Commitment, 3.00% per annum.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the U.S. Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes the U.S.
Borrower and that is treated as a single employer under Section 414 of the
Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"CONDUIT LENDER": any special purpose corporation organized
and administered by any Lender for the purpose of making Loans otherwise
required to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the relevant Administrative Agent and the
relevant Borrower (which consent shall not be unreasonably withheld); PROVIDED
that the designation by any Lender of a Conduit Lender shall not relieve the
designating Lender of any of its obligations to fund a Loan under this Agreement
if, for any reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender, and PROVIDED, FURTHER, that
no Conduit Lender shall (a) be entitled to receive any greater amount pursuant
to Section 2.25, 2.26, 2.27 or 10.5 than the designating Lender would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Lender or (b) be deemed to have any Commitment.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential
Information Memorandum dated May 2001 and furnished to the Lenders.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the U.S. Borrower and its Subsidiaries at such
date.
11
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the U.S. Borrower and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the U.S. Borrower and its Subsidiaries and
(b) without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans or Canadian Swingline Loans to the extent otherwise included
therein; PROVIDED, HOWEVER, that the accrued and unpaid interest on the Senior
Notes or, as applicable, the loans under the Bridge Facility at the end of the
2002 fiscal year of the U.S. Borrower shall be deemed to equal the amount of
accrued and unpaid interest on the Senior Notes or, as applicable, the loans
under the Bridge Facility at the end of the 2003 fiscal year of the U.S.
Borrower.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income
for such period PLUS, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, the sum
of (a) income tax expense, (b) interest expense, amortization or writeoff of
debt discount and debt issuance costs and commissions, discounts and other fees
and charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), PROVIDED that the amounts referred to in this clause (e)
(other than in respect of any non-cash write-downs relating to the "Multifoods
Distribution Group" segment of the U.S. Borrower and its Subsidiaries) shall
not, in the aggregate, exceed $10,000,000 for any fiscal year of the U.S.
Borrower, (f) any non-recurring start-up costs incurred during the period from
the beginning of the U.S. Borrower's 2002 fiscal year to the end of the U.S.
Borrower's 2003 fiscal year associated with the businesses acquired pursuant to
the Acquisition; PROVIDED that the amounts referred to in this clause (f) shall
not, in the aggregate, exceed $4,500,000 during the U.S. Borrower's 2002 fiscal
year or $4,500,000 during the U.S. Borrower's 2003 fiscal year (but in no event
in excess of $7,500,000 in the aggregate during both such fiscal years) and
PROVIDED, FURTHER, that such amounts shall be specified in reasonable detail in
each applicable Compliance Certificate, and (g) any other non-cash charges or
expenses, and MINUS, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income, (b) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business), (c) any non-cash income or gains under any
Plan or any other pension plan and (d) any other non-cash income, all as
determined on a consolidated basis. For the purposes of calculating Consolidated
EBITDA for any period of four consecutive fiscal quarters (each, a "REFERENCE
PERIOD") pursuant to any determination of the Consolidated Leverage Ratio, (i)
if at any time during such Reference Period the U.S. Borrower or any of its
Subsidiaries shall have made any Material Disposition, the Consolidated EBITDA
for such Reference Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Reference Period or increased by
an amount equal to the Consolidated EBITDA (if negative) attributable thereto
for such Reference Period and (ii) if during such Reference Period the U.S.
Borrower or any of its Subsidiaries shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
PRO FORMA effect thereto as if such Material Acquisition
12
occurred on the first day of such Reference Period. As used in this
definition, "MATERIAL ACQUISITION" means any acquisition of property or
series of related acquisitions of property that (a) constitutes assets
comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by the U.S. Borrower and its
Subsidiaries in excess of $10,000,000; and "MATERIAL DISPOSITION" means any
Disposition of property or series of related Dispositions of property that
yields gross proceeds to the U.S. Borrower or any of its Subsidiaries in
excess of $10,000,000.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period,
the ratio of (a) the sum of (i) Consolidated EBITDA for such period plus (ii)
Consolidated Lease Expense for such period and less (iii) the aggregate amount
actually paid by the U.S. Borrower and its Subsidiaries during such period on
account of Capital Expenditures that are not financed with long-term
Indebtedness permitted by Section 7.2(e) to (b) Consolidated Fixed Charges for
such period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period and (c) scheduled payments made
during such period on account of principal of Indebtedness of the U.S. Borrower
or any of its Subsidiaries (including scheduled principal payments in respect of
the Term Loans but specifically excluding any payments in respect of Revolving
Loans).
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period,
the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE": for any period, the excess of
(a) total net interest expense of the U.S. Borrower and its Subsidiaries for
such period with respect to all outstanding Indebtedness of the U.S. Borrower
and its Subsidiaries determined in accordance with GAAP (including that
attributable to Capital Lease Obligations and including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP) over (b) the sum of the following for such period (but
only to the extent included in the amount calculated pursuant to clause (a)
above): (i) amortization of financing fees with respect to any Indebtedness of
the U.S. Borrower and its Subsidiaries and (ii) non-cash interest expense.
"CONSOLIDATED LEASE EXPENSE": for any period, the
aggregate amount of fixed and contingent rent expense of the U.S. Borrower
and its Subsidiaries for such period with respect to leases of real and
personal property, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO": as at the last day of any
period, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated
EBITDA for such period, PROVIDED that, in calculating Consolidated Total Debt
for purposes of this definition, the amount of Revolving Loans outstanding on
such day shall be deemed to be equal to the average of the aggregate Revolving
Loans outstanding on such day and of the aggregate Revolving Loans
13
outstanding on the respective last days of each of the three (or less, if
applicable) most recently preceding fiscal quarters ending subsequent to the
Closing Date.
"CONSOLIDATED NET INCOME": for any period, the consolidated
net income (or loss) of the U.S. Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that there shall be
excluded (a) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of the U.S. Borrower or is merged into or consolidated with
the U.S. Borrower or any of its Subsidiaries, (b) the income (or loss) of any
Person (other than a Subsidiary of the U.S. Borrower) in which the U.S. Borrower
or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by the U.S. Borrower or such Subsidiary in
the form of cash dividends or similar distributions and (c) the undistributed
earnings of any Subsidiary of the U.S. Borrower to the extent that the
declaration or payment of cash dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
"CONSOLIDATED TOTAL DEBT": at any date, the aggregate
principal amount of all Indebtedness of the U.S. Borrower and its Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP, less
the aggregate amount of all standby Letters of Credit and surety bonds not
supporting Indebtedness.
"CONSOLIDATED WORKING CAPITAL": at any date, the excess of
Consolidated Current Assets on such date OVER Consolidated Current
Liabilities on such date.
"CONTINUING DIRECTORS": the directors of the U.S. Borrower on
the Closing Date, after giving effect to the Acquisition and the other
transactions contemplated hereby, and each other director, if, such other
director's nomination for election to the board of directors of the U.S.
Borrower is recommended by at least a majority of the then Continuing Directors.
"CONTRACTUAL OBLIGATION": as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of
its property is bound.
"CONVERSION PLAN AGREEMENT": the Conversion Plan Agreement to
be entered into among General Xxxxx and the U.S. Borrower on substantially the
terms and conditions set forth in the draft thereof dated August 21, 2001,
previously delivered to the Administrative Agents, with such changes therein as
are not adverse to the U.S. Borrower or the Lenders or as shall be approved in
writing by the Administrative Agents, as the same, after the execution thereof,
may be amended, supplemented or otherwise modified from time to time in
accordance with Section 7.16.
"DEFAULT": any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"DISPOSITION": with respect to any property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof. The terms "DISPOSE" and "DISPOSED OF" shall have
correlative meanings.
14
"DOCUMENTATION AGENT": as defined in the preamble hereto.
"DOLLAR EQUIVALENT": with respect to any amount of
Canadian Dollars on any date, the equivalent amount in Dollars of such amount
of currency as determined by the relevant Administrative Agent using the
applicable Exchange Rate.
"DOLLARS" and "$": dollars in lawful currency of the United
States.
"DOMESTIC SUBSIDIARY": any Subsidiary of the U.S. Borrower
organized under the laws of any jurisdiction within the United States.
"DRAFT": a blank non-interest bearing xxxx of exchange, within
the meaning of the Bills of Exchange Act (Canada), or a blank depository xxxx
within the meaning of the Depository Bills and Notes Act (Canada), as
applicable, drawn by the Canadian Borrower and addressed to a Canadian Lender,
denominated in Canadian Dollars and bearing such distinguishing letters and
numbers as such Lender may determine, but which at such time, except as
otherwise provided herein, has not been completed or accepted by such Lender.
"ECF PERCENTAGE": 75%; PROVIDED that the ECF Percentage with
respect to any fiscal year of the U.S. Borrower shall be reduced to 50% if the
Consolidated Leverage Ratio as of the last day of such fiscal year is less than
2.75 to 1.0.
"ENVIRONMENTAL LAWS": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees or requirements of any
foreign, Federal, state, provincial, local, municipal or other Governmental
Authority, or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning protection
of human health or the environment, as have been now or may at any time
hereafter be in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 a.m.,
London time, two Business Days prior to the beginning of such Interest Period.
In the event that such rate does not appear on Page 3750 of the Telerate screen
(or otherwise on such screen), the "EURODOLLAR BASE RATE" shall be determined by
reference to
15
such other comparable publicly available service for displaying eurodollar
rates as may be selected by the relevant Administrative Agent or, in the
absence of such availability, by reference to the rate at which the relevant
Administrative Agent is offered Dollar deposits at or about 11:00 a.m.,
New
York City time or Toronto time, as applicable, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where
its eurodollar and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest Period for the
number of days comprised therein.
"EURODOLLAR LOANS": Loans the rate of interest applicable
to which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar
Loans under a particular Facility the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section
8, PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"EXCESS CASH FLOW": for any fiscal year of the U.S. Borrower,
the excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
and (iv) the aggregate net amount of non-cash loss on the Disposition of
property by the U.S. Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to the
extent deducted in arriving at such Consolidated Net Income OVER (b) the sum,
without duplication, of (i) the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the U.S. Borrower and its Subsidiaries in cash during such fiscal year
on account of Capital Expenditures that are not financed with long-term
Indebtedness permitted by Section 7.2(e) or with the proceeds of any
Reinvestment Deferred Amount, (iii) the aggregate amount of all prepayments of
Revolving Loans and Canadian Swingline Loans during such fiscal year to the
extent accompanying permanent optional reductions of the Revolving Commitments
and all optional prepayments of the Term Loans during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of Indebtedness
of the U.S. Borrower and its Subsidiaries (including scheduled principal
payments in respect of the Term Loans) made during such fiscal year (other than
principal payments under any revolving credit facility to the extent there is
not an equivalent permanent reduction in commitments thereunder), (v) increases
in Consolidated Working Capital for such fiscal year, (vi) the aggregate net
amount of non-cash gain on the Disposition of property (other than a Disposition
constituting an Asset Sale) by the U.S.
16
Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income and (vii) the aggregate net amount
of gain on property subject of an Asset Sale by the U.S. Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income.
"EXCESS CASH FLOW APPLICATION DATE": as defined in Section
2.18(d).
"EXCHANGE RATE": with respect to Dollars or Canadian Dollars
on any date, the rate at which Dollars may be exchanged into Canadian Dollars,
or Canadian Dollars may be exchanged into Dollars, as the case may be, as
determined in accordance with the Bank of Canada Noon Rate.
"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of those
Obligations that are payable by the U.S. Borrower, would, in the good faith
judgment of the U.S. Borrower, result in adverse tax consequences to the U.S.
Borrower.
"EXISTING CANADIAN SECURITIZATION": the receivables
securitization program pursuant to the Receivables Purchase and Sale
Agreement, dated as of April 1, 1997, as amended, among the Canadian
Borrower, as seller and collector, ASG Trust, as purchaser, TD Securities
Inc., as servicing agent, and The Toronto-Dominion Bank, as funding
guarantor, and all schedules, exhibits and annexes thereto and all agreements
affecting the terms thereof or entered into in connection therewith.
"EXISTING CREDIT FACILITIES": the credit facilities under
(a) the
Credit Agreement, dated as of October 24, 2000, as amended, among the
U.S. Borrower, various financial institutions from time to time party
thereto, Suntrust Bank, as syndication agent, U.S. Bank National Association,
as documentation agent, and Bank of America, N.A., as administrative agent
and letter of credit issuing lender, and all schedules, exhibits and annexes
thereto and all agreements affecting the terms thereof or entered into in
connection therewith and (b) the Amended and Restated
Credit Agreement, dated
as of November 17, 2000, as amended, among the Canadian Borrower, various
financial institutions from time to time party thereto and CIBC, as agent,
and all schedules, exhibits and annexes thereto and all agreements affecting
the terms thereof or entered into in connection therewith.
"EXISTING LETTER OF CREDIT": the irrevocable letter of
credit no. SYN-01-10026 in the original face amount of $2,880,000 issued by
CIBC, for the account of the U.S. Borrower, for the benefit of Reliance
National Indemnity Company.
"FACILITY": each of the U.S. Tranche A Term Facility, the
U.S. Tranche B Term Facility, the U.S. Revolving Facility, the Canadian Term
Facility, the Canadian Revolving Facility and the Canadian Swingline Facility.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve
17
Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for the day of such transactions
received by CIBC from three federal funds brokers of recognized standing
selected by it.
"FOREIGN SUBSIDIARY": any Subsidiary of the U.S. Borrower
that is not a Domestic Subsidiary.
"FOUNDATION": International Multifoods Charitable
Foundation, a charitable foundation organized under Section 501(c)(3) of the
Code.
"FTC": the United States Federal Trade Commission, and any
successor thereto.
"FUNDED DEBT": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrowers, Indebtedness in respect of the
Loans.
"FUNDING OFFICE": with respect to either Administrative Agent,
the office of such Administrative Agent specified in Section 10.2 or such other
office as may be specified from time to time by such Administrative Agent as its
funding office by written notice to the relevant Borrower and the relevant
Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, PROVIDED that if any change in GAAP
results in a change in the calculation of the financial covenants or
interpretation of related provisions of this Agreement or any other Loan
Document, then the Lenders, the Administrative Agents and the Borrowers agree to
negotiate in good faith to attempt to amend such provisions of this Agreement in
accordance with Section 10.1 so as to reflect equitably such changes in GAAP
with the desired result that the criteria for evaluating the Borrowers'
financial condition shall be the same after such change in GAAP as if such
change had not been made.
"GENERAL XXXXX": General Xxxxx, Inc., a Delaware
corporation.
"GOVERNMENTAL AUTHORITY": any nation or government, any state,
province or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"GROUP MEMBERS": the collective reference to the Borrowers
and their respective Subsidiaries.
"GUARANTEE AND COLLATERAL AGREEMENTS": the collective
reference to the U.S. Guarantee and Collateral Agreement and the Canadian
Collateral Agreement.
18
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of
which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY
OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of
any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guarantee Obligation is
made and (b) the maximum amount for which such guaranteeing person may be
liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof as
determined by the Borrowers in good faith.
"GUARANTORS": the U.S. Borrower, in its capacity as a
guarantor of the Obligations of the Canadian Borrower pursuant to the U.S.
Guarantee and Collateral Agreement, the U.S. Subsidiary Guarantors and the
Canadian Subsidiary Guarantors.
"HEDGE AGREEMENTS": all interest rate swaps, caps or collar
agreements or similar arrangements dealing with interest rates or currency
exchange rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business and other than any deferred purchase price payable under
the Acquisition Agreement), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements, (g) the liquidation
value of all redeemable preferred Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a)
19
through (h) above secured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of
such obligation, and (j) for the purposes of Sections 7.2 and 8(e) only, all
obligations of such Person in respect of Hedge Agreements. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person's ownership interest in
or other relationship with such entity, except to the extent the terms of
such Indebtedness expressly provide that such Person is not liable therefor.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, Canadian multinational or foreign laws or
otherwise, including copyrights, copyright licenses, copyright applications,
patents, patent licenses, patent applications, trademarks, trademark licenses,
trademark applications, service marks, service xxxx applications, trade secrets,
trade dress, confidential or proprietary information, inventions, data,
technology, know-how and processes, and all rights to xxx at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any U.S. Base
Rate Loan or C$ Prime Loan, the first Business Day following the last day of
each calendar quarter to occur while such Loan is outstanding, (c) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (d) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period and (e) as to any Loan (other than any Revolving Loan that is an
ABR Loan, U.S. Base Rate Loan or C$ Prime Loan and any Canadian Swingline Loan),
the date of any repayment or prepayment made in respect thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six or (if
consented to by all Lenders under the relevant Facility) twelve months
thereafter, as selected by the relevant Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one, two, three or
six or (if consented to by all Lenders under the relevant Facility) twelve
months thereafter, as selected by the relevant Borrower by irrevocable notice to
the relevant Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto; PROVIDED that
all of the foregoing provisions relating to Interest Periods are subject to the
following:
20
(i) if any Interest Period 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;
(ii) the Borrowers may not select an Interest Period under a
particular Facility that would extend beyond the Revolving Termination
Date or beyond the date final payment is due on the U.S. Tranche A Term
Loans, the U.S. Tranche B Term Loans or the Canadian Term Loans, as the
case may be;
(iii) any Interest Period 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 a calendar month; and
(iv) the Borrowers shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"INVESTMENTS": as defined in Section 7.8.
"ISSUING LENDERS": the collective reference to the U.S.
Issuing Lender and the Canadian Issuing Lender.
"L/C FEE PAYMENT DATE": the last day of each March, June,
September and December and the last day of the Revolving Commitment Period.
"L/C OBLIGATIONS": the collective reference to the U.S.
L/C Obligations and the Canadian L/C Obligations.
"LENDER ADDENDUM": with respect to any Lender which becomes a
party hereto on the date hereof, a Lender Addendum, substantially in the form of
Exhibit D, to be executed and delivered by such Lender on the date hereof as
provided in Section 10.16.
"LENDER AFFILIATE": (a) any Affiliate of any Lender, (b) any
Person that is administered or managed by any Lender and that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business and (c) with
respect to any Lender which is a fund that invests in commercial loans and
similar extensions of credit, any other fund that invests in commercial loans
and similar extensions of credit and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such Lender or
investment advisor.
"LENDERS": as defined in the preamble hereto; PROVIDED
that unless the context otherwise requires, each reference herein to the
Lenders shall be deemed to include any Conduit Lender.
"LETTERS OF CREDIT": the collective reference to the U.S.
Letters of Credit and the Canadian Letters of Credit.
21
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"LOAN": any loan or advance made by any Lender pursuant to
this Agreement, including without limitation, any advance made by way of the
acceptance by any Canadian Lender of a Draft.
"LOAN DOCUMENTS": this Agreement, the Security Documents
and the Notes.
"LOAN PARTIES": each Group Member that is a party to a
Loan Document.
"MAJORITY FACILITY LENDERS": with respect to any Facility,
the holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans, the Total Revolving Extensions of Credit or the Canadian
Swingline Extensions of Credit, as the case may be, outstanding under such
Facility (or, in the case of either Revolving Facility, prior to any
termination of such Revolving Commitments, the holders of more than 50% of
the Total Revolving Commitments under such Revolving Facility).
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, property, operations or condition (financial or otherwise) of the
U.S. Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agents or the Lenders hereunder or
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances of any kind, whether or
not any such substance is defined as hazardous or toxic under any Environmental
Law, that is regulated pursuant to or could give rise to liability under any
Environmental Law.
"MEDIUM TERM NOTES": the securities issued from time to
time under the Medium Term Notes Indenture.
"MEDIUM TERM NOTES INDENTURE": the Indenture, dated as of
January 1, 1990, between the U.S. Borrower and Xxxxxx Guaranty Trust Company of
New York, as trustee, and any supplemental indenture thereto, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"MOODY'S": Xxxxx'x Investors Service, Inc.
"MORTGAGED PROPERTIES": the collective reference to the
U.S. Mortgaged Properties, the Canadian Mortgaged Properties and the Quebec
Mortgaged Properties.
22
"MORTGAGES": the collective reference to the U.S.
Mortgages, the Canadian Mortgages and the Quebec Mortgages.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale
or any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
Asset Sale or Recovery Event, net of attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset
that is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and (b)
in connection with any issuance or sale of Capital Stock or any incurrence of
Indebtedness, the cash proceeds received from such issuance or incurrence,
net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.26(a).
"NON-U.S. LENDER": as defined in Section 2.26(d).
"NOTES": the collective reference to any promissory note
evidencing Loans.
"OBLIGATIONS": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to either Borrower, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrowers to either Administrative Agent or
to any Lender (or, in the case of Specified Hedge Agreements, any Lender
Affiliate or other counterparty thereto), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any other
Loan Document, the Letters of Credit, any Specified Hedge Agreement or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all fees, charges and disbursements of counsel to
either Administrative Agent or to any Lender that are required to be paid by the
Borrowers pursuant hereto) or otherwise.
"OTHER TAXES": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
23
"PARTICIPANT": as defined in Section 10.6(b).
"PAYMENT OFFICE": with respect to either Administrative Agent,
the office of such Administrative Agent specified in Section 10.2 or such other
office as may be specified from time to time by such Administrative Agent as its
funding office by written notice to the relevant Borrower and the relevant
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED CANADIAN REAL PROPERTY LIENS": any of: (a) Liens in
respect of reservations, limitations, provisos and conditions, if any, expressed
in any original grant from the Crown of any real property of the U.S. Borrower
or any Subsidiary thereof located in Canada of any interest therein that, in the
aggregate, are not substantial in amount and do not in any case detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the U.S. Borrower and its Subsidiaries, (b) Liens in
favor of a public utility or municipality or any public authority or
Governmental Authority which is required by such utility or other authority in
connection with the operation of the business, or the ownership of property, in
Canada of the U.S. Borrower or any Subsidiary thereof which Liens, in the
aggregate, are not substantial in amount and do not in any case detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the U.S. Borrower and its Subsidiaries, (c) servicing
agreements, development agreements, site plan agreements and other agreements
with Governmental Authorities with respect to the use or development of any of
property located in Canada of the U.S. Borrower or any Subsidiary thereof so
long as such agreements are complied with and which agreements, in the
aggregate, do not in any case detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
U.S. Borrower and its Subsidiaries, (d) applicable municipal and other
governmental restrictions, including municipal by-laws and regulations,
affecting the use of land located in Canada or the nature of any structures
which may be erected thereon so long as such restrictions are complied with and
which restrictions, in the aggregate, do not in any case detract from the value
of the property subject thereto or materially interfere with the ordinary
conduct of the business of the U.S. Borrower and its Subsidiaries, and (e)
rights reserved to or vested in any Governmental Authority of Canada or any
province thereof by any statutory provision or by their terms of any lease,
license, franchise, grant or permit of the U.S. Borrower or any Subsidiary
thereof, to terminate any such lease, license, franchise, grant or permit, or to
require annual or other payments as a condition to the continuance thereof that,
in the aggregate, do not materially interfere with the ordinary conduct of the
business of the U.S. Borrower and its Subsidiaries.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"PILLSBURY BUSINESSES": as defined in Section 5.1(c)(i).
"PLAN": at a particular time, any Single Employer Plan or
Multiemployer Plan in respect of which the U.S. Borrower or a Commonly
Controlled Entity is (or, if such plan were
24
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"PRICING GRID": (a) with respect to the Revolving Loans, the
Canadian Swingline Loans, the Tranche A Term Loans and the Commitment Fee Rate,
the pricing grid attached hereto as Annex A-1 and (b) with respect to the U.S.
Tranche B Term Loans, the pricing grid attached hereto as Annex A-2.
"PRIME RATE": the rate of interest per annum publicly
announced from time to time by CIBC as its prime rate in effect at its principal
office in
New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by CIBC in connection with extensions of credit to debtors).
"PRO FORMA BALANCE SHEET": as defined in Section 4.1(a).
"PRO FORMA STATEMENT OF OPERATIONS": as defined in Section
4.1(a).
"PROJECTIONS": as defined in Section 6.2(c).
"PROVISIONAL CONSENT DECREE": a provisional consent decree
entered into by General Xxxxx and Diageo plc with the FTC in connection with
obtaining regulatory approvals of the Acquisition (as defined in the Acquisition
Agreement) under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, providing for, among other things, the sale of certain assets in
accordance with, and in the manner contemplated by, the Acquisition Agreement.
"QUEBEC MORTGAGED PROPERTIES": the real properties listed and
identified as such on Part B of Schedule 1.1A which are located in the Province
of Quebec, as to which the Collateral Agent, for the benefit of the Canadian
Lenders, shall be granted a Lien pursuant to the Quebec Mortgages.
"QUEBEC MORTGAGES": the Quebec Security Documents only to
the extent they relate to the Quebec Mortgaged Properties.
"QUEBEC SECURITY DOCUMENTS": the collective reference to (a)
the Deed of Hypothec and Issue of Bonds to be executed and delivered by the
Canadian Borrower and each Canadian Subsidiary Guarantor that owns property
located in the Province of Quebec, Canada, together with the bond issued
pursuant thereto, (b) the Pledge of Bond to be executed and delivered by the
Canadian Borrower and each such Canadian Subsidiary Guarantor and (c) each such
other document executed and/or delivered in connection with either of the
foregoing, including without limitation, a delivery order and a receipt for such
bond, in the case of each of the foregoing contained clauses (a), (b) and (c),
in form and substance reasonably satisfactory to the Canadian Administrative
Agent, as the same, after the execution thereof, may be amended, supplemented or
otherwise modified from time to time
"RECOVERY EVENT": any settlement of or payment in respect
of any property or casualty insurance claim or any condemnation proceeding
relating to any asset of any Group Member.
25
"REFUNDING BANKERS' ACCEPTANCE": as defined in Section
2.11(d).
"REGISTER": as defined in Section 10.6(d).
"REGULATION U": Regulation U of the Board as in effect from
time to time.
"REIMBURSEMENT OBLIGATIONS": the collective reference to
the U.S. Reimbursement Obligations and the Canadian Reimbursement Obligations.
"REINVESTMENT DEFERRED AMOUNT": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Group Member
in connection therewith that are not applied to prepay the Term Loans or reduce
the Revolving Commitments pursuant to Section 2.18(c) as a result of the
delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in
respect of which a Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a
Responsible Officer of a Borrower stating that no Event of Default has occurred
and is continuing and that such Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair assets
useful in its business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire or
repair assets useful in the Borrowers' business.
"REINVESTMENT PREPAYMENT DATE": with respect to any
Reinvestment Event, the earlier of (a) the date occurring nine months after such
Reinvestment Event and (b) the date on which a Borrower shall have determined
not to, or shall have otherwise ceased to, acquire or repair assets useful in
such Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"REORGANIZATION": with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34, .35, .62, .63,
.64, .65 or .67 of PBGC Reg. SECTION 4043.
"REQUIRED LENDERS": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the sum of (i) the aggregate unpaid principal amount of the Term
Loans then outstanding, (ii) the Total Revolving Commitments then in effect or,
if the Revolving Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding and (iii) the Canadian Swingline
Commitment then in effect or, if the Canadian Swingline Commitment has been
terminated, the aggregate Canadian Swingline Extensions of Credit then
outstanding.
26
"REQUIREMENT OF LAW": 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 property or to which such Person or
any of its property is subject.
"RESCISSION EVENT": the withdrawal by the FTC of, or the
imposition by the FTC of conditions on, its final approval of the Provisional
Consent Decree resulting in the exercise by any party to the Acquisition
Agreement of its right to rescind the transactions consummated pursuant to the
Acquisition Agreement and to terminate the Acquisition Agreement.
"RESPONSIBLE OFFICER": the chief executive officer,
president or chief financial officer of a Borrower, but in any event, with
respect to financial matters, the chief financial officer and the vice
president and treasurer of such Borrower.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING COMMITMENT PERIOD": the period from and
including the Closing Date to the Revolving Termination Date.
"REVOLVING COMMITMENTS": as to any Lender, the collective
reference to the U.S. Revolving Commitments and the Canadian Revolving
Commitments of such Lender.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving
Lender at any time, the collective reference to the U.S Revolving Extensions
of Credit and the Canadian Revolving Loans of such Lender then outstanding.
"REVOLVING FACILITY": each of the U.S. Revolving Facility
and the Canadian Revolving Facility.
"REVOLVING LENDERS": the collective reference to the U.S.
Revolving Lenders and the Canadian Revolving Lenders.
"REVOLVING LOANS": the collective reference to the U.S.
Revolving Loans and the Canadian Revolving Loans.
"REVOLVING TERMINATION DATE": September 30, 2006.
"S&P": Standard and Poor's, a division of The XxXxxx-Xxxx
Companies.
"SEC": the Securities and Exchange Commission, any
successor thereto and any analogous Governmental Authority.
"SECURED PARTIES": as defined in the Guarantee and
Collateral Agreements.
"SECURITY DOCUMENTS": the collective reference to the U.S.
Guarantee and Collateral Agreement, the Canadian Collateral Agreement, the
Canadian Pledge Agreement, the Quebec Security Documents, the Mortgages and all
other security documents hereafter delivered
27
to either Administrative Agent granting a Lien on any property of any Person
to secure the obligations and liabilities of any Loan Party under any Loan
Document.
"SENIOR NOTE INDENTURE": an indenture to be entered into by
the U.S. Borrower in connection with the issuance of the Senior Notes which
contains the terms and conditions set forth in the draft thereof, previously
delivered on September 7, 2001 to the Administrative Agents, with such changes
therein as are not adverse to the U.S. Borrower or the Lenders or as shall be
approved in writing by the Administrative Agents, and is otherwise in form and
substance satisfactory to the Administrative Agents, together with all
instruments and other agreements entered into by the U.S. Borrower in connection
therewith, as the same, after the execution thereof, may be amended,
supplemented or otherwise modified from time to time in accordance with Section
7.9.
"SENIOR NOTES": senior unsecured notes of the U.S.
Borrower issued on the Closing Date pursuant to the Senior Note Indenture.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title
IV of ERISA, but that is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
and provincial laws governing determinations of the insolvency of debtors, (b)
the present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "DEBT" means
liability on a "claim", and (ii) "CLAIM" means any (x) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) 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 or
unmatured, disputed, undisputed, secured or unsecured.
"SPECIFIED CHANGE OF CONTROL": a "Change of Control" (or
any other defined term having a similar purpose) as defined in the Senior
Note Indenture or, as the case may be, the Bridge Facility Loan Agreement.
"SPECIFIED HEDGE AGREEMENT": (a) any Hedge Agreement (i)
entered into by a Borrower and any Lender or Lender Affiliate and (ii) that has
been designated by the relevant Lender and the relevant Borrower, by written
notice to the relevant Administrative Agent, as a Specified Hedge Agreement and
(b) the Bank of America Hedge Agreement (without giving effect to any extensions
thereof). Specified Hedge Agreements may be identified by reference to the
Borrower which is a party thereto, namely, a "U.S. Borrower Specified Hedge
Agreement" or a "Canadian Borrower Specified Hedge Agreement." The designation
of any Hedge Agreement
28
as a Specified Hedge Agreement shall not create in favor of such Lender,
Lender Affiliate or any other counterparty thereto any rights in connection
with the management or release of any Collateral or of the obligations of any
Loan Party under the Guarantee and Collateral Agreements.
"SUBSIDIARY": 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 (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the relevant Borrower.
"SUBSIDIARY GUARANTORS": the collective reference to the
U.S. Subsidiary Guarantors and the Canadian Subsidiary Guarantors.
"SYNDICATION AGENTS": as defined in the preamble hereto.
"SYNTHETIC PURCHASE AGREEMENT": any agreement pursuant to
which any Group Member is or may become obligated to make (a) any payment in
connection with the purchase by any third party from a Person other than a Group
Member of any Capital Stock of any Group Member or any Indebtedness referred to
in Section 7.9 or (b) any payment (except as otherwise expressly permitted by
Section 7.6 or 7.9) the amount of which is determined by reference to the price
or value at any time of any such Capital Stock or Indebtedness; PROVIDED that no
phantom stock or similar plan providing for payments only to current or former
directors, officers or employees of any Group Member (or to their heirs or
estates) shall be deemed to be a Synthetic Purchase Agreement.
"TERM LENDERS": the collective reference to the U.S. Term
Lenders and the Canadian Term Lenders.
"TERM LOANS": the collective reference to the U.S. Term
Loans and the Canadian Term Loans.
"TOLEDO FACILITY": the facility owned by General Xxxxx and
located at 0000 Xxxxxx Xxxx, Xxxxxx, Xxxx, and all improvements, facilities
and fixtures located thereon to be sold pursuant to the Acquisition Agreement.
"TOTAL CANADIAN REVOLVING COMMITMENTS": at any time, the
aggregate amount of the Canadian Revolving Commitments of the Canadian Revolving
Lenders then in effect. The original amount of the Total Canadian Revolving
Commitments is the excess of (a) the Canadian Dollar Equivalent of $25,000,000
on the Business Day prior to the Closing Date over (b) the Canadian Swingline
Commitment.
"TOTAL CANADIAN REVOLVING LOANS": at any time, the
aggregate amount of the Canadian Revolving Loans of all Canadian Revolving
Lenders outstanding at such time.
29
"TOTAL REVOLVING COMMITMENTS": at any time, the aggregate
amount of the Revolving Commitments of the Revolving Lenders then in effect.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the
collective reference to the Total U.S. Revolving Extensions of Credit
outstanding at such time and the Dollar Equivalent of the Total Canadian
Revolving Loans outstanding at such time.
"TOTAL U.S. REVOLVING COMMITMENTS": at any time, the
aggregate amount of the U.S. Revolving Commitments of all U.S. Revolving
Lenders then in effect. The original amount of the Total U.S. Revolving
Commitments is $75,000,000.
"TOTAL U.S. REVOLVING EXTENSIONS OF CREDIT": at any time,
the aggregate amount of the U.S. Revolving Extensions of Credit of all U.S.
Revolving Lenders outstanding at such time.
"TRANCHE A TERM LOANS": the collective reference to the
U.S. Tranche A Term Loans and the Canadian Term Loans.
"TRANSFEREE": any Assignee or Participant.
"TRANSITION SERVICES AGREEMENT": the Transition Services
Agreement to be entered into among General Xxxxx, and the U.S. Borrower on
substantially the terms and conditions set forth in the draft thereof dated
August 17, 2001, previously delivered to the Administrative Agents, with such
changes therein as are not adverse to the U.S. Borrower or the Lenders or as
shall be approved in writing by the Administrative Agents, as the same, after
the execution thereof, may be amended, supplemented or otherwise modified
from time to time in accordance with Section 7.16.
"TYPE": as to any Loan, its nature as an ABR Loan, a
Eurodollar Loan, a U.S. Base Rate Loan, a C$ Prime Loan or a Bankers'
Acceptance.
"UPDATED PRO FORMA BALANCE SHEET": as defined in Section
5.1(c)(iv)
"UPDATED PRO FORMA STATEMENT OF OPERATIONS": as defined in
Section 5.1(c)(iv).
"U.S. ADMINISTRATIVE AGENT": CIBC, together with its
affiliates, as the arranger of the U.S. Commitments and as the administrative
agent for the U.S. Lenders under this Agreement and the other Loan Documents,
together with any of its successors.
"U.S. BASE RATE": a fluctuating rate of interest per annum
which is equal at all times to the greater of: (a) the reference rate of
interest (however designated) of the Canadian Administrative Agent for
determining interest chargeable by it on U.S. Dollar commercial loans made in
Canada; and (b) 1.00% above the Federal Funds Effective Rate from time to
time in effect.
"U.S. BASE RATE LOANS": Loans the rate of interest
applicable to which is based upon the U.S. Base Rate.
30
"U.S. BORROWER": as defined in the preamble hereto.
"U.S. COMMITMENTS": as to any U.S. Lender, the sum of the
U.S. Tranche A Term Commitment, the U.S. Tranche B Term Commitment and the
U.S. Revolving Commitment of such Lender.
"U.S. GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee
and Collateral Agreement to be executed and delivered by each of the grantors
party thereto, substantially in the form of Exhibit A-1.
"U.S. ISSUING LENDER": CIBC, in its capacity as issuer of
any U.S. Letter of Credit.
"U.S. L/C COMMITMENT": $10,000,000.
"U.S. L/C OBLIGATIONS": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding U.S. Letters of Credit and (b) the aggregate amount of drawings
under U.S. Letters of Credit that have not then been reimbursed pursuant to
Section 3.5(a).
"U.S. L/C PARTICIPANTS": the collective reference to all
the U.S. Revolving Lenders other than the U.S. Issuing Lender.
"U.S. LENDERS": the collective reference to the U.S. Term
Lenders and the U.S. Revolving Lenders.
"U.S. LETTERS OF CREDIT": as defined in Section 3.1(a).
"U.S. LOANS": the collective reference to all Loans to the
U.S. Borrower.
"U.S. MORTGAGED PROPERTIES": the real properties listed
and identified as such on Part A of Schedule 1.1A, as to which the Collateral
Agent, for the benefit of the Lenders, shall be granted a Lien pursuant to
the U.S. Mortgages.
"U.S. MORTGAGES": each of the mortgages and deeds of trust
made by any Loan Party in favor of, or for the benefit of, the Collateral Agent,
for the benefit of the Lenders, substantially in the form of Exhibit E-1, in the
case of fee interests (with such changes thereto as shall be advisable under the
law of the jurisdiction in which such mortgage or deed of trust is to be
recorded), or in form and substance reasonably satisfactory to the U.S.
Administrative Agent, in the case of any leasehold interests in which a Lien may
in the future be created to secure the Obligations, as the same, after the
execution thereof, may be amended, supplemented or otherwise modified from time
to time.
"U.S. REIMBURSEMENT OBLIGATION": the obligation of the
U.S. Borrower to reimburse the U.S. Issuing Lender pursuant to Section 3.5(a)
for amounts drawn under U.S. Letters of Credit.
31
"U.S. REVOLVING COMMITMENT": as to any U.S. Lender, the
obligation of such Lender, if any, to make U.S. Revolving Loans and participate
in U.S. Letters of Credit in an aggregate principal and/or face amount not to
exceed the amount set forth opposite the heading "U.S. Revolving Commitment" on
Schedule 1 to the Lender Addendum delivered by such Lender or in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the same
may be changed from time to time pursuant to the terms hereof.
"U.S. REVOLVING EXTENSIONS OF CREDIT": as to any U.S.
Revolving Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all U.S. Revolving Loans held by such Lender then
outstanding and (b) such Lender's U.S. Revolving Percentage of the U.S. L/C
Obligations then outstanding.
"U.S. REVOLVING FACILITY": the U.S. Revolving Commitments
and the extensions of credit made thereunder.
"U.S. REVOLVING LENDERS": each U.S. Lender that has a U.S.
Revolving Commitment or that holds U.S. Revolving Loans.
"U.S. REVOLVING LOANS": as defined in Section 2.7.
"U.S. REVOLVING PERCENTAGE": as to any U.S. Revolving Lender
at any time, the percentage which such Lender's U.S. Revolving Commitment then
in effect constitutes of the Total U.S. Revolving Commitments then in effect or,
at any time after the U.S. Revolving Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
U.S. Revolving Loans then outstanding constitutes of the aggregate principal
amount of the U.S. Revolving Loans then outstanding, PROVIDED that, in the event
that the U.S. Revolving Loans are paid in full prior to the reduction to zero of
the Total U.S. Revolving Extensions of Credit, the U.S. Revolving Percentages
shall be determined in a manner designed to ensure that the other outstanding
U.S. Revolving Extensions of Credit shall be held by the U.S. Revolving Lenders
on a comparable basis.
"U.S. SUBSIDIARY GUARANTOR": each Subsidiary of the U.S.
Borrower other than any Excluded Foreign Subsidiary.
"U.S. TERM LENDERS": the collective reference to the U.S.
Tranche A Term Lenders and the U.S. Tranche B Term Lenders.
"U.S. TERM LOANS": the collective reference to the U.S.
Tranche A Term Loans and the U.S. Tranche B Term Loans.
"U.S. TRANCHE A TERM COMMITMENT": as to any U.S. Lender, the
obligation of such Lender, if any, to make a U.S. Tranche A Term Loan to the
U.S. Borrower in a principal amount not to exceed the amount set forth opposite
the heading "U.S. Tranche A Term Commitment" on Schedule 1 to the Lender
Addendum delivered by such Lender. The original aggregate amount of the U.S.
Tranche A Term Commitments is $90,000,000 minus the aggregate amount, if any, of
the Medium Term Notes outstanding on the Closing Date (unless such outstanding
amount is equal to or less than $5,000,000, in which case no such reduction in
the U.S. Tranche A Term Commitment shall be made).
32
"U.S. TRANCHE A TERM FACILITY": the Tranche A Term
Commitments and the Tranche A Term Loans made thereunder.
"U.S. TRANCHE A TERM LENDER": each U.S. Lender that has a
U.S. Tranche A Term Commitment or that holds a U.S. Tranche A Term Loan.
"U.S. TRANCHE A TERM LOAN": as defined in Section 2.1.
"U.S. TRANCHE A TERM PERCENTAGE": as to any U.S. Tranche A
Term Lender at any time, the percentage which such Lender's U.S. Tranche A Term
Commitment then in effect constitutes of the aggregate U.S. Tranche A Term
Commitments then in effect or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's U.S. Tranche A
Term Loans then outstanding constitutes of the aggregate principal amount of the
U.S. Tranche A Term Loans then outstanding.
"U.S. TRANCHE B TERM COMMITMENT": as to any U.S. Lender,
the obligation of such Lender, if any, to make a U.S. Tranche B Term Loan to
the U.S. Borrower in a principal amount not to exceed the amount set forth
opposite the heading "U.S. Tranche B Term Commitment" on Schedule 1 to the
Lender Addendum delivered by such Lender. The original aggregate amount of
the U.S. Tranche B Term Commitments is $200,000,000.
"U.S. TRANCHE B TERM FACILITY": the Tranche B Term
Commitments and the Tranche B Term Loans made thereunder.
"U.S. TRANCHE B TERM LENDER": each Lender that has a
Tranche B Term Commitment or that holds a Tranche B Term Loan.
"U.S. TRANCHE B TERM LOAN": as defined in Section 2.1.
"U.S. TRANCHE B TERM PERCENTAGE": as to any U.S. Tranche B
Lender at any time, the percentage which such Lender's U.S. Tranche B Term
Commitment then in effect constitutes of the aggregate U.S. Tranche B Term
Commitments then in effect or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's U.S. Tranche
B Term Loans then outstanding constitutes of the aggregate principal amount
of the U.S. Tranche B Term Loans then outstanding.
"U.S. WHOLLY OWNED SUBSIDIARY GUARANTOR": any U.S.
Subsidiary Guarantor that is a Wholly Owned Subsidiary of the U.S. Borrower.
"UNITED STATES": the United States of America.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other
Person all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
"WHOLLY OWNED SUBSIDIARY GUARANTOR": any Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the U.S. Borrower.
33
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to any Group Member not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation", (iii) the word "incur" shall be
construed to mean incur, create, issue, assume or become liable in respect of
(and the words "incurred" and "incurrence" shall have correlative meanings),
(iv) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v) references to
agreements or other Contractual Obligations shall, unless otherwise
specified, be deemed to refer to such agreements or Contractual Obligations
as amended, supplemented, restated or otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import, when used in this Agreement, shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 U.S. TERM COMMITMENTS. Subject to the terms and
conditions hereof, (a) each U.S. Tranche A Term Lender severally agrees to
make a term loan (a "U.S. TRANCHE A TERM LOAN") to the U.S. Borrower on the
Closing Date in an amount not to exceed the amount of the U.S. Tranche A Term
Commitment of such Lender and (b) each U.S. Tranche B Term Lender severally
agrees to make a term loan (a "U.S. TRANCHE B TERM LOAN") to the U.S.
Borrower in Dollars on the Closing Date in an amount not to exceed the amount
of the U.S. Tranche B Term Commitment of such Lender. The U.S. Term Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the U.S.
Borrower and notified to the U.S. Administrative Agent in accordance with
Sections 2.2 and 2.19.
2.2 PROCEDURE FOR U.S. TERM LOAN BORROWING. The U.S.
Borrower shall give the U.S. Administrative Agent irrevocable notice (which
notice must be received by the U.S. Administrative Agent prior to 10:00 a.m.,
New York City time, one Business Day prior to the anticipated Closing Date)
requesting that the U.S. Term Lenders make the U.S. Term Loans on the Closing
Date and specifying the amount to be borrowed. The U.S. Term Loans made on
the Closing Date shall initially be ABR Loans and, unless otherwise agreed by
the U.S. Administrative Agent in its sole discretion, no U.S. Tranche B Term
Loan may be converted into or continued as a Eurodollar Loan prior to the
date that is 5 Business Days after the Closing Date and the initial Interest
Period for U.S. Tranche B Term Loans which are Eurodollar Loans shall
34
be one month. Upon receipt of such notice, the U.S. Administrative Agent
shall promptly notify each U.S. Term Lender thereof. Not later than 12:00
noon,
New York City time, on the Closing Date each U.S. Term Lender shall
make available to the U.S. Administrative Agent at its Funding Office an
amount in immediately available funds equal to the U.S. Term Loan or U.S.
Term Loans to be made by such Lender. The U.S. Administrative Agent shall
make available to the U.S. Borrower, in accordance with instructions received
from it by the U.S. Administrative Agent, the aggregate of the amounts made
available to the U.S. Administrative Agent by the U.S. Term Lenders in
immediately available funds.
2.3 REPAYMENT OF U.S. TERM LOANS. (a) The U.S. Tranche A Term
Loan of each U.S. Tranche A Lender shall mature in ten consecutive installments,
payable on the last day of each of the fiscal quarters of the U.S. Borrower
ending on or about the dates set forth below and on September 30, 2006, each of
which shall be in an amount equal to such Lender's U.S. Tranche A Term
Percentage multiplied by the amount set forth below opposite such date:
------------------------------------- ---------------------------
DATE PRINCIPAL AMOUNT
------------------------------------- ---------------------------
February 28, 2002 $6,000,000
------------------------------------- ---------------------------
August 31, 2002 $6,000,000
------------------------------------- ---------------------------
February 28, 2003 $7,500,000
------------------------------------- ---------------------------
August 31, 2003 $7,500,000
------------------------------------- ---------------------------
February 28, 2004 $10,500,000
------------------------------------- ---------------------------
August 31, 2004 $10,500,000
------------------------------------- ---------------------------
February 28, 2005 $10,500,000
------------------------------------- ---------------------------
August 31, 2005 $10,500,000
------------------------------------- ---------------------------
February 28, 2006 $10,500,000
------------------------------------- ---------------------------
September 30, 2006 $10,500,000
------------------------------------- ---------------------------
PROVIDED, HOWEVER, that if the aggregate amount of the Medium Term Notes not
repaid on or before the Closing Date exceeds $5,000,000, the aggregate amount of
the installments of the U.S. Tranche A Term Loans set forth above shall be
reduced by the aggregate amount of such unpaid Medium Term Notes, with the
application of such reductions being determined with respect to each Medium Term
Note outstanding on the Closing Date (considered chronologically according to
the respective maturity dates thereof) as follows: (a) an amount equal to 50% of
the amount payable at the maturity of such unpaid Medium Term Note shall, FIRST,
reduce the installment that is due immediately prior to the maturity date of
such Medium Term Note (to the extent such installment exists and has not
previously been eliminated pursuant to this proviso) and, SECOND, reduce the
installments immediately following the installment reduced pursuant to the
foregoing clause FIRST (to the extent such installments have not previously been
eliminated pursuant to this proviso) in the direct order of their stated
maturity and (b) an amount equal to 50% of the amount payable at the maturity of
such unpaid Medium Term Note shall reduce the installments that are due
immediately succeeding the maturity date of such Medium Term Note (to the extent
such installments have not previously been eliminated pursuant to this proviso).
If necessary, the U.S. Borrower and the U.S. Administrative Agent will, as soon
as practicable following the Closing Date, establish a revised schedule for the
amortization of the U.S. Tranche
35
A Term Loans in accordance with the proviso to the preceding sentence and
deliver a copy of such revised schedule to the Lenders.
(b) The U.S. Tranche B Term Loan of each U.S. Tranche B
Lender shall mature in thirteen consecutive semi-annual installments, payable
on the last day of each of the fiscal quarters of the U.S. Borrower ending on
or about the dates set forth below, each of which shall be in an amount equal
to such Lender's U.S. Tranche B Term Percentage multiplied by the amount set
forth below opposite such installment:
------------------------------------- ---------------------------
DATE PRINCIPAL AMOUNT
------------------------------------- ---------------------------
February 28, 2002 $1,000,000
------------------------------------- ---------------------------
August 31, 2002 $1,000,000
------------------------------------- ---------------------------
February 28, 2003 $1,000,000
------------------------------------- ---------------------------
August 31, 2003 $1,000,000
------------------------------------- ---------------------------
February 28, 2004 $1,000,000
------------------------------------- ---------------------------
August 31, 2004 $1,000,000
------------------------------------- ---------------------------
February 28, 2005 $1,000,000
------------------------------------- ---------------------------
August 31, 2005 $1,000,000
------------------------------------- ---------------------------
February 28, 2006 $1,000,000
------------------------------------- ---------------------------
August 31, 2006 $1,000,000
------------------------------------- ---------------------------
February 28, 2007 $63,333,333
------------------------------------- ---------------------------
August 31, 2007 $63,333,333
------------------------------------- ---------------------------
February 28, 2008 $63,333,334
------------------------------------- ---------------------------
2.4 CANADIAN TERM COMMITMENTS. Subject to the terms and
conditions hereof, (a) each Canadian Term Lender severally agrees to make a term
loan to, and accept Drafts from, the Canadian Borrower (such loan and
acceptances of Drafts, a "CANADIAN TERM LOAN") on the Closing Date in an amount
not to exceed the amount of the Canadian Term Commitment of such Lender. The
Canadian Term Loans may (a) be denominated in Dollars or in Canadian Dollars as
determined by the Canadian Borrower and notified to the Canadian Administrative
Agent in accordance with Section 2.5 and (b) from time to time be (i) Eurodollar
Loans, in the case of such Loans denominated in Dollars, (ii) U.S. Base Rate
Loans, in the case of such Loans denominated in Dollars, (iii) C$ Prime Loans,
in the case of such Loans denominated in Canadian Dollars, or (iv) Bankers'
Acceptances, in the case of such Loans denominated in Canadian Dollars, as
determined by the Canadian Borrower and notified to the Canadian Administrative
Agent in accordance with Sections 2.5, 2.11 and 2.19.
2.5 PROCEDURE FOR CANADIAN TERM LOAN BORROWING. The Canadian
Borrower shall give the Canadian Administrative Agent irrevocable notice (which
notice must be received by the Canadian Administrative Agent prior to 10:00
a.m., Toronto time, one Business Day prior to the anticipated Closing Date)
requesting that the Canadian Term Lenders make the Canadian Term Loans on the
Closing Date and specifying the amount to be borrowed. The Canadian Term Loans
made on the Closing Date shall initially be U.S. Base Rate Loans, if such Loans
are
36
requested to be made in Dollars, or C$ Prime Loans, if such Loans are
requested to be made in Canadian Dollars. Upon receipt of such notice the
Canadian Administrative Agent shall promptly notify each Canadian Term Lender
thereof. Not later than 12:00 noon, Toronto time, on the Closing Date each
Canadian Term Lender shall make available to the Canadian Administrative Agent
at its Funding Office an amount in immediately available funds equal to the
Canadian Term Loan to be made by such Lender. The Canadian Administrative Agent
shall credit the account of the Canadian Borrower on the books of such office of
the Canadian Administrative Agent with the aggregate of the amounts made
available to the Canadian Administrative Agent by the Canadian Term Lenders in
immediately available funds. The Canadian Borrower may request that if the
Canadian Term Loans are made available in Canadian Dollars, such Loans may be
made by way of Bankers' Acceptances in accordance with and pursuant to the
procedures set forth in Section 2.11.
2.6 REPAYMENT OF CANADIAN TERM LOANS. The Canadian Term Loan
of each Canadian Term Lender shall mature in ten consecutive installments,
payable on the last day of each of the fiscal quarters of the U.S. Borrower
ending on or about the dates set forth below and on September 30, 2006, each of
which shall be in an amount equal to such Lender's Canadian Term Percentage
multiplied by the percentage set forth below opposite such installment
multiplied by the original amount of the aggregate Canadian Term Loan
Commitments:
------------------------------------- ---------------------------
DATE PERCENTAGE
------------------------------------- ---------------------------
February 28, 2002 6 2/3%
------------------------------------- ---------------------------
August 31, 2002 6 2/3%
------------------------------------- ---------------------------
February 28, 2003 8 1/3%
------------------------------------- ---------------------------
August 31, 2003 8 1/3%
------------------------------------- ---------------------------
February 28, 2004 11 2/3%
------------------------------------- ---------------------------
August 31, 2004 11 2/3%
------------------------------------- ---------------------------
February 28, 2005 11 2/3%
------------------------------------- ---------------------------
August 31, 2005 11 2/3%
------------------------------------- ---------------------------
February 28, 2006 11 2/3%
------------------------------------- ---------------------------
September 30, 2006 11 2/3%
------------------------------------- ---------------------------
2.7 U.S. REVOLVING COMMITMENTS. (a) Subject to the terms
and conditions hereof, each U.S. Revolving Lender severally agrees to make
revolving credit loans ("U.S. REVOLVING LOANS") to the U.S. Borrower from
time to time during the Revolving Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's U.S.
Revolving Percentage of the U.S. L/C Obligations then outstanding, does not
exceed the amount of such Lender's U.S. Revolving Commitment. During the
Revolving Commitment Period the U.S. Borrower may use the U.S. Revolving
Commitments by borrowing, prepaying the U.S. Revolving Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions
hereof. The U.S. Revolving Loans may from time to time be Eurodollar Loans or
ABR Loans, as determined by the U.S. Borrower and notified to the U.S.
Administrative Agent in accordance with Sections 2.8 and 2.19.
37
(b) The U.S. Borrower shall repay all outstanding U.S.
Revolving Loans on the Revolving Termination Date.
2.8 PROCEDURE FOR U.S. REVOLVING LOAN BORROWING. The U.S.
Borrower may borrow under the U.S. Revolving Commitments during the Revolving
Commitment Period on any Business Day, PROVIDED that the U.S. Borrower shall
give the U.S. Administrative Agent irrevocable notice (which notice must be
received by the U.S. Administrative Agent prior to 12:00 noon,
New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Loans, or (b) on the requested Borrowing Date, in the case
of ABR Loans), specifying (i) the amount and Type of U.S. Revolving Loans to
be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor. Any U.S.
Revolving Loans made on the Closing Date shall initially be ABR Loans. Each
borrowing under the U.S. Revolving Commitments shall be in an amount equal to
$1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then
aggregate Available U.S. Revolving Commitments are less than $1,000,000, such
lesser amount). Upon receipt of any such notice from the U.S. Borrower, the
U.S. Administrative Agent shall promptly notify each U.S. Revolving Lender
thereof and in no event later than 2:00 p.m.,
New York City time, in the case
of ABR Loans. Each U.S. Revolving Lender will make the amount of its PRO RATA
share of each borrowing available to the U.S. Administrative Agent for the
account of the U.S. Borrower at the Funding Office of the U.S. Administrative
Agent prior to 3:00 p.m.,
New York City time, on the Borrowing Date requested
by the U.S. Borrower in funds immediately available to the U.S.
Administrative Agent. Such borrowing will then be made available to the U.S.
Borrower by the U.S. Administrative Agent making available to the U.S.
Borrower, in accordance with instructions received from it by the U.S.
Administrative Agent, the aggregate of the amounts made available to the U.S.
Administrative Agent by the U.S. Revolving Lenders and in like funds as
received by the U.S. Administrative Agent.
2.9 CANADIAN REVOLVING COMMITMENTS. (a) Subject to the
terms and conditions hereof, each Canadian Revolving Lender severally agrees
to make revolving credit loans to, and accept Drafts from, the Canadian
Borrower (such loans and acceptances of Drafts, the "CANADIAN REVOLVING
LOANS") from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which does not exceed
the amount of such Lender's Canadian Revolving Commitment. During the
Revolving Commitment Period the Canadian Borrower may use the Canadian
Revolving Commitments by borrowing, prepaying the Canadian Revolving Loans in
whole or in part, and reborrowing, and by requesting the Canadian Revolving
Lenders to accept Drafts, all in accordance with the terms and conditions
hereof. The Canadian Revolving Loans may (a) be denominated in Dollars or
Canadian Dollars as determined by the Canadian Borrower and notified to the
Canadian Administrative Agent in accordance with Section 2.10 and (b) from
time to time be (i) Eurodollar Loans, in the case of such Loans denominated
in Dollars, (ii) U.S. Base Rate Loans, in the case of such Loans denominated
in Dollars, (iii) C$ Prime Loans, in the case of such Loans denominated in
Canadian Dollars, or (iv) Bankers' Acceptances, in the case of such Loans
denominated in Canadian Dollars; in each case as determined by the Canadian
Borrower and notified to the Canadian Administrative Agent in accordance with
Sections 2.10, 2.11 and 2.19.
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(b) The Canadian Borrower shall repay all outstanding
Canadian Revolving Loans on the Revolving Termination Date.
2.10 PROCEDURE FOR CANADIAN REVOLVING LOAN BORROWING. The
Canadian Borrower may borrow under the Canadian Revolving Commitments during
the Revolving Commitment Period on any Business Day, PROVIDED that the
Canadian Borrower shall give the Canadian Administrative Agent irrevocable
notice (which notice must be received by the Canadian Administrative Agent
prior to 12:00 noon, Toronto time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, (b) two Business
Days prior to the requested Borrowing Date, in the case of Bankers'
Acceptances or (c) one Business Day prior to the requested Borrowing Date, in
the case of C$ Prime Loans and U.S. Base Rate Loans), specifying (i) the
amount and Type of Canadian Revolving Loans to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans and
Bankers' Acceptances, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Period therefor. Any Canadian
Revolving Loans made on the Closing Date shall initially be U.S. Base Rate
Loans, if such Loans are requested to be made in Dollars, or C$ Prime Loans,
if such Loans are requested to be made in Canadian Dollars. Each borrowing
under the Canadian Revolving Commitments shall be in an amount equal to
$1,000,000 (or the Canadian Dollar Equivalent thereof) or a whole multiple of
$100,000 (or the Canadian Dollar Equivalent thereof) in excess thereof (or,
if the then aggregate Available Canadian Revolving Commitments are less than
$1,000,000 (or the Canadian Dollar Equivalent thereof), such lesser amount).
Upon receipt of any such notice from the Canadian Borrower, the Canadian
Administrative Agent shall promptly notify each Canadian Revolving Lender
thereof. Each Canadian Revolving Lender will make the amount of its PRO RATA
share of each borrowing available to the Canadian Administrative Agent for
the account of the Canadian Borrower at its Funding Office prior to 2:00
p.m., Toronto time, on the Borrowing Date requested by the Canadian Borrower
in funds immediately available to the Canadian Administrative Agent. Such
borrowing will then be made available to the Canadian Borrower by the
Canadian Administrative Agent crediting the account of the Canadian Borrower
on the books of the Canadian Lending Office with the aggregate of the amounts
made available to the Canadian Administrative Agent by the Canadian Revolving
Lenders and in like funds as received by the Canadian Administrative Agent.
The Canadian Borrower may make Bankers' Acceptance borrowings during the
Revolving Credit Commitment Period on any Business Day, in accordance with
and pursuant to the procedures set forth in Section 2.11.
2.11 BANKERS' ACCEPTANCES. (a) DRAFTS. The Canadian
Borrower may (i) issue Drafts denominated in Canadian Dollars for acceptance
by the Canadian Lenders and (ii) at its option, require that Bankers'
Acceptances denominated in Canadian Dollars be purchased by the Canadian
Lenders.
(b) PROCEDURES.
(i) NOTICE. The Canadian Borrower shall notify the
Canadian Administrative Agent by irrevocable written or telephonic
notice (in the case of telephonic notice, to be promptly confirmed in
writing) by 12:00 noon, Toronto time, two Business Days prior to the
Borrowing Date in respect of any borrowing by way of Bankers'
Acceptances.
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(ii) MINIMUM BORROWING AMOUNT. Each borrowing by way of
Bankers' Acceptances shall be in a minimum aggregate face amount of
C$3,000,000 or a whole multiple of C$100,000 in excess thereof.
(iii) FACE AMOUNTS. The face amount of each Bankers'
Acceptance shall be C$100,000 or any whole multiple thereof.
(iv) TERM. Bankers' Acceptances shall be issued and shall
mature on a Business Day. Each Bankers' Acceptance shall have a term of
30, 60, 90 or 120 days (or such shorter or longer term as shall be
agreed to by all of the Canadian Lenders under the relevant Facility),
shall mature on or before the Revolving Credit Termination Date or the
final maturity date of the Canadian Term Loans, as the case may be, and
shall be in form and substance reasonably satisfactory to each relevant
Canadian Lender. The Canadian Borrower shall select terms for Bankers'
Acceptances so as not to require a payment or prepayment of any
Bankers' Acceptance during a term for such Bankers' Acceptance.
(v) BANKERS' ACCEPTANCES IN BLANK. To facilitate the
acceptance of Drafts under this Agreement, the Canadian Borrower shall,
from time to time as required, provide to the Canadian Lenders Drafts
duly executed and endorsed in blank by the Canadian Borrower in
quantities sufficient for each Canadian Lender to fulfill its
obligations hereunder. Each Canadian Lender is hereby authorized to
accept such Drafts endorsed in blank in such face amounts as may be
determined by such Canadian Lender in accordance with the terms of this
Agreement, PROVIDED that the aggregate amount thereof is less than or
equal to the aggregate amount of Bankers' Acceptances required to be
accepted by such Canadian Lender. No Canadian Lender shall be
responsible or liable for its failure to accept a Draft if the cause of
such failure is, in whole or in part, due to the failure of the
Canadian Borrower to provide duly executed and endorsed Drafts to such
Canadian Lender on a timely basis, nor shall any Canadian Lender be
liable for any damage, loss or other claim arising by reason of any
loss or improper use of any such instrument except loss or improper use
arising by reason of the gross negligence or willful misconduct of such
Canadian Lender, its officers, employees, agents or representatives.
Each Canadian Lender shall exercise such care in the custody and
safekeeping of Drafts as it would exercise in the custody and
safekeeping of similar property owned by it. Each Canadian Lender will,
upon the request of the Canadian Borrower, promptly advise the Canadian
Borrower of the number and designation, if any, of Drafts then held by
it for the Canadian Borrower. Each Canadian Lender shall maintain a
record with respect to Drafts and Bankers' Acceptances (A) received by
it from the Canadian Borrower in blank hereunder, (B) voided by it for
any reason, (C) accepted by it hereunder, (D) purchased by it hereunder
and (E) canceled at their respective maturities. Each Canadian Lender
further agrees to retain such records in the manner and for the
statutory periods provided in the various Canadian provincial or
federal statutes and regulations which apply to such Canadian Lender.
(vi) EXECUTION OF BANKERS' ACCEPTANCES. Drafts of the
Canadian Borrower to be accepted as Bankers' Acceptances hereunder
shall be duly executed on behalf of the Canadian Borrower. The Canadian
Borrower hereby appoints each Canadian Lender as its attorney to sign
and endorse on its behalf (in accordance with a borrowing notice
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relating to an advance by way of Bankers' Acceptances), in handwriting
or by facsimile or mechanical signature as and when deemed necessary by
such Canadian Lender, Drafts in the form requested by such Canadian
Lender. In this respect, it is each Canadian Lender's responsibility to
maintain an adequate supply of Drafts for acceptance under this
Agreement. All Drafts signed and/or endorsed by a Canadian Lender on
behalf of the Canadian Borrower shall bind the Canadian Borrower as
fully and effectually as if signed in the handwriting of and duly
issued by the proper signing officers of the Canadian Borrower. Each
Canadian Lender is hereby authorized (in accordance with a borrowing
notice relating to an advance by way of Bankers' Acceptances) to issue
such Drafts endorsed in blank in such face amounts as may be determined
by such Canadian Lender; PROVIDED that the aggregate amount thereof is
equal to the aggregate amount of Drafts required to be accepted and
purchased by such Canadian Lender. No Canadian Lender shall be liable
for any damage, loss or other claim arising by reason of any loss or
improper use of any such instrument except to the extent such damage,
loss or other claim is determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the fraud,
gross negligence or willful misconduct of the Canadian Lender or its
officers, employees, agents or representatives. Each Canadian Lender
shall maintain a record with respect to Drafts (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. On request by or on behalf of the Canadian Borrower, a
Canadian Lender shall cancel all forms of Drafts which have been
pre-signed or pre-endorsed on behalf of the Canadian Borrower and which
are held by such Canadian Lender and are not required to be issued in
accordance with the Canadian Borrower's irrevocable notice.
Notwithstanding that any person whose signature appears on any Draft or
Bankers' Acceptance may no longer be an authorized signatory for any
Canadian Lender or the Canadian Borrower at the date of issuance of a
Draft or Bankers' Acceptance, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained
in force at the time of such issuance and any such Draft or Bankers'
Acceptance so signed shall be binding on the Canadian Borrower.
(vii) ISSUANCE OF BANKERS' ACCEPTANCES. Promptly following
receipt of a notice of borrowing by way of Bankers' Acceptances, the
Canadian Administrative Agent shall so advise the Canadian Lenders and
shall advise each Canadian Lender of the face amount of each Draft to
be accepted by it and the term thereof. The aggregate face amount of
Drafts to be accepted by a Canadian Lender shall be determined by the
Canadian Administrative Agent on a PRO RATA basis by reference to the
respective Canadian Revolving Credit Commitments and Canadian Term
Loans, as the case may be, of the Canadian Lenders, except that, if the
face amount of a Bankers' Acceptance, which would otherwise be accepted
by a Canadian Lender, would not be C$100,000 or a whole multiple
thereof, such face amount shall be increased or reduced by the Canadian
Administrative Agent in its sole and unfettered discretion to the
nearest whole multiple of C$100,000.
(viii) ACCEPTANCE OF BANKERS' ACCEPTANCES. Each Draft to
be accepted by a Canadian Lender shall be accepted at the Canadian
Lending Office of such Canadian Lender.
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(ix) PURCHASE OF BANKERS' ACCEPTANCES. If the Canadian
Borrower exercises its option pursuant to Section 2.11(a)(ii), each
Canadian Lender shall be required to purchase (subject to Section 2.12)
from the Canadian Borrower on such Borrowing Date, at the Applicable BA
Discount Rate, the Bankers' Acceptances accepted by it on such
Borrowing Date and to provide to the Canadian Administrative Agent the
BA Discount Proceeds thereof (net of the applicable Acceptance Fee as
determined under Section 2.11(e)) not later than 2:00 p.m., Toronto
time, on such Borrowing Date for the account of the Canadian Borrower.
Not later than 3:00 p.m., Toronto time, on such Borrowing Date, the
Canadian Administrative Agent shall make such BA Discount Proceeds (net
of the applicable Acceptance Fee) available to the Canadian Borrower by
crediting the account of the Canadian Borrower on the books of its
Canadian Lending Office with the aggregate of the amounts made
available to the Canadian Administrative Agent by the Canadian Lenders
and in like funds as received by the Canadian Administrative Agent.
(x) SALE OF BANKERS' ACCEPTANCES. Each Canadian Lender may
at any time and from time to time purchase, hold, sell, rediscount or
otherwise dispose of any or all Bankers' Acceptances accepted and
purchased by it, and no such dealing shall prejudice or impair the
Canadian Borrower's obligations under Section 2.11(c).
(xi) WAIVER OF PRESENTMENT AND OTHER CONDITIONS. The
Canadian Borrower waives demand, presentment for payment, protest,
noting of protest, dishonor, noting of dishonor and any other defense
to payment of any amounts due to a Canadian Lender in respect of a
Bankers' Acceptance accepted by such Canadian Lender pursuant to this
Agreement, including merger, which might exist solely by reason of such
Bankers' Acceptance being held, at the maturity thereof, by such
Canadian Lender in its own right, and the Canadian Borrower agrees not
to claim any days of grace if such Canadian Lender as holder sues the
Canadian Borrower on the Bankers' Acceptances for payment of the amount
payable by the Canadian Borrower thereunder.
(c) The Canadian Borrower shall reimburse a Canadian Lender
for, and there shall become due and payable at 10:00 a.m., Toronto time, on the
contract maturity date for each Bankers' Acceptance, an amount in Canadian
Dollars in same day funds equal to the full face amount of such Bankers'
Acceptance. The Canadian Borrower shall make each such reimbursement payment (i)
by causing any proceeds of a Refunding Bankers' Acceptance issued in accordance
with Section 2.11(d) or conversion of such Bankers' Acceptance in accordance
with Section 2.19(c) to be applied in reduction of such reimbursement payment
and (ii) by depositing the amount of such reimbursement payment (or any portion
thereof remaining unpaid after application of any proceeds referred to in clause
(i)) to the relevant payment account. The Canadian Borrower's payment in
accordance with this Section shall satisfy its obligations under any Bankers'
Acceptance to which it relates, and the Canadian Lender which has accepted such
Bankers' Acceptance shall thereafter be solely responsible for the payment of
such Bankers' Acceptance.
(d) The Canadian Borrower shall give irrevocable written or
telephonic notice (in the case of telephonic notice, to be promptly confirmed in
writing) (or such other method of notification as may be agreed upon between the
Canadian Administrative Agent and the Canadian Borrower) to the Canadian
Administrative Agent prior to 12:00 noon, Toronto time,
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two Business Days prior to the maturity date of each Bankers' Acceptance of
the Canadian Borrower's intention to issue a Bankers' Acceptance on such
maturity date (a "REFUNDING BANKERS' ACCEPTANCE") to provide for the payment
of such maturing Bankers' Acceptance (it being understood that payments by
the Canadian Borrower and fundings by the Canadian Lenders in respect of each
maturing Bankers' Acceptance and the related Refunding Bankers' Acceptance
shall be made on a net basis reflecting the difference between the face
amount of such maturing Bankers' Acceptance and the BA Discount Proceeds (net
of the applicable Acceptance Fee) of such Refunding Bankers' Acceptance). If
the Canadian Borrower fails to give such notice or does not have sufficient
funds on deposit in the amount of the reimbursement payment in accordance
with Section 2.11(c), the Canadian Borrower shall be deemed to have requested
that such maturing Bankers' Acceptances be repaid with the proceeds of C$
Prime Loans (without any requirement to give notice with respect thereto),
commencing on the maturity date of such maturing Bankers' Acceptances.
(e) An Acceptance Fee shall be payable by the Canadian
Borrower to each Canadian Lender in advance (in the manner specified in Section
2.11(b)(ix)) upon the issuance of a Bankers' Acceptance to be accepted by such
Canadian Lender calculated at the rate per annum equal to the Applicable Margin,
such Acceptance Fee to be calculated on the face amount of such Bankers'
Acceptance and to be computed on the basis of the number of days in the term of
such Bankers' Acceptance.
(f) Upon the occurrence of any Default or Event of Default
which is continuing, and in addition to any other rights or remedies of any
Canadian Lender and the Canadian Administrative Agent hereunder, any Canadian
Lender or the Canadian Administrative Agent (or such alternate arrangement as
may be agreed upon by the Canadian Borrower and such Canadian Lender or the
Canadian Administrative Agent, as applicable) shall be entitled to deposit and
retain in an account to be maintained by the Canadian Administrative Agent
(bearing interest at the Canadian Administrative Agent's rates as may be
applicable in respect of other deposits of similar amounts for similar terms),
for the ratable benefit of the Canadian Lenders, amounts which are received by
such Canadian Lender or the Canadian Administrative Agent from the Canadian
Borrower hereunder or as proceeds of the exercise of any rights or remedies of
any Canadian Lender or the Canadian Administrative Agent hereunder against the
Canadian Borrower, to the extent such amounts may be required to satisfy any
contingent or unmatured obligations or liabilities of the Canadian Borrower to
the Canadian Lenders or the Canadian Administrative Agent, or any of them
hereunder in respect of outstanding Bankers' Acceptances.
2.12 CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE.
(a) If the Canadian Administrative Agent determines in good faith, which
determination shall be final, conclusive and binding upon the Canadian Borrower,
and notifies the Canadian Borrower that, by reason of circumstances affecting
the money market, there is no market for Bankers' Acceptances, then:
(i) the right of the Canadian Borrower to request a
borrowing by way of Bankers' Acceptance shall be suspended
until the Canadian Administrative Agent determines that the
circumstances causing such suspension no longer exist and the
Canadian Administrative Agent so notifies the Canadian
Borrower; and
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(ii) any notice relating to a borrowing by way of Bankers'
Acceptance which is outstanding at such time shall be deemed
to be a notice requesting a borrowing by way of C$ Prime Loans
(all as if it were a notice given pursuant to Section 2.10).
(b) The Canadian Administrative Agent shall promptly notify
the Canadian Borrower and the Canadian Lenders of the suspension of the Canadian
Borrower's right to request a borrowing by way of Bankers' Acceptance and of the
termination of such suspension.
2.13 CANADIAN SWINGLINE COMMITMENT. Subject to the terms and
conditions hereof, the Canadian Swingline Lender agrees to make extensions of
credit to the Canadian Borrower from time to time during the Revolving
Commitment Period by making swing line loans ("CANADIAN SWINGLINE LOANS") to the
Canadian Borrower in Canadian Dollars and/or issuing Canadian Letters of Credit
on behalf of the Canadian Borrower in an aggregate amount not to exceed the
Canadian Swingline Commitment of such Lender. Each Canadian Swingline Loan will
be made by the Canadian Swingline Lender on an overdraft basis to meet a drawing
upon any account maintained by the Canadian Borrower with the Canadian Swingline
Lender and no notice of such borrowing shall be required by debiting the account
of the Canadian Borrower on the books of the Canadian Lending Office. The amount
of such overdraft from time to time shall be deemed to be a C$ Prime Loan or
such other type of Loans as shall be agreed to by the Canadian Borrower and the
Canadian Swingline Lender. The Canadian Borrower shall ensure that, after giving
effect to the making of any Canadian Swingline Loan, the aggregate amount of
Canadian Swingline Extensions of Credit then outstanding shall not exceed the
Canadian Swingline Commitment. During the Revolving Commitment Period, the
Canadian Borrower may use the Canadian Swingline Commitment by borrowing,
repaying and reborrowing and causing Canadian Letters of Credit to be issued,
all in accordance with the terms and conditions hereof.
2.14 REPAYMENT OF CANADIAN SWINGLINE LOANS. The Canadian
Borrower shall repay all outstanding Canadian Swingline Loans on the Revolving
Termination Date.
2.15 COMMITMENT FEES, ETC. (a) The U.S. Borrower agrees to
pay to the U.S. Administrative Agent (i) for the account of each U.S.
Revolving Lender a commitment fee for the period from and including the date
hereof to the last day of the Revolving Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available U.S.
Revolving Commitment of such Lender during the period for which payment is
made, payable on the Closing Date and, thereafter, quarterly in arrears on
the last day of each March, June, September and December and on the Revolving
Termination Date, commencing on the first of such dates to occur after the
Closing Date and (ii) for the account of each U.S. Term Lender a commitment
fee for the period from and including the date hereof to the Closing Date
(or, if earlier, the date upon which the U.S. Commitments shall be terminated
in accordance with Section 2.16), computed at the Commitment Fee Rate on the
U.S. Tranche A Term Commitment or the U.S. Tranche B Term Commitment, as the
case may be, of such Lender, payable on the Closing Date or on such earlier
date of termination.
(b) The Canadian Borrower agrees to pay in Canadian Dollars to
the Canadian Administrative Agent (i) for the account of each Canadian Revolving
Lender a commitment fee
44
for the period from and including the date hereof to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the
average daily amount of the Available Canadian Revolving Commitment of such
Lender during the period for which payment is made, payable on the Closing
Date and, thereafter, quarterly in arrears on the first Business Day of each
calendar quarter and on the Revolving Termination Date, commencing on the
first of such dates to occur after the Closing Date and (ii) for the account
of each Canadian Term Lender a commitment fee for the period from and
including the date hereof to the Closing Date (or, if earlier, the date upon
which the Canadian Commitments shall be terminated in accordance with Section
2.16) on the Canadian Term Commitment of such Lender, payable on the Closing
Date or on such earlier date of termination, PROVIDED, HOWEVER, that, in the
case of commitment fees payable pursuant to this paragraph on the Closing
Date, such fees shall be payable in U.S. Dollars and shall be based upon the
U.S. Dollar amounts of the Canadian Revolving Commitments and the Canadian
Term Commitments.
(c) The Canadian Borrower agrees to pay in Canadian Dollars to
the Canadian Swingline Lender a commitment fee for the period from and including
the date hereof to the last day of the Revolving Commitment Period, computed at
the Commitment Fee Rate on the average daily amount of the Available Canadian
Swingline Commitment of such Lender during the period for which payment is made,
payable on the Closing Date and, thereafter, quarterly in arrears on the first
Business Day of each calendar quarter and on the Revolving Termination Date,
commencing on the first of such dates to occur after the Closing Date.
(d) Each Borrower agrees to pay to the relevant Administrative
Agent the fees in the amounts and on the dates previously agreed to in writing
by such Borrower and such Administrative Agent.
2.16 TERMINATION OR REDUCTION OF COMMITMENTS AND CANADIAN
SWINGLINE COMMITMENT. (a) The U.S. Borrower shall have the right, upon not less
than (i) one Business Days' notice to the U.S. Administrative Agent, to
terminate the U.S. Commitments or (ii) three Business Days' notice to the U.S.
Administrative Agent, from time to time after the Closing Date, to terminate or
reduce the amount of the U.S. Revolving Commitments; PROVIDED that no such
termination or reduction of U.S. Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the U.S. Revolving Loans
made on the effective date thereof, the Total U.S. Revolving Extensions of
Credit would exceed the Total U.S. Revolving Commitments. Any such reduction
shall be in an amount equal to $1,000,000, or a whole multiple thereof, and
shall reduce permanently the U.S. Revolving Commitments then in effect.
(b) The Canadian Borrower shall have the right, upon not less
than (i) one Business Days' notice to the Canadian Administrative Agent, to
terminate the Canadian Commitments or (ii) three Business Days' notice to the
Canadian Administrative Agent, from time to time after the Closing Date, to
terminate or reduce the amount of the Canadian Revolving Commitments; PROVIDED
that no such termination or reduction of Canadian Revolving Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the Canadian
Revolving Loans made on the effective date thereof, the Canadian Dollar
Equivalent of the Total Canadian Revolving Loans would exceed the Total Canadian
Revolving Commitments. Any such reduction shall be in an amount equal to
C$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Canadian Revolving Commitments then in effect.
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(c) The Canadian Borrower shall have the right, upon not less
than three Business Days' notice to the Canadian Swingline Lender, to terminate
the Canadian Swingline Commitment or, from time to time, to reduce the amount of
the Canadian Swingline Commitment; PROVIDED that no such termination or
reduction of Canadian Swingline Commitment shall be permitted if, after giving
effect thereto and to any prepayments of the Canadian Swingline Loans made on
the effective date thereof, the aggregate then outstanding Canadian Swingline
Extensions of Credit would exceed the Canadian Swingline Commitment. Any such
reduction shall be in an amount equal to C$1,000,000, or a whole multiple
thereof, and shall reduce permanently the Canadian Swingline Commitment then in
effect.
2.17 OPTIONAL PREPAYMENTS. Each Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the relevant Administrative Agent
or, as the case may be, the Canadian Swingline Lender at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, C$ Prime Loans or U.S. Base Rate Loans,
which notice shall specify the date, amount of prepayment and the Type of Loans
to be prepaid; PROVIDED that if a Eurodollar Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, such Borrower shall
also pay any amounts owing pursuant to Section 2.27. Upon receipt of any such
notice the relevant Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Revolving Loans that are ABR Loans, C$ Prime Loans or U.S. Base Rate
Loans and Canadian Swingline Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial
prepayments of Canadian Swingline Loans shall be in an aggregate principal
amount of C$100,000 or a whole multiple thereof. Notwithstanding anything to the
contrary contained herein, Canadian Loans consisting of Bankers' Acceptances may
not be prepaid pursuant to this Section.
2.18 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) If
any Capital Stock shall be issued by any Group Member to any Person that is not
a Group Member (other than Capital Stock of the U.S. Borrower issued (x) to
employees of the U.S. Borrower and its Subsidiaries pursuant to the U.S.
Borrower's 401(k) plan or to employees of the Canadian Borrower and its
Subsidiaries pursuant to the Xxxxx Xxxx Stock Purchase Plan or (y) in connection
with the exercise of options issued to employees, consultants and directors of
the U.S. Borrower and its Subsidiaries), an amount equal to 50% of the Net Cash
Proceeds thereof shall be applied on the date of such issuance or incurrence
toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments and Canadian Swingline Commitment as set forth in Section 2.18(e).
(b) If any Indebtedness shall be issued or incurred by any
Group Member subsequent to the Closing Date (excluding (i) any refinancing of
the Bridge Facility permitted under this Agreement to the extent the proceeds of
any such refinancing are applied to repay the Bridge Facility and (ii) any
Indebtedness incurred in accordance with Section 7.2), an amount equal to 100%
of the Net Cash Proceeds thereof shall be applied on the date of such incurrence
toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments and Canadian Swingline Commitment as set forth in Section 2.18(e).
46
(c) If on any date any Group Member shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event which, when aggregated with all
other Net Cash Proceeds from Asset Sales or Recovery Events, respectively,
theretofore received by the Group Members during the fiscal year of the U.S.
Borrower in which such date occurs, exceeds $5,000,000 for all such Asset Sales
or Recovery Events, as the case may be, then, unless a Reinvestment Notice shall
be delivered in respect thereof, such Net Cash Proceeds in excess of $5,000,000
shall be applied on such date toward the prepayment of the Term Loans and the
reduction of the Revolving Commitments as set forth in Section 2.18(e); PROVIDED
that notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $15,000,000, (ii) the aggregate Net Cash
Proceeds of Recovery Events that may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice shall not exceed $15,000,000 and (iii) on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Commitments
and Canadian Swingline Commitment as set forth in Section 2.18(e).
(d) Concurrently with the delivery of the financial statements
referred to in Section 6.1(a) for each fiscal year of the U.S. Borrower,
commencing with the fiscal year ending on or about February 28, 2003, the U.S.
Borrower shall deliver to the U.S. Administrative Agent and each Lender a
certificate executed by a Responsible Officer of the U.S. Borrower (which may be
included as part of the Compliance Certificate delivered pursuant to Section
6.2(b)(ii) in connection with the financial statements for such fiscal year)
setting forth in reasonable detail the calculation of Excess Cash Flow for such
fiscal year. If there shall be Excess Cash Flow for any such fiscal year, the
U.S. Borrower shall, on the relevant Excess Cash Flow Application Date, apply
the ECF Percentage of such Excess Cash Flow toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments and Canadian Swingline
Commitment as set forth in Section 2.18(e). Each such prepayment and commitment
reduction shall be made on a date (an "EXCESS CASH FLOW APPLICATION DATE") no
later than five days after the earlier of (i) the date on which the financial
statements of the U.S. Borrower referred to in Section 6.1(a), for the fiscal
year with respect to which such prepayment is made, are required to be delivered
to the Lenders and (ii) the date such financial statements are actually
delivered.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section shall be applied, FIRST, to
the prepayment of the Term Loans, SECOND, to reduce permanently the Revolving
Commitments and, THIRD, to reduce permanently the Canadian Swingline Commitment.
Except to the extent provided in the immediately succeeding sentence,
prepayments of the Term Loans made pursuant to this Section shall be applied PRO
RATA to the U.S. Tranche A Term Loans, the U.S. Tranche B Term Loans and the
Canadian Term Loans and ratably to the respective remaining installments
thereof, and reductions of the Revolving Commitments made pursuant to this
Section shall be applied PRO RATA to the U.S. Revolving Commitments and the
Canadian Revolving Commitments in effect at the time of such reduction. Any
prepayments and Commitment reductions made pursuant to paragraph (c) of this
Section, to the extent the assets that are the subject of any Asset Sale or
Recovery Event are owned by the U.S. Borrower or any of its Subsidiaries (other
than the Canadian Borrower or any of its Subsidiaries) shall be applied, FIRST,
to the prepayment of the U.S. Term Loans (PRO RATA, to the U.S. Tranche A Term
Loans and the U.S. Tranche B Term
47
Loans and ratably to the respective remaining installments thereof), SECOND
to the permanent reduction of the U.S. Revolving Commitment, THIRD, to the
prepayment of the Canadian Term Loan (ratably to the remaining installments
thereof), FOURTH, to the permanent reduction of the Canadian Revolving
Commitment, and FIFTH, to the permanent reduction of the Canadian Swingline
Commitment. Any prepayments and Commitment reductions made pursuant to
paragraph (c) of this Section, to the extent the assets that are the subject
of any Asset Sale or Recovery Event are owned by the Canadian Borrower or any
of its Subsidiaries shall be applied, FIRST, to the prepayment of the
Canadian Term Loan (ratably to the remaining installments thereof), SECOND,
to the permanent reduction of the Canadian Revolving Commitment, THIRD, to
the permanent reduction of the Canadian Swingline Commitment, FOURTH, to the
prepayment of the U.S. Term Loans (PRO RATA, to the U.S. Tranche A Term Loans
and the U.S. Tranche B Term Loans and ratably to the respective remaining
installments thereof), and FIFTH, to the permanent reduction of the U.S.
Revolving Commitment.
(f) Notwithstanding anything to the contrary in Section
2.18(e) or 2.24, with respect to the amount of any mandatory prepayment
described in Section 2.18 that is allocated to U.S. Tranche B Term Loans (such
amount, the "TRANCHE B PREPAYMENT AMOUNT"), at any time when Tranche A Term
Loans remain outstanding, the relevant Borrower will, in lieu of applying such
amount to the prepayment of U.S. Tranche B Term Loans as provided in paragraph
(e) above, on the date specified in Section 2.18 for such prepayment, give the
Administrative Agents telephonic notice (promptly confirmed in writing)
requesting that the U.S. Administrative Agent prepare and provide to each U.S.
Tranche B Lender a notice (each, a "PREPAYMENT OPTION NOTICE") as described
below. As promptly as practicable after receiving such notice, the U.S.
Administrative Agent will send to each U.S. Tranche B Lender a Prepayment Option
Notice, which shall be in the form of Exhibit G, and shall include an offer by
the Borrowers to prepay on the date (each a "MANDATORY PREPAYMENT DATE") that is
10 Business Days after the date of the Prepayment Option Notice, the U.S.
Tranche B Term Loans of such Lender by an amount equal to the portion of the
Tranche B Prepayment Amount indicated in such Lender's Prepayment Option Notice.
On the Mandatory Prepayment Date, (i) the Borrowers shall pay to the relevant
U.S. Tranche B Lenders the aggregate amount necessary to prepay that portion of
the outstanding U.S. Tranche B Term Loans in respect of which such Lenders have
accepted prepayment as described above, and (ii) the Borrowers shall pay to the
Tranche A Lenders an amount equal to 100% of the portion of the Tranche B
Prepayment Amount not accepted by the relevant Lenders, and such amount shall be
applied to the prepayment of the Tranche A Term Loans, PROVIDED, HOWEVER, that
if such Tranche B Prepayment Amount arises from a mandatory prepayment from any
Asset Sale or Recovery Event with respect to assets owned by (x) the U.S.
Borrower or any of its Subsidiaries (other than the Canadian Borrower or any of
its Subsidiaries), such amount shall be applied FIRST, to the prepayment of the
U.S. Tranche A Term Loans and SECOND, to the prepayment of the Canadian Term
Loans and (y) the Canadian Borrower or any of its Subsidiaries, such amount
shall be applied FIRST, to the prepayment of the Canadian Term Loans and SECOND,
to the prepayment of the U.S. Tranche A Term Loans.
(g) Any reduction of the U.S. Revolving Commitments pursuant
to this Section 2.18 shall be accompanied by prepayment of the U.S. Revolving
Loans to the extent, if any, that the Total U.S. Revolving Extensions of Credit
exceed the amount of the Total U.S. Revolving Commitments as so reduced,
PROVIDED that if the aggregate principal amount of U.S. Revolving Loans then
outstanding is less than the amount of such excess (because U.S. L/C
48
Obligations constitute a portion thereof), the U.S. Borrower shall, to the
extent of the balance of such excess, replace outstanding U.S. Letters of
Credit and/or deposit an amount in cash in a cash collateral account
established with the U.S. Administrative Agent, for the benefit of the U.S.
Lenders, on terms and conditions satisfactory to the U.S. Administrative
Agent. Any reduction of the Canadian Revolving Commitments pursuant to this
Section shall be accompanied by prepayment of the Canadian Revolving Loans to
the extent, if any, that the Canadian Dollar Equivalent of the Total Canadian
Revolving Loans exceed the amount of the Total Canadian Revolving Commitments
as so reduced. Any reduction of the Canadian Swingline Commitment pursuant to
this Section shall be accompanied by prepayment of the Canadian Swingline
Loans to the extent, if any, that the aggregate then outstanding amount of
the Canadian Swingline Extensions of Credit exceeds the amount of the
Canadian Swingline Commitment as so reduced, PROVIDED that if the aggregate
principal amount of Canadian Swingline Loans then outstanding is less than
the amount of such excess (because Canadian L/C Obligations constitute a
portion thereof), the Canadian Borrower shall, to the extent of the balance
of such excess, replace outstanding Canadian Letters of Credit and/or deposit
an amount in cash in a cash collateral account established with the Canadian
Swingline Lender, on terms and conditions satisfactory to the Canadian
Swingline Lender. The application of any prepayment pursuant to this Section
shall be made, FIRST, to ABR Loans, U.S. Base Rate Loans or C$ Prime Loans,
as the case may be, and, SECOND, to Eurodollar Loans. Each prepayment of the
Loans under this Section (except in the case of Revolving Loans that are ABR
Loans, U.S. Base Rate Loans or C$ Prime Loans and Canadian Swingline Loans)
shall be accompanied by accrued interest to the date of such prepayment on
the amount prepaid.
2.19 CONVERSION AND CONTINUATION OPTIONS. (a) Either
Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans
(in the case of any U.S. Loan) or to convert Eurodollar Loans to U.S. Base
Rate Loans (in the case of any Canadian Loan in U.S. Dollars that is not a
Canadian Swingline Loan) by giving the relevant Administrative Agent at least
three Business Days' prior irrevocable notice of such election, PROVIDED that
any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. Either Borrower may elect from time
to time to convert ABR Loans (in the case of any U.S. Loan) or U.S. Base Rate
Loans (in the case of any Canadian Loan in U.S. Dollars that is not a
Canadian Swingline Loan) to Eurodollar Loans by giving the relevant
Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial
Interest Period therefor), PROVIDED that no ABR Loan or U.S. Base Rate Loan,
as the case may be, under a particular Facility may be converted into a
Eurodollar Loan when any Event of Default has occurred and is continuing and
the relevant Administrative Agent or the Majority Facility Lenders in respect
of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice, the relevant
Administrative Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
relevant Borrower giving irrevocable notice to the relevant Administrative
Agent, in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period to
be applicable to such Loans, PROVIDED that no Eurodollar Loan under a particular
Facility may be continued as such when any Event of Default has occurred and is
continuing and the relevant
49
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and PROVIDED, FURTHER, that if the relevant Borrower shall
fail to give any required notice as described above in this paragraph or if
such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans (in the case of any U.S.
Loan) or U.S. Base Rate Loans (in the case of any Canadian Loan in U.S.
Dollars that is not a Canadian Swingline Loan) on the last day of such then
expiring Interest Period. Upon receipt of any such notice the relevant
Administrative Agent shall promptly notify each relevant Lender thereof.
(c) Subject to the provisions of this Agreement, the Canadian
Borrower may, prior to the Revolving Credit Termination Date or the final
maturity date of the Canadian Term Loans, as the case may be, effective on any
Business Day, convert, in whole or in part, Canadian Loans (other than Canadian
Swingline Loans) that are C$ Prime Loans into Bankers' Acceptances or Bankers'
Acceptances into C$ Prime Loans upon giving to the Canadian Administrative Agent
prior irrevocable written or telephonic notice (in the case of telephonic
notice, to be promptly confirmed in writing) within the notice period and in the
form which would be required to be given to the Canadian Administrative Agent in
respect of the relevant Facility under which such Canadian Loan was made or into
which the outstanding Canadian Loan (other than Canadian Swingline Loans) is to
be converted in accordance with the provisions of Sections 2.5, 2.10 or 2.11, as
applicable, PROVIDED that:
(i) no C$ Prime Loan may be converted into a Bankers'
Acceptance when any Default or Event of Default has occurred
and is continuing;
(ii) each conversion to Bankers' Acceptances shall be for
an aggregate amount of C$1,000,000 (and whole multiples of
C$100,000 in excess thereof), and each conversion to C$ Prime
Loans shall be in a minimum aggregate amount of C$500,000; and
(iii) Bankers' Acceptances may be converted only on the
maturity date of such Bankers' Acceptances and, PROVIDED that,
if less than all Bankers' Acceptances are converted, then
after such conversion not less than C$1,000,000 (and whole
multiples of C$100,000 in excess thereof) shall remain as
Bankers' Acceptances.
2.20 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans and all selections of Interest Periods shall
be in such amounts and be made pursuant to such elections so that, (a) after
giving effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than fifteen Eurodollar
Tranches shall be outstanding at any one time.
2.21 INTEREST RATES AND PAYMENT DATES. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.
50
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) Each C$ Prime Loan shall bear interest at a rate per annum
equal to the C$ Prime Rate plus the Applicable Margin, and each U.S. Base Rate
Loan shall bear interest at a rate per annum equal to the U.S. Base Rate plus
the Applicable Margin.
(d) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), the principal amount of all
Loans and Reimbursement Obligations shall bear interest at a rate per annum
equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section PLUS 2%,
(y) in the case of U.S. Reimbursement Obligations, the rate applicable to ABR
Loans under the U.S. Revolving Facility PLUS 2% or (z) in the case of Canadian
Reimbursement Obligations, the rate applicable to C$ Prime Loans under the
Canadian Swingline Facility PLUS 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans,
U.S. Base Rate Loans or C$ Prime Loans, as the case may be, under the relevant
Facility PLUS 2% (or, in the case of any such other amounts that do not relate
to a particular Facility, the rate then applicable to ABR Loans under the U.S.
Revolving Facility PLUS 2%), in each case, with respect to clauses (i) and (ii)
above, from the date of such non-payment until such amount is paid in full (as
well after as before judgment).
(e) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to paragraph (d) of this
Section shall be payable from time to time on demand. Interest in respect of
U.S. Loans, U.S. Reimbursement Obligations and Canadian Loans that are
denominated in Dollars (and all other amounts denominated in Dollars) shall be
payable in Dollars, and interest in respect of Canadian Loans or Canadian
Reimbursement Obligations if such Loans or Reimbursement Obligations are
denominated in Canadian Dollars (and all other amounts denominated in Canadian
Dollars) shall be payable in Canadian Dollars.
(f) (i) If any provision of this Agreement would obligate any
Loan Party to make any payment of interest or other amount payable to any
Canadian Lender in an amount or calculated at a rate which would be prohibited
by law or would result in a receipt by such Canadian Lender of interest at a
criminal rate (as such terms are construed under the Criminal Code (Canada)),
then notwithstanding such provision, such amount or rate shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by law or so result in a
receipt by such Canadian Lender of interest at a criminal rate, such adjustment
to be effected, to the extent necessary, as follows:
(x) first, by reducing the amount or rates of interest
required to be paid under this Section; and
(y) thereafter, by reducing any fees, commissions, premiums
and other amounts which would constitute interest for purposes of
Section 347 of the Criminal Code (Canada).
51
(ii) If, notwithstanding the provisions of clause (i) of this
paragraph (f), and after giving effect to all adjustments contemplated thereby,
any Canadian Lender shall have received an amount in excess of the maximum
permitted by such clause, then the applicable Loan Party shall be entitled, by
notice in writing to such Canadian Lender, to obtain reimbursement from such
Canadian Lender of an amount equal to such excess, and, pending such
reimbursement, such amount shall be deemed to be an amount payable by such
Canadian Lender to such Loan Party.
(iii) Any amount or rate of interest referred to in this
paragraph (f) shall be determined in accordance with generally accepted
actuarial practices and principles as an effective annual rate of interest over
the term of any Canadian Loan on the assumption that any charges, fees or
expenses that fall within the meaning of "interest" (as defined in the Criminal
Code (Canada)) shall, if they relate to a specific period of time, be prorated
over that period of time and otherwise be prorated over the period from the
Closing Date to the Revolving Credit Termination Date or the final maturity date
of the Canadian Term Loans, as the case may be, and, in the event of dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by the
Canadian Administrative Agent shall be conclusive for the purposes of such
determination absent manifest error.
2.22 COMPUTATION OF INTEREST AND FEES. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that (i) with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, U.S. Base Rate Loans and C$ Prime Loans, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed and (ii) Acceptance Fees and interest calculated on the
basis of the CDOR Rate shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed. The relevant
Administrative Agent shall as soon as practicable notify the relevant Borrower
and the relevant Lenders of each determination of a Eurodollar Rate or the
Applicable BA Discount Rate. Any change in the interest rate on a Loan resulting
from a change in the ABR, the C$ Prime Rate, the U.S. Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The relevant
Administrative Agent shall as soon as practicable notify the relevant Borrower
and the relevant Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the relevant
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the relevant Borrower and the relevant Lenders in the
absence of manifest error. The relevant Administrative Agent shall, at the
request of the relevant Borrower, deliver to such Borrower a statement showing
the quotations used by such Administrative Agent in determining any interest
rate pursuant to Section 2.22(a).
(c) For the purposes of the Interest Act (Canada), in any case
in which an interest rate is stated in this Agreement to be calculated on the
basis of a year of 360 days or 365 days, as the case may be, the yearly rate of
interest to which such interest rate is equivalent is equal to such interest
rate multiplied by the number of days in the year in which the relevant interest
payment accrues and divided by 360 or 365, respectively. In addition, the
principles of deemed
52
investment of interest do not apply to any interest calculations under this
Agreement and the rates of interest stipulated in this Agreement are intended
to be nominal rates and not effective rates or yields.
2.23 INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period:
(a) either Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the relevant
Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) either Administrative Agent shall have received notice
from the Majority Facility Lenders in respect of the relevant Facility
that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
(c) such Administrative Agent shall give telecopy or
telephonic notice thereof to the relevant Borrower and the relevant
Lenders as soon as practicable thereafter.
If such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
ABR Loans (in the case of any U.S. Loan) or U.S. Base Rate Loans (in the case of
any Canadian Loan), (y) any Loans under the relevant Facility that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans or U.S. Base Rate Loans, as the case may be, and
(z) any outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the last day of the then-current Interest Period, to ABR Loans (in
the case of any U.S. Loan) or to U.S. Base Rate Loans (in the case of any
Canadian Loan). Until such notice has been withdrawn by the relevant
Administrative Agent, no further Eurodollar Loans under the relevant Facility
shall be made or continued as such, nor shall the relevant Borrower have the
right to convert Loans under the relevant Facility to Eurodollar Loans.
2.24 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by
the Borrowers from the Lenders hereunder, each payment by the Borrowers on
account of any Acceptance Fee or commitment fee and any reduction of the
Commitments of the Lenders shall be made PRO RATA according to the respective
U.S. Tranche A Term Percentages, U.S. Tranche B Term Percentages, U.S.
Revolving Percentages, Canadian Term Percentages or Canadian Revolving
Percentages as the case may be, of the relevant Lenders. The preceding
sentence shall not apply to the Canadian Swingline Facility.
(b) Each payment (including each prepayment) by the U.S.
Borrower on account of principal of and interest on the U.S. Term Loans shall be
made PRO RATA according to the respective outstanding principal amounts of the
U.S. Term Loans then held by the U.S. Term Lenders (except as otherwise provided
in Section 2.18(f)). The amount of each principal prepayment of the U.S. Term
Loans shall be applied to reduce the then remaining installments of the U.S.
Tranche A Term Loans and U.S. Tranche B Term Loans, as the case may be, PRO RATA
53
based upon the then remaining principal amount thereof. Each payment (including
each prepayment) by the Canadian Borrower on account of principal of and
interest on the Canadian Term Loans shall be made PRO RATA according to the
respective outstanding principal amounts of the Canadian Term Loans then held by
the Canadian Term Lenders (except as otherwise provided in Section 2.18(f)). The
amount of each principal prepayment of the Canadian Term Loans shall be applied
to reduce the then remaining installments of the Canadian Term Loans PRO rata
based upon the then remaining principal amount thereof. Amounts prepaid on
account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the U.S.
Borrower on account of principal of and interest on the U.S. Revolving Loans
shall be made PRO RATA according to the respective outstanding principal amounts
of the U.S. Revolving Loans then held by the U.S. Revolving Lenders. Each
payment (including each prepayment) by the Canadian Borrower on account of
principal of and interest on the Canadian Revolving Loans shall be made PRO RATA
according to the respective outstanding principal amounts of the Canadian
Revolving Loans then held by the Canadian Revolving Lenders.
(d) All payments (including prepayments) to be made by the
Borrowers hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 noon, New York City time (in the case of U.S. Loans or obligations) or
Toronto time (in the case of Canadian Loans or obligations), on the due date
thereof to the relevant Administrative Agent, for the account of the relevant
Lenders, at the relevant Payment Office, in Dollars or Canadian Dollars, as the
case may be, and in immediately available funds. The relevant Administrative
Agent shall distribute such payments to the relevant Lenders as soon as
practicable following receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan 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. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the relevant Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing available to
such Administrative Agent, such Administrative Agent may assume that such Lender
is making such amount available to such Administrative Agent, and such
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower a corresponding amount. If such amount is not made
available to such Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to such Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average Federal
Funds Effective Rate (in the case of U.S. Loans) or at the then effective CDOR
Rate (in the case of Canadian Loans) for the period until such Lender makes such
amount immediately available to such Administrative Agent and such other
compensatory fees as such Administrative Agent may reasonably request. A
certificate of the relevant Administrative Agent submitted to any Lender with
respect to any amounts owing
54
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the relevant
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, such Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applicable to ABR
Loans, U.S. Base Rate Loans or C$ Prime Loans, as the case may be, under the
relevant Facility, on demand, from the relevant Borrower.
(f) Unless the relevant Administrative Agent shall have been
notified in writing by the relevant Borrower prior to the date of any payment
due to be made by such Borrower hereunder that such Borrower will not make such
payment to such Administrative Agent, such Administrative Agent may assume that
such Borrower is making such payment, and such Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available to
the Lenders their respective PRO RATA shares of a corresponding amount. If such
payment is not made to the relevant Administrative Agent by such Borrower within
three Business Days after such due date, such Administrative Agent shall be
entitled to recover, on demand, from each Lender to which any amount which was
made available pursuant to the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily average Federal Funds Effective
Rate (in the case of U.S. Loans) or at the then effective CDOR Rate (in the case
of Canadian Loans) and such other compensatory fees as such Administrative Agent
may reasonably request. Nothing herein shall be deemed to limit the rights of
either Administrative Agent or any Lender against the Borrowers.
2.25 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 any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of
Credit, any Application or any Eurodollar Loan made by it, or
any Bankers' Acceptances purchased or accepted by it, or
change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by
Section 2.26 and changes in the rate of tax on the net income
of such Lender or changes in the rate of any branch taxes or
doing business taxes (in both cases, imposed in lieu of net
income taxes) imposed on 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 that is not otherwise included in the
determination of the Eurodollar Rate, the BA Discount Rate or
any other rate of interest 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,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining
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Eurodollar Loans or issuing or participating in Letters of Credit, or
purchasing or accepting Bankers' Acceptances, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the relevant
Borrower shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such increased cost or
reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
relevant Borrower (with a copy to the relevant Administrative Agent) of the
event by reason of which it has become so entitled.
(b) If any Lender shall have 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 Governmental
Authority made subsequent to the date hereof 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 or under or in respect of any Letter of
Credit 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 deemed by such Lender to be material, then from time to time, after
submission by such Lender to the relevant Borrower (with a copy to the relevant
Administrative Agent) of a written request therefor, such Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation for such reduction; PROVIDED that neither Borrower shall be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies such
Borrower of such Lender's intention to claim compensation therefor; and PROVIDED
FURTHER that, if the circumstances giving rise to such claim have a retroactive
effect, then such six-month period shall be extended to include the period of
such retroactive effect.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the relevant Borrower (with
a copy to the relevant Administrative Agent) shall be conclusive in the absence
of manifest error. The obligations of the Borrowers pursuant to this Section
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.26 TAXES. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on either Administrative Agent or any Lender as a
result of a present or former connection between such Administrative Agent or
such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from such Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to either Administrative Agent or any Lender hereunder,
the amounts so payable to such Administrative Agent or such
56
Lender shall be increased to the extent necessary to yield to such
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, PROVIDED, HOWEVER, that
neither Borrower shall be required to increase any such amounts payable to
any Lender with respect to any Non-Excluded Taxes (i) that are attributable
to such Lender's failure to comply with the requirements of paragraph (d) or
(e) of this Section, (ii) that are United States withholding taxes imposed on
amounts payable to such Lender at the time such Lender becomes a party to
this Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
U.S. Borrower with respect to such Non-Excluded Taxes pursuant to this
paragraph or (iii) that are Canadian withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Canadian Borrower with respect to such Non-Excluded Taxes pursuant to this
paragraph.
(b) In addition, the Borrowers shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by either Borrower, as promptly as possible thereafter such Borrower shall send
to the relevant Administrative Agent for its own account or for the account of
the relevant Lender, as the case may be, a certified copy of an original
official receipt received by such Borrower showing payment thereof. If either
Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the relevant Administrative
Agent the required receipts or other required documentary evidence, such
Borrower shall indemnify the relevant Administrative Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by such
Administrative Agent or any Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "NON-U.S. LENDER") shall deliver
to the U.S. Borrower and the U.S. Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the U.S. Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the U.S.
Borrower at any time it determines that it is no longer in a position to provide
any previously delivered certificate to the U.S. Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a
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Non-U.S. Lender shall not be required to deliver any form pursuant to this
paragraph that such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in
which a Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
relevant Borrower (with a copy to the relevant Administrative Agent), at the
time or times prescribed by applicable law or reasonably requested by such
Borrower, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate, PROVIDED that such Lender is legally entitled to complete,
execute and deliver such documentation and in such Lender's judgment such
completion, execution or submission would not materially prejudice the legal
position of such Lender.
(f) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.27 INDEMNITY. Each Borrower agrees to indemnify each
Lender for, and to hold each Lender harmless from, any loss or expense that
such Lender may sustain or incur as a consequence of (a) default by such
Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after such Borrower has given a notice requesting the same
in accordance with the provisions of this Agreement, (b) default by such
Borrower in making any prepayment of or conversion from Eurodollar Loans
after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day that is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the
date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) OVER (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. A certificate as to any amounts
payable pursuant to this Section submitted to the relevant Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.
2.28 CHANGE OF LENDING OFFICE. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.25
or 2.26(a) with respect to such Lender, it will, if requested by the relevant
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by
such event with the object of avoiding the consequences of such event;
PROVIDED that such designation is made on terms that, in the sole judgment of
such Lender, cause such Lender and its lending office(s) to suffer no
economic, legal or regulatory disadvantage, and PROVIDED
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FURTHER, that nothing in this Section shall affect or postpone any of the
obligations of either Borrower or the rights of any Lender pursuant to
Section 2.25 or 2.26(a).
2.29 REPLACEMENT OF LENDERS. The Borrowers shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.25 or 2.26(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; 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 2.28 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.25 or 2.26(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 (including amounts of
interest and fees that have accrued but are not then due), (v) the relevant
Borrower shall be liable to such replaced Lender under Section 2.27 if any
Eurodollar 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 relevant Administrative Agent, (vii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
10.6 (PROVIDED that the relevant 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 relevant Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.25 or 2.26(a), as the
case may be, and (ix) any such replacement shall not be deemed to be a waiver of
any rights that either Borrower, either Administrative Agent or any other Lender
shall have against the replaced Lender.
2.30 CONTROLS; CURRENCY EXCHANGE RATE FLUCTUATIONS. (a) In the
event that at any time the Canadian Borrower determines that by reason of
changes in currency exchange rates (i) the aggregate then outstanding Canadian
Dollar Equivalent of the Total Canadian Revolving Loans exceeds the Total
Canadian Revolving Commitment by more than 5% or (ii) the aggregate then
outstanding Canadian Dollar Equivalent principal amount of the Canadian Term
Loans exceeds by more than 5% the aggregate principal amount of Canadian Term
Loans that would have been then outstanding in Canadian Dollars if the Canadian
Term Loans had been made in Canadian Dollars, had remained outstanding at all
times in Canadian Dollars and were repaid in accordance with Section 2.6
(disregarding any optional or mandatory prepayments), the Canadian Borrower
shall immediately notify the Canadian Administrative Agent (which notice shall
promptly be confirmed in writing).
(b) The Canadian Administrative Agent shall calculate the
Canadian Dollar Equivalent of the Total Canadian Revolving Loans from time to
time, and in any event on each date of receipt of a notice of a borrowing of
Canadian Revolving Loans and otherwise not less frequently than once each
calendar month.
(c) In the event that on any date the Canadian Administrative
Agent calculates or is notified that any excess of a type described in Section
2.30(a)(i) or (ii) (a "C$ EXCESS") exists, the Canadian Administrative Agent
shall give notice to such effect to the Canadian Borrower and the Canadian
Lenders.
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(d) Within five Business Days after notification to the
Canadian Administrative Agent pursuant to clause (a) above or receipt of notice
pursuant to paragraph (c) above, the Canadian Borrower shall make such
repayments or prepayments of the Canadian Revolving Loans or, as the case may
be, Canadian Term Loans (together with interest accrued to the date of such
repayment or prepayment) as shall be necessary to eliminate any C$ Excess,
unless, by the time such repayment or prepayment is required to be made, such C$
Excess no longer exists by reason of currency exchange rate fluctuations. If any
such repayment or prepayment of a Eurodollar Loan pursuant to this Section
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Canadian Borrower shall pay to the Canadian Lenders
such amounts, if any, as may be required pursuant to Section 2.27.
2.31 OCCURRENCE OF A RESCISSION EVENT. Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence of a
Rescission Event, without any further action by either Administrative Agent or
any Lender:
(a) the U.S. Borrower shall, upon receipt of the refund of the
Purchase Price (as defined in the Acquisition Agreement) pursuant to
the Acquisition Agreement and all other amounts payable as a result of
the termination of the Acquisition Agreement (including any amounts
paid in respect of expense reimbursement pursuant to the Acquisition
Agreement) to the U.S. Borrower pursuant thereto as a result of a
Rescission Event (the "PURCHASE PRICE REFUND"), apply the proceeds of
the Purchase Price Refund as follows: FIRST, to redeem the Senior Notes
or, as the case may be, to repay the loans under the Bridge Facility in
an aggregate amount equal to 101% of the aggregate principal amount of
the Senior Notes or, as the case may be, such loans outstanding at the
time of the prepayment, together with accrued and unpaid interest
thereon to extent interest is paid pursuant to the Acquisition
Agreement (it being agreed that nothing in this clause shall be deemed
to limit the ability of the U.S. Borrower to pay any remaining interest
on the Senior Notes or, as the case may be, loans under the Bridge
Facility from sources other than the Purchase Price Refund) and SECOND,
to prepay the Term Loans (ratably as among them (and ratably to the
then remaining installments of principal of each thereof) at a price
equal to 101% of the unpaid principal amount thereof so prepaid and
without giving effect to Section 2.18(f)); and
(b) (i) each of the Term Loans shall be deemed to mature on
the date that is six months after the occurrence of the Rescission
Event, and the aggregate principal amount of the Term Loans outstanding
(after giving effect to paragraph (a) above) shall be due and payable
on such maturity date and (ii) the Revolving Commitments of all Lenders
and the Canadian Swingline Commitment of the Canadian Swingline Lender
shall terminate on the date that is six months after the occurrence of
the Rescission Event, and on such date, the aggregate principal amount
of all Revolving Loans and Canadian Swingline Loans outstanding shall
be due and payable and all outstanding Letters of Credit and Bankers'
Acceptances shall be cash collateralized in the manner set forth in
Section 8.
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SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Prior to the Closing Date, CIBC has
issued the Existing Letter of Credit which, from and after the Closing Date,
shall constitute a U.S. Letter of Credit hereunder. Subject to the terms and
conditions hereof, the U.S. Issuing Lender, in reliance on the agreements of the
other U.S. Revolving Lenders set forth in Section 3.4(a), agrees to issue
letters of credit ("U.S. LETTERS OF CREDIT") for the account of the U.S.
Borrower on any Business Day during the Revolving Commitment Period in such form
as may be approved from time to time by the U.S. Issuing Lender; PROVIDED that
the U.S. Issuing Lender shall not issue any U.S. Letter of Credit if, after
giving effect to such issuance, (i) the U.S. L/C Obligations would exceed the
U.S. L/C Commitment or (ii) the aggregate amount of the Available U.S. Revolving
Commitments would be less than zero. Each U.S. Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the Revolving Termination Date, PROVIDED that any U.S. Letter of
Credit with a one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred to in
clause (y) above).
(b) Subject to the terms and conditions hereof, the Canadian
Issuing Lender agrees to issue letters of credit ("CANADIAN LETTERS OF CREDIT")
for the account of the Canadian Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
the Canadian Issuing Lender; PROVIDED that the Canadian Issuing Lender shall
have no obligation to issue any Canadian Letter of Credit if, after giving
effect to such issuance, the Canadian L/C Obligations, when added to the
aggregate principal amount of the Canadian Swingline Loans then outstanding,
would exceed the Canadian Swingline Commitment. Each Canadian Letter of Credit
shall (i) be denominated in Canadian Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
that is five Business Days prior to the Revolving Termination Date, PROVIDED
that any Canadian Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above).
(c) Neither Issuing Lender shall at any time be obligated to
issue any Letter of Credit if such issuance would conflict with, or cause such
Issuing Lender or any U.S. L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) The U.S.
Borrower may from time to time request that the U.S. Issuing Lender issue a U.S.
Letter of Credit by delivering to the U.S. Issuing Lender at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the U.S. Issuing Lender, and such other certificates, documents and other
papers and information as the U.S. Issuing Lender may request. Upon receipt of
any Application, the U.S. Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the U.S. Letter of Credit requested thereby (but in no event
shall the U.S. Issuing Lender be required to issue any U.S. Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by
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issuing the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed to by the U.S. Issuing Lender and the U.S.
Borrower. The U.S. Issuing Lender shall furnish a copy of such Letter of
Credit to the U.S. Borrower promptly following the issuance thereof. The U.S.
Issuing Lender shall promptly furnish to the U.S. Administrative Agent, which
shall in turn promptly furnish to the U.S. Revolving Lenders, notice of the
issuance of each U.S. Letter of Credit (including the amount thereof).
(b) The Canadian Borrower may from time to time request that
the Canadian Issuing Lender issue a Canadian Letter of Credit by delivering to
the Canadian Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Canadian Issuing
Lender, and such other certificates, documents and other papers and information
as the Canadian Issuing Lender may request. Upon receipt of any Application, the
Canadian Issuing Lender will process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Canadian Letter of Credit requested thereby (but in no event shall the
Canadian Issuing Lender be required to issue any Canadian Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the Canadian Issuing
Lender and the Canadian Borrower. The Canadian Issuing Lender shall furnish a
copy of such Letter of Credit to the Canadian Borrower promptly following the
issuance thereof.
3.3 FEES AND OTHER CHARGES. (a) The U.S. Borrower will pay a
fee (to be shared among the U.S. Revolving Lenders ratably according to their
respective U.S. Revolving Percentages) on all outstanding U.S. Letters of Credit
at a per annum rate equal to the Applicable Margin then in effect with respect
to Eurodollar Loans under the U.S. Revolving Facility, and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date of such U.S.
Letters of Credit. In addition, the U.S. Borrower shall pay to the U.S. Issuing
Lender for its own account a fronting fee of 0.25% per annum on the undrawn and
unexpired amount of each U.S. Letter of Credit, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date of such U.S. Letter of Credit.
(b) The Canadian Borrower will pay a fee on all outstanding
Canadian Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Canadian Revolving
Facility and payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date of such Canadian Letters of Credit. In addition, the Canadian
Borrower shall pay to the Canadian Issuing Lender for its own account a fronting
fee of 0.25% per annum on the undrawn and unexpired amount of each Canadian
Letter of Credit, payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date of such Canadian Letter of Credit.
(c) In addition to the foregoing fees, the U.S. Borrower shall
pay or reimburse the U.S. Issuing Lender, and the Canadian Borrower shall pay or
reimburse the Canadian Issuing Lender, for such normal and customary costs and
expenses as are incurred or charged by the relevant Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
U.S. Letter of Credit or Canadian Letter of Credit, as the case may be.
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3.4 L/C PARTICIPATIONS. (a) The U.S. Issuing Lender
irrevocably agrees to grant and hereby grants to each U.S. L/C Participant, and,
to induce the U.S. Issuing Lender to issue U.S. Letters of Credit, each U.S. L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the U.S. Issuing Lender, on the terms and conditions set forth
below, for such U.S. L/C Participant's own account and risk an undivided
interest equal to such U.S. L/C Participant's U.S. Revolving Percentage in the
U.S. Issuing Lender's obligations and rights under and in respect of each U.S.
Letter of Credit and the amount of each draft paid by the U.S. Issuing Lender
thereunder. Each U.S. L/C Participant unconditionally and irrevocably agrees
with the U.S. Issuing Lender that, if a draft is paid under any U.S. Letter of
Credit for which the U.S. Issuing Lender is not reimbursed in full by the U.S.
Borrower in accordance with the terms of this Agreement, such U.S. L/C
Participant shall pay to the U.S. Issuing Lender upon demand at the U.S. Issuing
Lender's address for notices specified herein an amount equal to such U.S. L/C
Participant's U.S. Revolving Percentage of the amount of such draft, or any part
thereof, that is not so reimbursed.
(b) If any amount required to be paid by any U.S. L/C
Participant to the U.S. Issuing Lender pursuant to Section 3.4(a) in respect of
any unreimbursed portion of any payment made by such Issuing Lender under any
Letter of Credit is paid to such Issuing Lender within three Business Days after
the date such payment is due, such U.S. L/C Participant shall pay to such
Issuing Lender on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate during the period from
and including the date such payment is required to the date on which such
payment is immediately available to such Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360. If any such amount required to be paid by any
U.S. L/C Participant pursuant to Section 3.4(a) is not made available to the
Issuing Lender by such U.S. L/C Participant within three Business Days after the
date such payment is due, such Issuing Lender shall be entitled to recover from
such U.S. L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR Loans
under the U.S. Revolving Facility. A certificate of the Issuing Lender submitted
to any U.S. L/C Participant with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the U.S. Issuing Lender has
made payment under any Letter of Credit and has received from any U.S. L/C
Participant its PRO RATA share of such payment in accordance with Section
3.4(a), such Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the relevant Borrower or otherwise, including
proceeds of collateral applied thereto by such Issuing Lender), or any payment
of interest on account thereof, such Issuing Lender will distribute to such U.S.
L/C Participant its PRO RATA share thereof; PROVIDED, HOWEVER, that in the event
that any such payment received by such Issuing Lender shall be required to be
returned by such Issuing Lender, such U.S. L/C Participant shall return to such
Issuing Lender the portion thereof previously distributed by such Issuing Lender
to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWERS. (a) The U.S.
Borrower agrees to reimburse the U.S. Issuing Lender on the Business Day next
succeeding the Business Day on which the U.S. Issuing Lender notifies the U.S.
Borrower of the date and amount of a draft presented under any U.S. Letter of
Credit and paid by the U.S. Issuing Lender for the
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amount of (a) such draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by the U.S. Issuing Lender in connection with such
payment. Each such payment shall be made to the U.S. Issuing Lender at its
address for notices referred to herein in Dollars and in immediately
available funds. Interest shall be payable on any such amounts from the date
on which the relevant draft is paid until payment in full at the rate set
forth in (i) until the Business Day next succeeding the date of the relevant
notice, Section 2.21(b) and (ii) thereafter, Section 2.21(d).
(b) The Canadian Borrower agrees to reimburse the Canadian
Issuing Lender on the Business Day next succeeding the Business Day on which the
Canadian Issuing Lender notifies the Canadian Borrower of the date and amount of
a draft presented under any Canadian Letter of Credit and paid by the Canadian
Issuing Lender for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by the Canadian Issuing Lender in
connection with such payment. Each such payment shall be made to the Canadian
Issuing Lender at its address for notices referred to herein in Canadian Dollars
and in immediately available funds. Interest shall be payable on any such
amounts from the date on which the relevant draft is paid until payment in full
at the rate set forth in (i) until the Business Day next succeeding the date of
the relevant notice, Section 2.21(c) and (ii) thereafter, Section 2.21(d).
3.6 OBLIGATIONS ABSOLUTE. Each Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that such Borrower may have or have had against the relevant Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. Each Borrower also agrees
with the relevant Issuing Lender that (except as provided in the following
sentence) such Issuing Lender shall not be responsible for, and such Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among such Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of such Borrower against any
beneficiary of such Letter of Credit or any such transferee. Neither Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions which have resulted from the gross negligence or willful misconduct of
such Issuing Lender. Each Borrower agrees that any action taken or omitted by
the relevant Issuing Lender under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York (in the case of U.S. Letters of
Credit) or in the laws of the Province of Ontario and the laws of Canada
applicable thereto (in the case of Canadian Letters of Credit), shall be binding
on the relevant Borrower and shall not result in any liability of such Issuing
Lender to such Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any Letter of Credit, the relevant Issuing Lender shall
promptly notify the relevant Borrower of the date and amount thereof. The
responsibility of either Issuing Lender to the relevant Borrower in connection
with any draft presented for payment under any Letter of Credit
64
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are substantially in conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agents and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrowers hereby jointly and severally represent and
warrant to each Administrative Agent and each Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited pro forma
consolidated balance sheet of the U.S. Borrower and its consolidated
Subsidiaries as of March 3, 2001 (including the notes thereto) (the "PRO FORMA
BALANCE SHEET"), and the unaudited pro forma statement of operations of the U.S.
Borrower and its consolidated Subsidiaries for the twelve month period ended
March 3, 2001 (including the notes thereto) (the "PRO FORMA STATEMENT OF
OPERATIONS"), copies of which have heretofore been made available to the Lenders
in the Confidential Information Memorandum, have been prepared giving effect (as
if such events had occurred on such date, in the case of the Pro Forma Balance
Sheet, or as if such events had occurred on the first day of the twelve-month
period ended March 3, 2001 and as if the twelve-month period for the Pillsbury
Businesses that ended on December 31, 2000 and the twelve-month period for the
Xxxxx Xxxx Business (as defined in the Acquisition Agreement) that ended on May
27, 2000 had ended on March 3, 2001, in the case of the Pro Forma Statement of
Operations) to (i) the consummation of the Acquisition (as defined in the Asset
Purchase Agreement, dated as of February 4, 2001, among the U.S. Borrower,
General Xxxxx and The Pillsbury Company, as such agreement was in effect
immediately prior to the date hereof), (ii) the Loans to be made and the Senior
Notes to be issued or, as the case may be, the loans to be made under the Bridge
Facility on the Closing Date and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet and the Pro Forma Statement of Operations, the Updated Pro Forma
Statement of Operations and the Updated Pro Forma Balance Sheet have been or, as
the case may be, will be prepared based on the best information available to the
U.S. Borrower as of the date of delivery thereof, and present or, as the case
may be, will present fairly on a pro forma basis in accordance with Regulation
S-X promulgated under the Securities Exchange Act of 1934, as amended (except
that the information for the Xxxxx Xxxx Business referred to above is not
sufficiently up to date to meet the requirements of such Regulation), the
estimated financial position of the U.S. Borrower and its consolidated
Subsidiaries as at March 3, 2001 or September 1, 2001, as applicable, assuming
that the events specified in the preceding sentence had actually occurred at
such date, in the case of the Pro Forma Balance Sheet or the Updated Pro Forma
Balance Sheet, or as if such events had occurred on the first day of the most
recently completed fiscal period covered thereby as more particularly set forth
above in this Section or in Section 5.1(c), as applicable, in the case of the
Pro Forma Statement of Operations or the Updated Pro Forma Statement of
Operations.
65
(b) The audited consolidated balance sheets of the U.S.
Borrower and its consolidated Subsidiaries as at February 29, 2000 and March 3,
2001, and the related consolidated statements of operations and of cash flows
for each of the years in the three-year period ended March 3, 2001, reported on
by and accompanied by an unqualified report from KPMG LLP, copies of which have
heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the U.S. Borrower and its consolidated Subsidiaries as at
such dates, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended. The unaudited
consolidated balance sheet of the U.S. Borrower and its consolidated
Subsidiaries as at September 1, 2001, and the related unaudited consolidated
statements of operations and cash flows for the six month period ended on such
date, present fairly the consolidated financial condition of the U.S. Borrower
and its consolidated Subsidiaries as at such date, and the consolidated results
of its operations and its consolidated cash flow for the six month period then
ended (subject to normal year-end adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). No Group Member has any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from March 3, 2001 to and
including the date of this Agreement there has been no Disposition by any Group
Member of any material part of its business or property other than sales of
inventory in the ordinary course of business.
4.2 NO CHANGE. Since March 3, 2001, in the case of the U.S.
Borrower and its Subsidiaries, or June 30, 2001, in the case of the Pillsbury
Businesses, there has been no development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
4.3 EXISTENCE; COMPLIANCE WITH LAW. Each Group Member (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except where the failure to be so
qualified could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of each
Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken
all necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of
each Borrower, to authorize the extensions of credit on the terms and conditions
of this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any
66
Governmental Authority or any other Person is required in connection with the
Acquisition and the extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents, except (i) consents, authorizations, filings and notices
described in Schedule 4.4, which consents, authorizations, filings and
notices will have been obtained or made on or before the Closing Date and
will be in full force and effect on and after the Closing Date, (ii) the
filings referred to in Section 4.19 and (iii) consents, authorizations,
filings and notices the absence of which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
Loan Document has been duly executed and delivered on behalf of each Loan
Party party thereto. This Agreement constitutes, and each other Loan Document
upon execution will constitute, a legal, valid and binding obligation of each
Loan Party party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity
or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of
this Agreement and the other Loan Documents and, on and after the Closing Date,
the issuance of Letters of Credit, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of any Group Member and will not result in, or require, the creation
or imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents and any Liens that may be
required pursuant to the Medium Term Notes Indenture). No Requirement of Law or
Contractual Obligation applicable to U.S. Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6 LITIGATION. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of either Borrower, threatened by or against any Group Member or
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or thereby,
or (b) that could reasonably be expected to have a Material Adverse Effect.
4.7 NO DEFAULT. No Group Member is in default under or
with respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each Group Member has title
in fee simple to, or a valid leasehold interest in, all its real property, and
good title to, or a valid leasehold interest in, all its other property
necessary in the course of their respective businesses, and none of such
property is subject to any Lien except as permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. (a) Each Group Member owns, is
licensed to use or otherwise has the right to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, except to the
extent that the absence of such property could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; (b) as of
the date hereof and the date of each extension of credit, no claim has been
asserted or is
67
pending or, to the knowledge of either Borrower, threatened against such
Group Member by any Person challenging or questioning the use by such Group
Member of any Intellectual Property in a manner that could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect,
nor does either Borrower know of any reason to believe that any such claim
would be successful if brought; (c) as of the date hereof and the date of
each extension of credit, no claim has been asserted or is pending or, to the
knowledge of either Borrower, threatened against such Group Member by any
Person challenging or questioning the validity or effectiveness of any of
such Group Member's Intellectual Property in a manner that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and (d) the use of Intellectual Property by each Group Member
does not infringe on the rights of any Person in a manner that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.10 TAXES. Each Group Member has filed or caused to be filed
all Federal, state and other tax returns that are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any assessments
made against it or any of its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Group
Member), except where the failure to make any such filing or payment could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; no tax Lien has been filed, and, to the knowledge of either
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any
Loans, and no other extensions of credit hereunder, will be used for "buying" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in effect
or for any purpose that violates the provisions of the Regulations of the Board.
If requested by any Lender or either Administrative Agent, the Borrowers will
furnish to each Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form
U-1, as applicable, referred to in Regulation U.
4.12 LABOR MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against any Group Member pending or, to the
knowledge of either Borrower, threatened; (b) hours worked by and payment made
to employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has
68
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not,
as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by a material amount. Neither the
U.S. Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a material liability under ERISA, and
neither the U.S. Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the U.S. Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Except as disclosed to the Administrative
Agents by the Borrowers in writing from time to time on or after the Closing
Date (a) Schedule 4.15 sets forth the name and jurisdiction of incorporation of
each Subsidiary of the Borrowers as of the Closing Date and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party and (b) there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of any Subsidiary of the U.S. Borrower, except as created
by the Loan Documents.
4.16 USE OF PROCEEDS. The proceeds of the Term Loans and a
portion of the U.S. Revolving Loans shall be used to finance a portion of the
Acquisition, to refinance Indebtedness of the Borrowers outstanding on the
Closing Date and to pay related fees and expenses. The U.S. Letters of Credit
and the proceeds of the U.S. Revolving Loans shall be used to finance working
capital needs and for general corporate purposes of the U.S. Borrower and its
Subsidiaries in the ordinary course of business. The Canadian Letters of Credit
and the proceeds of the Canadian Revolving Loans and the Canadian Swingline
Loans shall be used to finance working capital needs and for general corporate
purposes of the Canadian Borrower and its Subsidiaries in the ordinary course of
business.
4.17 ENVIRONMENTAL MATTERS. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) each Group Member: (i) is, and within the period of all
applicable statutes of limitation has been, in compliance with all
applicable Environmental Laws; (ii) holds all Environmental Permits
(each of which is in full force and effect) required for any of its
current or intended operations or for any property owned, leased, or
otherwise operated by it; (iii) is, and within all applicable statutes
of limitation has been, in compliance with all of its Environmental
69
Permits; and (iv) reasonably believes that: each of its Environmental
Permits will be timely renewed and complied with, without material
expense; any additional Environmental Permits that may be required of
it will be timely obtained and complied with, without material expense;
and compliance with any Environmental Law that is or is expected to
become applicable to it will be timely attained and maintained, without
material expense;
(b) to the knowledge of either Borrower, Materials of
Environmental Concern are not and have not been present at, on, under,
in, or about any real property now or formerly owned, leased or
operated by any Group Member, or at any other location (including
without limitation any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment,
storage, or disposal) under conditions which could reasonably be
expected to: (i) give rise to liability of any Group Member under any
applicable Environmental Law or otherwise result in costs to any Group
Member; (ii) interfere with any Group Member's continued or planned
operations; or (iii) impair the fair saleable value of any real
property owned or leased by any Group Member;
(c) there is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which a Group Member is,
or to the knowledge of any Group Member will be, named as a party that
is pending or, to the knowledge of any Group Member, threatened;
(d) no Group Member has received any request for information,
or been notified that it is a potentially responsible party under or
relating to the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law, or
with respect to any Materials of Environmental Concern;
(e) no Group Member has entered into or agreed to any consent
decree, order, or settlement or other agreement, nor is subject to any
judgment, decree, order or other agreement in any judicial,
administrative, or arbitral forum, relating to compliance with or
liability under any applicable Environmental Law or with respect to any
Materials of Environmental Concern; and
(f) no Group Member has assumed or retained, by contract or
operation of law, any liabilities, fixed or contingent, known or
unknown, under any applicable Environmental Law or with respect to any
Materials of Environmental Concern.
4.18 ACCURACY OF INFORMATION, ETC. The statements and
information contained in this Agreement, the other Loan Documents, the
Confidential Information Memorandum and the other documents, certificates and
statements furnished by or on behalf of any Loan Party to the Administrative
Agents or the Lenders, or any of them, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, taken
as a whole, do not contain, as of the date of this Agreement, any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
70
The projections and PRO FORMA financial information contained in the
materials referenced above are based upon good faith estimates and
assumptions believed by management of the U.S. Borrower to be reasonable at
the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and
that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations and warranties
contained in the Acquisition Documentation are true and correct in all
material respects. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Administrative Agents and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.
Notwithstanding anything in this Section 4.18 to the contrary, to the extent
the foregoing representation and warranty relates to the Pillsbury Businesses
(whether the information referred to in such representation and warranty is
contained in this Agreement, the Confidential Information Memorandum, the
Acquisition Documentation or any other agreement or document referred to
herein), such representation and warranty is made by the Borrowers only to
their knowledge.
4.19 SECURITY DOCUMENTS. (a) The U.S. Guarantee and Collateral
Agreement shall be, when executed in accordance with this Agreement, effective
to create in favor of the Collateral Agent, for the benefit of the Lenders, a
legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock described in the
U.S. Guarantee and Collateral Agreement, when stock certificates representing
such Pledged Stock are delivered to the Collateral Agent, and in the case of the
other Collateral described in the U.S. Guarantee and Collateral Agreement, when
financing statements and other filings specified on Schedule 3 to the U.S.
Guarantee and Collateral Agreement in appropriate form are filed in the offices
specified on said Schedule, the U.S. Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Pledged Stock and such other Collateral
in which (x) a security interest may be perfected by filing under the applicable
Uniform Commercial Code or (y) in which a security interest may be perfected by
taking such other actions described in Schedule 3 to the U.S. Guarantee and
Collateral Agreement and the proceeds thereof, as security for the Secured
Obligations (as defined in the U.S. Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral described in the U.S. Guarantee and Collateral Agreement other than
Pledged Stock, Liens permitted by Section 7.3 which have priority by operation
of law and Liens, if any, securing the Medium Term Notes).
(b) The Canadian Collateral Agreement shall be, when executed
in accordance with this Agreement, effective to create in favor of the
Collateral Agent, for the benefit of the Canadian Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof. In the case of the Pledged Stock described in the Canadian Collateral
Agreement, when stock certificates representing such Pledged Stock are delivered
to the Collateral Agent, and in the case of the other Collateral described in
the Canadian Collateral Agreement, when financing statements and other filings
specified on Schedule 3 to the Canadian Collateral Agreement in appropriate form
are filed in the offices specified on said Schedule, the
71
Canadian Collateral Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in
the Collateral in which (x) a security interest may be perfected by filing
under the Canadian Personal Property Security legislation or (y) in which a
security interest may be perfected by taking such other actions described in
Schedule 3 to the Canadian Collateral Agreement and the proceeds thereof, as
security for the Secured Obligations (as defined in the Canadian Collateral
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Collateral described in the Canadian Collateral
Agreement, Liens permitted by Section 7.3 which have priority by operation of
law and Liens, if any, securing the Medium Term Notes).
(c) The Canadian Pledge Agreement shall be, when executed in
accordance with this Agreement, effective to create in favor of the Collateral
Agent, for the benefit of the Lenders, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. When stock
certificates representing such Pledged Securities are delivered to the
Collateral Agent and when a financing statement is registered under the PERSONAL
PROPERTY SECURITY ACT OF ONTARIO, the Canadian Pledge Agreement shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the U.S. Borrower in the Pledged Securities and the proceeds
thereof, as security for the Secured Obligations (as defined in the Canadian
Pledge Agreement), in each case prior and superior in right to any other Person
(except for Liens permitted by Section 7.3 which have priority by operation of
law and Liens, if any, securing the Medium Term Notes).
(d) The Quebec Security Documents shall be, when executed in
accordance with this Agreement, effective to create in favor of the Collateral
Agent, for the benefit of the Canadian Lenders, a legal, valid and enforceable
security interest in the Collateral described therein and proceeds thereof. In
the case of the Collateral described in the Quebec Security Documents, when
financing statements and other filings specified therein in appropriate form are
filed in the offices so specified, the Quebec Security Documents shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the pledged securities described in the
Quebec Security Document and such other Collateral as security for the Secured
Obligations (as defined in the Quebec Security Documents), in each case prior
and superior in right to any other Person (except, in the case of Collateral
described in the Quebec Security Documents, Liens permitted by Section 7.3 which
have priority by operation of law and Liens, if any, securing the Medium Term
Notes).
(e) Each of the Mortgages shall be, when executed in
accordance with this Agreement, effective to create in favor of the Collateral
Agent, for the benefit of the relevant Lenders, a legal, valid and enforceable
Lien on the Mortgaged Properties described therein and proceeds thereof, and
when the Mortgages are filed in the applicable offices of the counties in which
the Mortgaged Properties described therein are located, each such Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, as security for the Obligations or Secured Obligations (as defined in
the relevant Mortgage), as applicable, in each case prior and superior in right
to any other Person except (i) as permitted by Section 7.3 which have priority
by operation of law and (ii) Liens, if any, securing the Medium Term Notes.
Schedule 1.1A lists each parcel of real property in the United States and Canada
owned in fee simple by the U.S. Borrower or any of its Subsidiaries as of the
date hereof.
72
4.20 SOLVENCY. Each Loan Party is, and after giving effect to
the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 REGULATION H. No Mortgage encumbers improved real
property that is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
4.22 CERTAIN DOCUMENTS. The Borrowers have delivered to each
Administrative Agent a complete and correct copy of the Medium Term Notes
Indenture, including any amendments, supplements or modifications with respect
thereto.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction on or before November 30, 2001, prior to or
concurrently with the making of such extension of credit on the Closing Date of
the following conditions precedent:
(a)
CREDIT AGREEMENT; GUARANTEE AND COLLATERAL AGREEMENT. Each
Administrative Agent shall have received (i) this Agreement, executed
and delivered by the Administrative Agents and the Borrowers, (ii) the
U.S. Guarantee and Collateral Agreement, executed and delivered by the
U.S. Borrower and each Subsidiary Guarantor, (iii) the Canadian
Collateral Agreement, executed and delivered by the Canadian Borrower,
and each Canadian Subsidiary Guarantor, (iv) an Acknowledgement and
Consent in the form attached to each Guarantee and Collateral
Agreement, executed and delivered by each Issuer (as defined therein),
if any, that is not a Loan Party, (v) the Canadian Pledge Agreement,
executed and delivered by the U.S. Borrower, (vi) the Quebec Security
Documents, executed and delivered by the Canadian Borrower and each
Canadian Subsidiary Guarantor that owns property located in the
Province of Quebec, Canada and (vii) a Lender Addendum executed and
delivered by each Lender and accepted by the Borrowers and the
Administrative Agent.
(b) ACQUISITION, ETC. The following transactions shall have
been consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:
(i) the U.S. Borrower shall have consummated the
acquisition of (A) the Pillsbury Retail Business and the
Pillsbury Foodservice Business (each as defined in the
Acquisition Agreement) from The Pillsbury Company and (B) the
Xxxxx Xxxx Business (as defined in the Acquisition Agreement)
from General Xxxxx, in each case pursuant to the Acquisition
Documentation (the "ACQUISITION"), and the U.S. Borrower shall
have delivered to the Administrative Agents a complete and
correct copy of the Acquisition Documentation;
(ii) the U.S. Borrower shall have received at
least $200,000,000 in gross cash proceeds from the issuance of
the Senior Notes or, as the case may be,
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pursuant to the Bridge Facility, and the U.S. Borrower shall
have delivered to the Administrative Agents a complete and
correct copy of the Senior Note Indenture, or, as the case
may be, the Bridge Facility Loan Documentation; and
(iii) the Administrative Agents shall have
received satisfactory evidence that (A)(1) the Existing Credit
Facilities and the Existing Canadian Securitization shall have
been terminated and all amounts thereunder shall have been
paid in full and (2) satisfactory arrangements shall have been
made for the termination of all Liens granted in connection
therewith, (B) either (1) all Medium Term Notes outstanding
immediately prior to the Closing Date shall have been paid in
full and cancelled or (2) (x) the U.S. Borrower shall have
commenced at least 30 days prior to the Closing Date a tender
offer for the purchase of all the Medium Term Notes at a price
equal to 100% of the principal amount thereof provided that
each tendering holder thereof consents to the elimination from
the Medium Term Notes Indenture of any covenants contained
therein that would otherwise require that the Medium Term
Notes be guaranteed and secured equally and ratably with the
Obligations to the extent required pursuant to the terms
thereof (the "EQUAL AND RATABLE COVENANT") or shall have in
good faith made a bona fide offer to each holder of Medium
Term Notes to repurchase all its Medium Term Notes at a price
equal to 100% of the principal amount thereof provided that
such holder consents to the elimination of the Equal and
Ratable Covenant and (y) all Medium Term Notes tendered prior
to the Closing Date pursuant to such tender offer shall have
been paid in full and cancelled or, as the case may be, all
Medium Term Notes with respect to which such bona fide offer
shall have been accepted prior to the Closing Date shall have
been paid in full and cancelled (and, in the case of each
Medium Term Note so paid in full as described in this clause
(y), the holder thereof shall have consented to the
elimination of the Equal and Ratable Covenant) and (C) if any
Medium Term Notes remain outstanding on the Closing Date, the
Medium Term Notes Indenture shall have been amended to
eliminate the Equal and Ratable Covenant or, if the U.S.
Borrower shall have been unable to obtain the consent of a
sufficient number of holders of the Medium Term Notes to
eliminate the Equal and Ratable Covenant, the U.S. Borrower
and its Subsidiaries shall have entered into such security
documents and other instruments (including an intercreditor
agreement with the Collateral Agent) as shall be necessary to
comply with the Equal and Ratable Covenant (each of which
security documents and instruments shall be satisfactory in
form and substance to the Administrative Agents).
(c) COMPLIANCE CERTIFICATE; FINANCIAL STATEMENTS. The Lenders
shall have received (i) a Compliance Certificate of a Responsible
Officer of the U.S. Borrower confirming to the satisfaction of each of
the Administrative Agents, and including reasonably detailed support
for the calculations included therein, that the ratio of Consolidated
Total Debt on June 2, 2001 to Consolidated EBITDA for the period of
twelve consecutive months ended June 2, 2001 (adjusted to give effect
to the Acquisition and the financing thereof as if the Acquisition and
such financing had occurred on the first day of such period and as if
the twelve-month period for the Pillsbury Foodservice Business and the
Pillsbury Retail Business (each such term as defined in the Acquisition
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Agreement, collectively, the "PILLSBURY Businesses") that ended on June
30, 2001 had ended on June 2, 2001 and the twelve-month period for the
Xxxxx Xxxx Business that ended on May 26, 2001 had ended on June 2,
2001) is not greater than 4.0 to 1.0, (ii) unaudited interim
consolidated financial statements of the U.S. Borrower and its
consolidated Subsidiaries and unaudited interim income statements of
the businesses acquired by the U.S. Borrower pursuant to the
Acquisition for each fiscal quarterly period ended subsequent to the
date of the latest applicable financial statements delivered pursuant
to Section 4.1(b) as to which such financial statements are available,
and such financial statements shall not, in the reasonable judgment of
the Lenders, reflect any material adverse change in the consolidated
financial condition of the U.S. Borrower and its consolidated
Subsidiaries, as a whole, or of the business acquired by the U.S.
Borrower pursuant to the Acquisition, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum, (iii) the audited combined schedules of direct earnings
before interest and taxes of the Pillsbury Businesses for the fiscal
years ended June 30, 1999, 2000 and 2001 which present fairly in all
material respects the results of operations of the Pillsbury Businesses
for the periods set forth therein and (iv) the unaudited pro forma
consolidated balance sheet of the U.S. Borrower and its consolidated
Subsidiaries as of September 1, 2001 (including the notes thereto) (the
"UPDATED PRO FORMA BALANCE SHEET"), and the unaudited pro forma
statement of operations of the U.S. Borrower and its consolidated
Subsidiaries for the six month period ended September 1, 2001
(including the notes thereto) (the "UPDATED PRO FORMA STATEMENT OF
OPERATIONS"), in each case prepared to give effect (as if such events
had occurred on such date, in the case of the Updated Pro Forma Balance
Sheet, or as if such events had occurred on March 1, 2000 but based on
six months of operations of the U.S. Borrower ended on September 1,
2001, of the Pillsbury Businesses ended on June 30, 2001 and of the
Xxxxx Xxxx Business (as defined in the Acquisition Agreement) (as
estimated) ended on May 26, 2001, in the case of the Updated Pro Forma
Statement of Operations) to (i) the consummation of the Acquisition,
(ii) the Loans to be made and the Senior Notes to be issued or, as the
case may be, the loans to be made under the Bridge Facility on the
Closing Date and the use of proceeds thereof and (iii) the payment of
fees and expenses in connection with the foregoing, and the financial
information contained in the Updated Pro Forma Balance Sheet and
Updated Pro Forma Statement of Operations shall not materially and
adversely differ from the financial information disclosed by the U.S.
Borrower to the Lenders on September 17, 2001.
(d) APPROVALS. The Provisional Consent Decree shall have been
accepted for public comments by the FTC and shall name the U.S.
Borrower as an acceptable purchaser of the Pillsbury Retail Business
and the Pillsbury Foodservice Business (each as defined in the
Acquisition Agreement), or the acquisition of the Pillsbury Retail
Business and the Pillsbury Foodservice Business by the U.S. Borrower
shall otherwise have been approved by the FTC; and all other
governmental and third party approvals (including landlords' and other
consents but excluding any consents in respect of non-material third
party approvals) necessary in connection with the Acquisition, the
continuing operations of the Group Members and the transactions
contemplated hereby shall have been obtained and be in full force and
effect.
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(e) LIEN SEARCHES. The Administrative Agents shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Loan Parties
except for liens permitted by Section 7.3 or discharged on or prior to
the Closing Date pursuant to documentation satisfactory to the
Administrative Agents.
(f) ENVIRONMENTAL MATTERS. The Administrative Agents shall
have completed and shall be satisfied in all material respects with an
environmental due diligence investigation of the U.S. Borrower, its
Subsidiaries and the businesses acquired pursuant to the Acquisition.
(g) FEES. The Lenders, the Arranger and the Administrative
Agents shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel), on or before the
Closing Date. All such amounts will be paid with proceeds of Loans made
on the Closing Date and will be reflected in the funding instructions
given by the relevant Borrower to the relevant Administrative Agent on
or before the Closing Date.
(h) CLOSING CERTIFICATE. The Administrative Agents shall have
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(i) LEGAL OPINIONS. The Administrative Agents shall have
received the following executed legal opinions:
(i) the legal opinion of Faegre & Xxxxxx, counsel
to the U.S. Borrower and its Subsidiaries, in form and
substance reasonably satisfactory to the Administrative
Agents;
(ii) the legal opinion of Stikeman Elliott, Canadian
counsel to the Canadian Borrower and its Subsidiaries, in form
and substance reasonably satisfactory to the Administrative
Agents;
(iii) the legal opinion of Xxxxx X. Xxxxxxx, general
counsel of the U.S. Borrower and its Subsidiaries, in form
and substance reasonably satisfactory to the Administrative
Agents;
(iv) the legal opinion of Xxxxxxxx, Xxxxxx &
Finger, P.A., Delaware counsel to the U.S. Borrower and its
Subsidiaries, in form and substance reasonably satisfactory
to the Administrative Agents; and
(v) the legal opinion of local counsel to the U.S.
Borrower in each of Connecticut, California, Texas, Kansas,
Colorado and Quebec, and of such other special and local
counsel as may be required by the Administrative Agents, each
of which legal opinions shall cover matters relating to the
Collateral and shall be in form and substance reasonably
satisfactory to the Administrative Agents.
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Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agents may reasonably require.
(j) PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES. (i) The U.S.
Administrative Agent shall have received (A) the certificates
representing the shares of Capital Stock pledged pursuant to the U.S.
Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (B) each promissory note (if any)
pledged to the U.S. Administrative Agent pursuant to the U.S. Guarantee
and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor
thereof.
(ii) The Canadian Administrative Agent shall have received
(A) the certificates representing the shares of Capital Stock pledged
pursuant to the Canadian Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof and (B) each promissory note
(if any) pledged to the Canadian Administrative Agent pursuant to the
Canadian Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor
thereof.
(k) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including any Uniform Commercial Code or Personal Property Security
Act (Ontario) financing statement) required by the Security Documents
or under law (including the law of the Province of Quebec) or
reasonably requested by the Collateral Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent, for the
benefit of the relevant Lenders, a perfected Lien on the Collateral
described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 7.3),
shall be in proper form for filing, registration or recordation.
(l) MORTGAGES, ETC. (i) The Collateral Agent shall have
received a Mortgage with respect to each of the Mortgaged Properties,
executed and delivered by a duly authorized officer of each party
thereto.
(ii) If requested by the Collateral Agent, the Collateral
Agent shall have received, and the title insurance company issuing the
policy referred to in clause (iii) below (the "TITLE INSURANCE
COMPANY") shall have received, maps or plats of an as-built survey of
the sites of the applicable Mortgaged Properties certified to the
Collateral Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Collateral Agent
and the Title Insurance Company by an independent professional licensed
land surveyor satisfactory to the Collateral Agent and the Title
Insurance Company, which maps or plats and the surveys on which they
are based shall 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 1992 (or equivalent thereof satisfactory to
the Collateral Agent), and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps, plats or
surveys the following: (A) the locations on such sites of all the
buildings, structures and other improvements and the
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established building setback lines; (B) the lines of streets abutting
the sites and width thereof; (C) all access and other easements
appurtenant to the sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the building
structures and improvements on the sites; (F) if the site is described
as being on a filed map, a legend relating the survey to said map; and
(G) the flood zone designations, if any, in which such Mortgaged
Properties are located.
(iii) The Collateral Agent shall have received in respect
of each applicable Mortgaged Property a mortgagee's title insurance
policy (or policies) (or equivalent thereof satisfactory to the
Collateral Agent) or marked up unconditional binder for such insurance.
Each such policy shall (A) be in an amount satisfactory to the
Collateral Agent; (B) be issued at ordinary rates; (C) insure that the
applicable Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein; (D) name the Collateral Agent for the
benefit of the relevant Lenders as the insured thereunder; (E) be in
the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent thereof satisfactory to the Collateral Agent); (F) contain
such endorsements and affirmative coverage as the Collateral Agent may
reasonably request and (G) be issued by title companies satisfactory to
the Collateral Agent (including any such title companies acting as
co-insurers or reinsurers, at the option of the Collateral Agent). The
Collateral Agent shall have received evidence satisfactory to it that
all premiums in respect of each such policy, all charges for mortgage
recording tax, and all related expenses, if any, have been paid.
(iv) If requested by the Collateral Agent, the Collateral
Agent shall have received (A) a policy of flood insurance that (1)
covers any parcel of improved real property that is encumbered by any
Mortgage applicable (2) is written in an amount not less than the
outstanding principal amount of the indebtedness secured by such
Mortgage that is reasonably allocable to such real property or the
maximum limit of coverage made available with respect to the particular
type of property under the National Flood Insurance Act of 1968,
whichever is less, and (3) has a term ending not later than the
maturity of the Indebtedness secured by such Mortgage and (B)
confirmation that the U.S. Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Collateral Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in clause (iii) above and a
copy of all other material documents affecting the applicable Mortgaged
Properties.
(m) INSURANCE. The Collateral Agent shall have received
insurance certificates satisfying the requirements of Section 5.2(b) of
the applicable Guarantee and Collateral Agreement.
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5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (except to the
extent such representation and warranties expressly refer to an earlier
date, in which case they shall be true and correct in all material
respects as of such earlier date).
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by, submission of a notice of borrowing and issuance of a Letter
of Credit on behalf of either Borrower hereunder shall constitute a
representation and warranty by such Borrower as of the date of such extension of
credit that the conditions contained in this Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrowers hereby jointly and severally agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or either Administrative Agent
hereunder, each Borrower shall and shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to each
Administrative Agent and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the U.S. Borrower, a copy of the
audited consolidated balance sheet of the U.S. Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year (PROVIDED that the delivery of the U.S. Borrower's
annual report on Form 10-K shall satisfy the foregoing requirement)
reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
KPMG LLP or other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each quarterly period of each fiscal year of the
U.S. Borrower, the unaudited consolidated balance sheet of the U.S.
Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form for the 2003 fiscal year and each subsequent fiscal
year the figures for the previous year, certified by a Responsible
Officer of the U.S. Borrower as being fairly stated in all material
respects (subject to normal year-end
79
adjustments), PROVIDED that (x) the delivery of the U.S. Borrower's
quarterly report on form 10-Q shall satisfy the requirement of this
Section 6.1(b) in respect of each of the first three quarterly
periods of each fiscal year of the U.S. Borrower and (y) the
delivery of the U.S. Borrower's quarterly earnings release
(including schedules detailing the unaudited consolidated condensed
balance sheet of the U.S. Borrower and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited consolidated
statement of income for such quarter) shall satisfy the requirement
of this Section 6.1(b) in respect of the fourth quarter of each
fiscal year of the U.S. Borrower.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except for the absence of footnotes in the case of unaudited statements
and except as approved by such accountants or officer, as the case may be, and
disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to each
Administrative Agent and each Lender (or, in the case of clause (h), to the
relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1(a) and (b), (i) a certificate of a Responsible
Officer of the U.S. Borrower stating that, to the best of each such
Responsible Officer's knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other
Loan Documents to which it is a party 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, (ii) (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by
the Borrowers with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the U.S.
Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agents, a listing of any change in name
or jurisdiction of organization of any Loan Party, of any county, state
or province within the United States or Canada where any Loan Party
keeps inventory or equipment and of any Intellectual Property (except
for (A) rights licensed to such Loan Party pursuant to licenses for (1)
computer software, or (2) patents, copyrights, trademarks, service
marks, technology, know-how and/or processes which are embedded in
equipment or fixtures, and (B) copyrights, trademarks, service marks,
trade dress, technology, know-how, inventions and/or processes for
which no steps have been taken to obtain registrations or patents)
acquired by any Loan Party since the date of the most recent list
delivered pursuant to this clause (y) (or, in the case of the first
such list so delivered, since the Closing Date) and (iii) for each
fiscal quarter of the U.S. Borrower subsequent to the Closing Date for
which such information is available (and otherwise based on good faith
80
estimates for the Pillsbury Food Service Business consistent with prior
years' performance), an updated Schedule 7.1 to this Agreement which
shall reflect any additional available information for the Acquired
Businesses to complete such Schedule up to and including the fourth
fiscal quarter of the U.S. Borrower ending on or about February 28,
2002;
(c) as soon as available, and in any event no later than 30
days after the end of each fiscal year of the U.S. Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the U.S. Borrower and its
Subsidiaries as of the end of each fiscal quarter of the following
fiscal year, the related quarterly consolidated statements of projected
cash flow and projected income and a description of the underlying
assumptions (including assumptions with respect to Capital
Expenditures)) applicable thereto (the "PROJECTIONS"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer of the U.S. Borrower stating that such Projections
are based on reasonable estimates, information and assumptions and that
such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
(d) within 45 days after the end of each of the first three
fiscal quarters of the U.S. Borrower or within 90 days after the U.S.
Borrower's fiscal year end, (i) a narrative discussion and analysis of
the results of operations of the U.S. Borrower and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, as compared (in
the case of fiscal quarters occurring during the U.S. Borrower's 2003
fiscal year and subsequent fiscal years) to the portion of the
Projections covering such periods and (ii) for so long the Conversion
Date (as defined in the Acquisition Agreement) has not occurred, but
including the fiscal quarter in which the Conversion Date occurs, a
report as to the progress of (A) the integration of the Pillsbury
Businesses into the business of the U.S. Borrower and its Subsidiaries,
including the services covered by the Transition Services Agreement and
(B) the transition of the manufacturing business of the Pillsbury
Businesses into the manufacturing business of the U.S. Borrower and its
Subsidiaries, including the services covered by the Conversion Plan
Agreement.
(e) (i) no later than 5 Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with
respect to the Senior Note Indenture or, as the case may be, the Bridge
Facility Loan Agreement and (ii) no later than 5 Business Days after
the effectiveness thereof, copies of any amendment, supplement, waiver
or other modification with respect to the Acquisition Documentation;
(f) within five days after the same are sent, copies of all
financial statements and reports that the U.S. Borrower sends to the
holders of any class of its debt securities or public equity securities
and, within five days after the same are filed, copies of all financial
statements and reports that the U.S. Borrower may make to, or file
with, the SEC;
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(g) promptly upon receipt thereof, copies of all final reports
submitted to either Borrower by independent certified public
accountants in connection with each annual, interim or special
financial audit of the books of such Borrower made by such accountants,
including without limitation, any final comment letter submitted by
such accountants to management in connection with their annual audit;
and
(h) promptly, such additional financial and other information
as the U.S. Administrative Agent on behalf of any Lender may from time
to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the relevant Group Member; provided that any failure to
pay Indebtedness shall only constitute an Event of Default as provided in
Section 8(e).
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a)(i) Preserve,
renew and keep in full force and effect its organizational existence and (ii)
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records upon reasonable
prior notice, at any reasonable time and as often as may reasonably be desired
and to discuss the business, operations, properties and financial and other
condition of the Group Members with officers and employees of the Group Members
and with their independent certified public accountants.
6.7 NOTICES. Promptly give notice to each
Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
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(b) any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member
(i) in which the amount involved is $5,000,000 or more and not covered
by insurance, (ii) in which injunctive or similar relief is sought or
(iii) which relates to any Loan Document;
(d) the U.S. Borrower or any of its Subsidiaries becoming
liable for remediation and/or environmental compliance expenses and/or
fines, penalties or other charges which, in the aggregate, could
reasonably be expected to result in payments by the U.S. Borrower and
its Subsidiaries (other than with the proceeds of insurance) having a
present value (based upon then applicable ABR) in excess of $5,000,000;
(e) the following events, as soon as possible and in any event
within 30 days after the U.S. Borrower knows thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien
in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the U.S. Borrower or any Commonly Controlled Entity or
any Multiemployer Plan to effectuate a withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and
(f) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.
6.8 ENVIRONMENTAL MANAGEMENT. (a) Comply in all material
respects with, and undertake all reasonable efforts to ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Handle, store, and otherwise manage Materials of
Environmental Concern, and undertake all reasonable efforts to ensure that all
tenants, subtenants, and others handle, store, and otherwise manage Materials of
Environmental Concern, in a manner that does not, and is not reasonably likely
to: (i) give rise to any material liability (including any material exacerbation
of any existing condition) of any Group Member under any applicable
Environmental Law; or (ii) materially impair the fair saleable value (including
any material exacerbation of any existing condition) of any real property owned
by any Group Member.
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(c) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
(d) No more than 120 days, but not less than 30 days, prior to
the acquisition by any Group Member of the Toledo Facility from General Xxxxx,
deliver to the Administrative Agents, an updated environmental assessment in
respect of the Toledo Facility in scope, form and substance reasonably
satisfactory to the Administrative Agents.
6.9 ADDITIONAL COLLATERAL, ETC. (a) With respect to any
property acquired after the Closing Date by any Group Member (other than (x) any
property described in paragraph (b) (or which would have been described in
paragraph (b) but for the dollar threshold therein), (c), (d) or (e) below and
(y) any property subject to a Lien expressly permitted by Section 7.3(g)) as to
which the Collateral Agent, for the benefit of the relevant Lenders, does not
have a perfected Lien, promptly (i) execute and deliver to the Collateral Agent
such amendments to the relevant Guarantee and Collateral Agreement or such other
documents as the Collateral Agent deems necessary or advisable to grant to the
Collateral Agent, for the benefit of the relevant Lenders, a security interest
in such property and (ii) take all actions necessary or advisable to grant to
the Collateral Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of such financing
statements in such jurisdictions as may be required by the relevant Guarantee
and Collateral Agreement or by law or as may be requested by the Collateral
Agent. Notwithstanding anything herein to the contrary, with respect to (A)
Intellectual Property of any Group Member which arises under laws of countries
(or political subdivisions thereof) other than the United States or Canada, such
Group Member shall not be required to comply with the foregoing obligations, and
(B) non-material Intellectual Property licensed to any Group Member (other than
any such Intellectual Property licensed pursuant to the Acquisition
Documentation), such Group Member shall not be required to comply with the
foregoing obligations to the extent that (1) such Group Member does not have the
right under the applicable license or under applicable law to comply with such
obligations for such property, or (2) doing so would impair the value of such
property or otherwise subject such Group Member to material penalties or
liability.
(b) (i) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $1,000,000
acquired after the date hereof by any Group Member (other than any such real
property subject to a Lien expressly permitted by Section 7.3(g)), promptly (or,
in the case of any such interest acquired prior to the Closing Date, on the
Closing Date) and (ii) within 45 days after the acquisition by any Group Member
of the Toledo Facility from General Xxxxx, (A) execute and deliver a first
priority Mortgage, in favor of the Collateral Agent, for the benefit of the
relevant Lenders, covering such real property, (B) if requested by the
Collateral Agent, provide such Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Collateral Agent) as well as a current ALTA survey
thereof or equivalent thereof satisfactory to the Collateral Agent, together
with a surveyor's certificate, (y) any consents or estoppels reasonably deemed
necessary or advisable by the Collateral Agent in connection with such Mortgage,
each of the foregoing in form and substance reasonably satisfactory to the
Collateral Agent and (z) environmental reports
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or other evidence reasonably satisfactory to the Collateral Agent as to any
potential liabilities under Environmental Laws associated with such real
property and (C) if requested by the Collateral Agent, deliver to the
Collateral Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by any Group
Member (which, for the purposes of this paragraph (c), shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), promptly
(i) execute and deliver to the Collateral Agent such amendments to the U.S.
Guarantee and Collateral Agreement as the Collateral Agent deems necessary or
advisable to grant to the Collateral Agent, for the benefit of the U.S. Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by any Group Member, (ii) deliver to the Collateral
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the relevant Group Member, (iii) cause such new Subsidiary (A) to become a party
to the U.S. Guarantee and Collateral Agreement, (B) to take such actions
necessary or advisable to grant to the Collateral Agent for the benefit of the
U.S. Lenders a perfected first priority security interest in the Collateral
described in the U.S. Guarantee and Collateral Agreement with respect to such
new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the U.S. Guarantee and
Collateral Agreement or by law or as may be requested by the Collateral Agent
and (C) to deliver to the Collateral Agent a certificate of such Subsidiary,
substantially in the form of Exhibit C, with appropriate insertions and
attachments, and (iv) if requested by the Collateral Agent, deliver to the
Collateral Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by any Group Member (other than by
any Group Member that is an Excluded Foreign Subsidiary), promptly (i) execute
and deliver to the Collateral Agent such amendments to the U.S. Guarantee and
Collateral Agreement as the Collateral Agent deems necessary or advisable to
grant to the Collateral Agent, for the benefit of the U.S. Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by any such Group Member (provided that in no event shall more
than 66% of the total outstanding voting Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Collateral Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, and take such other action as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the Collateral Agent's
security interest therein, and (iii) if requested by the Collateral Agent,
deliver to the Collateral Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.
(e) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by any Group Member, promptly (i)
execute and deliver to the Collateral Agent such amendments to the Canadian
Collateral Agreement as the Collateral Agent deems
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necessary or advisable to grant to the Collateral Agent, for the benefit of
the Canadian Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by any Group Member, (ii)
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered
by a duly authorized officer of the relevant Group Member, (iii) cause such
new Subsidiary (A) to become a party to the Canadian Collateral Agreement,
(B) to take such actions necessary or advisable to grant to the Collateral
Agent for the benefit of the Lenders a perfected first priority security
interest in the Collateral described in the Canadian Collateral Agreement
with respect to such new Subsidiary, including the filing of Personal
Property Security Act (Ontario) financing statements in such jurisdictions as
may be required by the Canadian Collateral Agreement or by law or as may be
requested by the Collateral Agent and (C) to deliver to the Collateral Agent
a certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments, (iv) cause such new Subsidiary
to become a Guarantor under and as defined in the U.S. Guarantee and
Collateral Agreement of the Obligations of the Canadian Borrower, and (v) if
requested by the Collateral Agent, deliver to the Collateral Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Collateral Agent.
(f) If all of the Capital Stock of 985079 Ontario, Inc. shall
not have been sold on or before December 31, 2001 to a Person other than the
U.S. Borrower and/or its Subsidiaries, it shall become a party to the Canadian
Collateral Agreement on or before such date and shall become a Guarantor under
and as defined in the U.S. Guarantee and Collateral Agreement of the Obligations
of the Canadian Borrower and for all purposes under this Agreement and the other
Loan Documents.
(g) If at any time after the Closing Date the available funds
on deposit in any Deposit Account (as defined in the Guarantee and Collateral
Agreements) of any Group Member shall exceed $1,000,000 for ten or more
consecutive Business Days, promptly but in any event within 60 days, (i) execute
and deliver to the Collateral Agent such amendments to the applicable Guarantee
and Collateral Agreement as the Collateral Agent deems necessary or advisable to
grant to the Collateral Agent, for the benefit of the Lenders, a perfected first
priority security interest in such Deposit Account, (ii) take such actions
necessary or advisable to grant to the Collateral Agent for the benefit of the
Lenders a perfected first priority security interest in such Deposit Account,
including, with respect to any such Deposit Account held in the United States,
to take such actions to cause the Collateral Agent to obtain "control" (within
the meaning of the applicable Uniform Commercial Code) and (iii) if requested by
the Collateral Agent, deliver to the Collateral Agent legal opinions relating to
the matters described above, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Collateral Agent.
SECTION 7. NEGATIVE COVENANTS
The Borrowers hereby jointly and severally agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or either Administrative Agent
hereunder, each Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
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(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the U.S. Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
Q4 of '02, Q1, Q2 and Q3 of '03 4.50 to 1
Q4 of '03 and Q1 of `04 4.25 to 1
Q2 and Q3 of '04 4.00 to 1
Q4 of '04, Q1, Q2 and Q3 of '05 3.50 to 1
Q4 of '05, Q1, Q2 and Q3 of '06 3.00 to 1
Q4 of '06 and thereafter 2.50 to 1
PROVIDED that for the purposes of determining the ratio described above for the
fiscal quarters of the U.S. Borrower ending on or about February 28, 2002, May
31, 2002 and August 31, 2002, Consolidated EBITDA for the fiscal quarters listed
on Schedule 7.1 shall be deemed to be the respective amounts thereof set forth
on such Schedule.
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the U.S. Borrower ending with any fiscal quarter set forth below to
be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Leverage Ratio
-------------- --------------
Q4 of '02 and Q1, Q2 and Q3 of '03 2.25 to 1
Q4 of '03 and Q1, Q2 and Q3 of '04 2.50 to 1
Q4 of '04 and Q1, Q2 and Q3 of '05 2.75 to 1
Q4 of '05 and thereafter 3.00 to 1
PROVIDED that for the purposes of determining the ratio described above for the
fiscal quarters of the U.S. Borrower ending on or about February 28, 2002, May
31, 2002 and August 31, 2002, (i) Consolidated Interest Expense for the relevant
period shall be deemed to equal Consolidated Interest Expense for such fiscal
quarter (and, in the case of the latter two such determinations, each previous
fiscal quarter commencing after the Closing Date) MULTIPLIED BY 4, 2 and 4/3,
87
respectively, and (ii) Consolidated EBITDA for the fiscal quarters listed on
Schedule 7.1 shall be deemed to be the respective amounts thereof set forth on
such Schedule.
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the U.S. Borrower (or, if less, the number of full fiscal
quarters subsequent to the Closing Date) ending with any fiscal quarter set
forth below to be less than the ratio set forth below opposite such fiscal
quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
Q4 of '02 and Q1, Q2, Q3 and 1.20 to 1
Q4 of '03 and Q1, Q2 and Q3 of `04
Q4 of '04 and Q1, Q2 and Q3 of '05 1.25 to 1
Q4 of '05 and thereafter 1.30 to 1
PROVIDED that for the purposes of determining the ratio described above for the
fiscal quarters of the U.S. Borrower ending on or about February 28, 2002, May
31, 2002 and August 31, 2002, (i) Consolidated Interest Expense for the relevant
period shall be deemed to equal Consolidated Interest Expense for such fiscal
quarter (and, in the case of the latter two such determinations, each previous
fiscal quarter commencing after the Closing Date) MULTIPLIED BY 4, 2 and 4/3,
respectively, and (ii) Consolidated EBITDA, Consolidated Lease Expense, Capital
Expenditures and scheduled principal payments on account of Indebtedness for the
fiscal quarters listed on Schedule 7.1 shall be deemed to be the respective
amounts thereof set forth on such Schedule.
7.2 INDEBTEDNESS. Create, issue, incur, assume,
become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) (i) Indebtedness of the U.S. Borrower to any of its
Subsidiaries and of any U.S. Wholly Owned Subsidiary Guarantor to the
U.S. Borrower or any of its Subsidiaries, (ii) Indebtedness of the
Canadian Borrower to any of its Subsidiaries and of any Canadian Wholly
Owned Subsidiary Guarantor to the Canadian Borrower or to any of its
Subsidiaries, (iii) Indebtedness of the U.S. Borrower to any of its
Subsidiaries and of any Subsidiary of the U.S. Borrower to the U.S.
Borrower or to any other Subsidiary of the U.S. Borrower constituting
the deferred purchase price of inventory acquired in the ordinary
course of business consistent with prior practice and (iv) Indebtedness
of any Subsidiary of the U.S. Borrower to the U.S. Borrower or to any
other Subsidiary of the U.S. Borrower not otherwise permitted by this
clause (b) in an aggregate principal amount (for all such
Subsidiaries), when added to the then outstanding Guarantee Obligations
permitted under Section 7.2(c)(iii), not to exceed $15,000,000 (or, in
the case of any Indebtedness that is denominated in Canadian Dollars,
the Dollar Equivalent thereof) at any time outstanding;
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(c) Guarantee Obligations incurred in the ordinary course of
business by (i) the U.S. Borrower or any of its Subsidiaries of
Indebtedness of the U.S. Borrower or any U.S. Wholly Owned Subsidiary
Guarantor, (ii) the Canadian Borrower or any of its Subsidiaries of
Indebtedness of the Canadian Borrower or any Canadian Wholly Owned
Subsidiary Guarantor and (iii) the U.S. Borrower or any of its
Subsidiaries that are not permitted by either clause (i) or clause (ii)
of this paragraph (c), PROVIDED that the aggregate amount of all such
Guarantee Obligations incurred as permitted by this clause (iii), when
added to the aggregate amount of the then outstanding Indebtedness
permitted under Section 7.2(b)(iv), shall not exceed $15,000,000 (or,
in the case of any Guarantee Obligations that are denominated in
Canadian Dollars, the Dollar Equivalent thereof) at any time
outstanding;
(d) (i) Indebtedness outstanding on the date hereof and either
listed on Schedule 7.2(d) or that is required to be repaid on the
Closing Date pursuant to Section 5.1(b)(iii) and (ii) the Medium Term
Notes.
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $5,000,000 at any one time
outstanding;
(f) (i) Indebtedness of the U.S. Borrower in respect of the
Senior Notes or, as the case may be, the Bridge Facility in an
aggregate principal amount not to exceed $200,000,000 and (ii)
Guarantee Obligations of any U.S. Subsidiary Guarantor in respect of
such Indebtedness;
(g) Hedge Agreements, PROVIDED that (i) such Hedge Agreement
relating to interest rates may only be entered into in respect of
Indebtedness otherwise permitted hereby that bears interest at a
floating rate and (ii) no such Hedge Agreement may be entered into for
speculative purposes; and
(h) additional unsecured Indebtedness in an aggregate amount
not to exceed $5,000,000.
7.3 LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, whether now owned or hereafter acquired,
except:
(a) Liens for taxes, assessments or governmental charges not
yet due or that are being contested in good faith by appropriate
proceedings, PROVIDED that adequate reserves with respect thereto are
maintained on the books of the U.S. Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith by appropriate proceedings;
(c) pledges, deposits or other Liens in connection with
workers' compensation, unemployment insurance and other social security
legislation;
89
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
U.S. Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof and either listed on
Schedule 7.3(f) or securing Indebtedness permitted by Section 7.2(d)
that is required to be repaid on the Closing Date pursuant to Section
5.1(b)(iii) and, in accordance with Section 5.1(b)(iii)(C), Liens on
the assets covered by the security documents that secure the Medium
Term Notes equally and ratably with the Obligations to the extent
required pursuant to the terms of the Medium Term Notes Indenture;
(g) Liens securing Indebtedness of the U.S. Borrower or any
Subsidiary thereof incurred pursuant to Section 7.2(e) to finance the
acquisition of fixed or capital assets, PROVIDED that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is
not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the U.S. Borrower or any Subsidiary thereof in the ordinary
course of its business and covering only the assets so leased; and
(j) Permitted Canadian Real Property Liens.
7.4 FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially
all of its property or business, except that:
(a) (i) any Subsidiary of the U.S. Borrower (other than the
Canadian Borrower or any of its Subsidiaries) may be merged or
consolidated with or into the U.S. Borrower (PROVIDED that the U.S.
Borrower shall be the continuing or surviving corporation) or with or
into any U.S. Wholly Owned Subsidiary Guarantor (PROVIDED that such
U.S. Wholly Owned Subsidiary Guarantor shall be the continuing or
surviving corporation) and (ii) any Subsidiary of the Canadian Borrower
may be merged or consolidated with or into the Canadian Borrower
(PROVIDED that the Canadian Borrower shall be the continuing or
surviving corporation) or with or into any Canadian Wholly Owned
Subsidiary Guarantor (PROVIDED that such Canadian Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation);
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(b) (i) any Subsidiary of the U.S. Borrower may Dispose of any
or all of its assets (A) to the U.S. Borrower or any U.S. Wholly Owned
Subsidiary Guarantor (upon voluntary liquidation or otherwise) or (B)
pursuant to a Disposition permitted by Section 7.5 and (ii) any
Subsidiary of the Canadian Borrower may Dispose of any or all of its
assets (A) to the Canadian Borrower or any Canadian Wholly Owned
Subsidiary Guarantor (upon voluntary liquidation or otherwise) or (B)
pursuant to a Disposition permitted by Section 7.5; and
(c) any acquisition permitted under Section 7.8(f) or (j) may
be consummated by merger or consolidation with or into the U.S.
Borrower or any Subsidiary thereof (PROVIDED that the U.S. Borrower
shall be the continuing or surviving corporation in any such merger
involving the U.S. Borrower).
7.5 DISPOSITION OF PROPERTY. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions (i) permitted by Section 7.4(b) and (ii) in
connection with Investments permitted by Section 7.8;
(d) (i) the sale or issuance of the Capital Stock of any
Subsidiary of the U.S. Borrower to the U.S. Borrower or any U.S.
Wholly Owned Subsidiary Guarantor and (ii) the sale or issuance of the
Capital Stock of any Subsidiary of the Canadian Borrower to the
Canadian Borrower or any Canadian Wholly Owned Subsidiary Guarantor;
(e) the Disposition of other property having a fair market
value not to exceed $25,000,000 in the aggregate during any fiscal
year of the U.S. Borrower; and
(f) the sale of the Canadian Borrower's manufacturing facility
located in Xxxxxxxxxxx, Xxxxxxx, Xxxxxx, PROVIDED that the aggregate
consideration received in respect of such sale consists of cash.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of any Group Member,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of any Group Member (collectively, "RESTRICTED PAYMENTS"), except
that (a) any Subsidiary of the U.S. Borrower may make Restricted Payments to the
U.S. Borrower or any U.S. Wholly Owned Subsidiary Guarantor, (b) any Subsidiary
of the Canadian Borrower may make Restricted Payments to the Canadian Borrower
or any Canadian Wholly Owned Subsidiary Guarantor and (c) the U.S. Borrower may
purchase or repurchase its Capital Stock or options therefor (x) from directors,
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officers, consultants or employees of the U.S. Borrower or any of its
Subsidiaries or their authorized representatives upon the death, disability or
termination of employment of such directors, officers, consultants or employees,
or (y) to replenish treasury stock of the U.S. Borrower which (i) has been used
to fulfill the U.S. Borrower's obligation to match, in part, the contribution of
any such employee under the U.S. Borrower's 401(k) plan or the Xxxxx Xxxx Stock
Purchase Program or (ii) has been issued as restricted stock or upon vesting of
restricted stock units or upon exercise of stock options, which restricted
stock, restricted stock units or stock options were granted to any such
director, officer, consultant or employee, PROVIDED that the aggregate amount of
all such purchases and repurchases under this clause (c) consummated in any
fiscal year may not exceed $2,000,000.
7.7 CAPITAL EXPENDITURES. Make or commit to make any Capital
Expenditure, except (a) Capital Expenditures of the U.S. Borrower and its
Subsidiaries in the ordinary course of business not exceeding (i) during the
period from the date hereof through the end of the U.S. Borrower's 2002 fiscal
year, $17,000,000 or (ii) during any fiscal year of the U.S. Borrower ending
thereafter, the amount set forth below for such fiscal year:
FISCAL YEAR AMOUNT
----------- ------
2003 $36,000,000
2004 $30,000,000
2005 $30,000,000
2006 and thereafter $32,000,000
PROVIDED that (i) any such amount referred to above, if not so expended in the
period or fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
made pursuant to this clause (a) during any fiscal year shall be deemed made,
FIRST, in respect of amounts permitted for such fiscal year as provided above
and, SECOND, in respect of amounts carried over from the prior fiscal year
pursuant to subclause (i) above and (b) Capital Expenditures made with the
proceeds of any Reinvestment Deferred Amount.
7.8 INVESTMENTS. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "INVESTMENTS"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of any Group Member in the
ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not
to exceed $2,000,000 at any one time outstanding;
(e) the Acquisition;
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(f) (i) Investments in assets (including through the purchase
of Capital Stock of any Person) useful in the business of the U.S.
Borrower and its Subsidiaries made by the U.S. Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount
derived from assets owned by the U.S. Borrower or any of its
Subsidiaries (other than the Canadian Borrower or any of its
Subsidiaries) and (ii) Investments in assets (including through the
purchase of Capital Stock of any Person) useful in the business of the
Canadian Borrower and its Subsidiaries made by the Canadian Borrower or
any of its Subsidiaries with the proceeds of any Reinvestment Deferred
Amount derived from assets owned by the Canadian Borrower or any of its
Subsidiaries;
(g) (i) intercompany Investments by any Subsidiary of the U.S.
Borrower in the U.S. Borrower or any Person that, prior to such
investment, is a U.S. Wholly Owned Subsidiary Guarantor and (ii)
intercompany Investments by any Subsidiary of the Canadian Borrower in
the U.S. Borrower, the Canadian Borrower or any Person that, prior to
such investment, is a Wholly Owned Subsidiary Guarantor;
(h) intercompany loans permitted by Section 7.2(b);
(i) Investments by the U.S. Borrower or any of its
Subsidiaries in any Wholly Owned Subsidiary Guarantor; and
(j) in addition to Investments otherwise expressly permitted
by this Section, Investments by the U.S. Borrower or any of its
Subsidiaries in an aggregate amount (valued at cost) not to exceed
during the term of this Agreement $15,000,000 or, if the Consolidated
Leverage Ratio shall be less than 2.75 to 1.0 as of the last day of any
two consecutive fiscal quarters ending subsequent to the Closing Date,
$30,000,000.
7.9 OPTIONAL PAYMENTS AND MODIFICATIONS OF CERTAIN DEBT
INSTRUMENTS; SYNTHETIC PURCHASE AGREEMENTS. (a) Make or offer to make any
optional or voluntary payment, prepayment, repurchase or redemption of or
otherwise optionally or voluntarily defease or segregate funds with respect to
the Senior Notes, the Bridge Facility or the Medium Term Notes (other than (i)
any refinancing of the Bridge Facility with the issuance of senior notes (which
may be sold in a public offering or a private placement) on terms no less
favorable to the Lenders than the terms under the Bridge Facility and (ii)
repurchases or redemptions of the Medium Term Notes on or prior to the Closing
Date); (b) amend, modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Senior Notes, the Bridge Facility or the Medium Term Notes (other than any such
amendment, modification, waiver or other change that (i) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon and (ii) does not
involve the payment of a consent fee and other than the amendment to the Medium
Term Notes Indenture referred to in Section 5.1(b)(iii)(C)); or (c) enter into
or be party to, or make any payment under, any Synthetic Purchase Agreement.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrowers or any Wholly Owned Subsidiary Guarantor and
other than contributions to the Foundation) unless such
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transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of business of the relevant Group Member, and (c) upon fair
and reasonable terms no less favorable to the relevant Group Member than it
would obtain in a comparable arm's length transaction with a Person that is
not an Affiliate.
7.11 SALES AND LEASEBACKS. Enter into any arrangement after
the date hereof with any Person providing for the leasing by any Group Member of
real or personal property that has been or is to be sold or transferred by such
Group Member to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of such Group Member unless such arrangement is entered into in
connection with (x) the financing of the acquisition of such property through
the proceeds of a Capital Lease Obligation permitted by Section 7.2(e) and the
sale or transfer of such property occurs within thirty days following the
acquisition thereof by the U.S. Borrower or any of its Subsidiaries or (y) the
sale or transfer of such property to a Governmental Authority which is financed
by the issuance of tax-exempt bonds or other debt instruments issued by such
Governmental Authority, PROVIDED that such property is contemporaneously leased
to the U.S. Borrower or any of its Subsidiaries and PROVIDED, FURTHER, that the
aggregate fair market value of the property subject of all such sales or
transfers consummated pursuant to this clause (y) shall not exceed $10,000,000.
7.12 CHANGES IN FISCAL PERIODS. Permit the fiscal year of
the U.S. Borrower to end on a day other than the Saturday closest to the last
day of February or change the U.S. Borrower's method of determining fiscal
quarters.
7.13 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of any Group
Member to create, incur, assume or suffer to exist any Lien upon any of its
property or revenues, whether now owned or hereafter acquired, to secure its
obligations under the Loan Documents to which it is a party other than (a) this
Agreement and the other Loan Documents; (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby), (c) agreements relating to Indebtedness that is
required to be repaid on the Closing Date pursuant to Section 5.1(b)(iii) and
(d) the Medium Term Notes Indenture.
7.14 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the U.S. Borrower to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the U.S. Borrower or any Subsidiary of the U.S. Borrower,
(b) make loans or advances to, or other Investments in, the U.S. Borrower or any
Subsidiary of the U.S. Borrower or (c) transfer any of its assets to the U.S.
Borrower or any Subsidiary of the U.S. Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary and (iii) any restrictions in agreements relating to Indebtedness
that is required to be repaid on the Closing Date pursuant to Section
5.1(b)(iii).
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7.15 LINES OF BUSINESS. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrowers and their respective Subsidiaries are engaged on the date of this
Agreement (after giving effect to the Acquisition) or that are reasonably
related thereto.
7.16 AMENDMENTS TO ACQUISITION DOCUMENTS. Amend, supplement
or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of any of the Acquisition Documentation in any manner that is
adverse to the interests of the Loan Parties or the Lenders.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) either Borrower shall fail to pay any principal of any
Loan or Reimbursement Obligation when due in accordance with the terms
hereof; or either Borrower shall fail to pay any interest on any Loan
or Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrowers only), Section 6.7(a) or Section
7 of this Agreement or Sections 5.5 and 5.7(b) of either Guarantee and
Collateral Agreement or (ii) an "Event of Default" under and as defined
in any Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice to the relevant Borrower from the
relevant Administrative Agent or the relevant Required Lenders; or
(e) any Group Member shall (i) default in making any payment
of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due
date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or
to permit the holder
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or beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause such Indebtedness to become
due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable;
PROVIDED that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing
with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $7,500,000 (or the Canadian Dollar
Equivalent thereof); or
(f) (i) any Group Member shall commence any case, proceeding
or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or any Group
Member shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against any Group Member
any case, proceeding or other action of a nature referred to in clause
(i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against any Group Member any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) any Group Member
shall take any action indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) any Group Member shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan that is not exempt under Section 408 of ERISA
or Section 4975 of the Code, (ii) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan or any Lien in favor of the PBGC or a
Plan shall arise on the assets of the U.S. Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the U.S. Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition,
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together with all other such events or conditions, if any, could, in
the sole judgment of the Required Lenders, reasonably be expected to
have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
any Group Member involving in the aggregate a liability (not paid or
fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $7,500,000 (or the Canadian Dollar
Equivalent thereof) or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) any of the Security Documents shall at any time after the
execution and delivery thereof cease, for any reason, to be in full
force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents
shall at any time after the execution and delivery thereof cease to be
enforceable and of the same effect and priority purported to be created
thereby (other than by reason of the action or inaction of either
Administrative Agent or any Lender); or
(j) the guarantee contained in Section 2 of either Guarantee
and Collateral Agreement shall at any time after the execution and
delivery thereof cease, for any reason (other than by reason of the
action or inaction of either Administrative Agent or any Lender), to be
in full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; or
(k) (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")), shall become, or obtain rights (whether
by means or warrants, options or otherwise) to become, the "beneficial
owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 40% of the outstanding
common stock of the U.S. Borrower; (ii) the board of directors of the
U.S. Borrower shall cease to consist of a majority of Continuing
Directors; or (iii) a Specified Change of Control shall occur; or
(l) the U.S. Borrower or any of its Subsidiaries shall become
liable for remediation and/or environmental compliance expenses and/or
fines, penalties or other charges which, in the aggregate, could
reasonably expected to result in payments by the U.S. Borrower and its
Subsidiaries (other than with the proceeds of insurance) having a
present value (based upon then applicable ABR) in excess of $7,500,000;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to either Borrower,
automatically the Commitments shall immediately terminate and the Loans
(including the face amount of all Bankers' Acceptances accepted by any Canadian
Lender), with accrued interest thereon, and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agents may, or upon the request of the
Required Lenders, the Administrative Agents shall, by notice to the Borrowers
declare the
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Revolving Commitments and the Canadian Swingline Commitment to be terminated
forthwith, whereupon the Revolving Commitments and the Canadian Swingline
Commitment shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agents may, or upon the request of the
Required Lenders, the Administrative Agents shall, by notice to the
Borrowers, declare the Loans hereunder (including the face amount of all
Bankers' Acceptances accepted by any Canadian Lender), with accrued interest
thereon, and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) to the Borrowers to
be due and payable forthwith, whereupon the same shall immediately become due
and payable.
With respect to all Bankers' Acceptances which are outstanding
at the time the Administrative Agents take any action pursuant to this
paragraph, the Canadian Borrower shall at such time deposit in a cash collateral
account opened by Canadian Administrative Agent an amount of cash equal to the
aggregate undiscounted face amount of all unmatured Bankers' Acceptances.
Amounts held in such cash collateral account shall be applied by the Canadian
Administrative Agent to the payment of maturing Bankers' Acceptances, and the
unused portion thereof after all such Bankers' Acceptances shall have matured,
if any, shall be applied to repay other obligations of the Canadian Borrower
hereunder. After all Bankers' Acceptances shall have been satisfied and all
other obligations of the Canadian Borrower hereunder shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Canadian Borrower.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to this paragraph, the relevant Borrower shall at such time deposit in
a cash collateral account opened by the relevant Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
relevant Administrative Agent to the payment of drafts drawn under such Letters
of Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the relevant Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the relevant Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the relevant Borrower (or such other
Person as may be lawfully entitled thereto). Except as expressly provided above
in this Section, presentment, demand, protest and all other notices of any kind
are hereby expressly waived by the Borrowers.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. (a) Each U.S. Lender hereby irrevocably
designates and appoints the U.S. Administrative Agent as the agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the U.S. Administrative Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
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expressly delegated to the U.S. Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Each Canadian Lender hereby irrevocably
designates and appoints the Canadian Administrative Agent as the agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Canadian Administrative Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Canadian Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Each Lender hereby irrevocably designates and
appoints the Collateral Agent as the collateral agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Collateral Agent, in such capacity, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Collateral Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, none
of the Administrative Agents or the Collateral Agent shall 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
Agreement or any other Loan Document or otherwise exist against any of the
Administrative Agents or the Collateral Agent.
(b) For greater certainty, and without limiting the powers of
the Collateral Agent hereunder or under any of the other Loan Documents, each of
the Lenders hereby acknowledges that the Collateral Agent shall, for purposes of
holding any security granted by the Canadian Borrower or any Canadian Subsidiary
Guarantor on their respective property pursuant to the laws of the Province of
Quebec to secure payment of the bond issued by the Canadian Borrower or any such
Canadian Subsidiary Guarantor pursuant to the Quebec Security Documents and
pledged in favor of the Collateral Agent (the "BOND"), be the holder of an
irrevocable power of attorney (FONDE DE POUVOIR) (within the meaning of the
CIVIL CODE OF QUEBEC) for all present and future Lenders and in particular for
all present and future holders of the Bond. Each of the Administrative Agents
and the Lenders hereby irrevocably constitutes, to the extent necessary, the
Collateral Agent as the holder of an irrevocable power of attorney (FONDE DE
POUVOIR) (within the meaning of Article 2692 of the CIVIL CODE OF QUEBEC) in
order to hold security granted by the Canadian Borrower or any Canadian
Subsidiary Guarantor in the Province of Quebec to secure the Bond. Each Assignee
shall be deemed to have confirmed and ratified the constitution of the
Collateral Agent as the holder of such irrevocable power of attorney (FONDE DE
POUVOIR) by execution of the relevant Assignment and Acceptance. Notwithstanding
the provisions of Section 32 of the SPECIAL CORPORATE POWERS ACT (Quebec), the
Collateral Agent may acquire and be the holder of the Bond. The Canadian
Borrower, for itself and for each Canadian Subsidiary Guarantor, hereby
acknowledges that the Bond constitutes a title of indebtedness, as such term is
used in Article 2692 of the CIVIL CODE OF QUEBEC. Anything in this Section
9.1(b) to the contrary notwithstanding, the Collateral Agent agrees that it will
not exercise any rights under the irrevocable power of attorney (FONDE DE
POUVOIR) provided in this Section 9.1(b) unless an Event of Default shall have
occurred and be continuing.
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9.2 DELEGATION OF DUTIES. Each of the Administrative Agents
and the Collateral Agent may execute any of its duties under this Agreement and
the other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
None of the Administrative Agents or the Collateral Agent shall be responsible
for the negligence or misconduct of any agents or attorneys in-fact selected by
it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto 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 of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENTS. Each of the
Administrative Agents and the Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it 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 counsel to
the Borrowers), independent accountants and other experts selected by such
Administrative Agent or Collateral Agent, as the case may be. Each
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with such Administrative Agent. Each of
the Administrative Agents and the Collateral Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
relevant Required Lenders (or, if so specified by this Agreement, all Lenders)
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action. Each of the
Administrative Agents and the Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the relevant Required
Lenders (or, if so specified by this Agreement, all Lenders), 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 Loans.
9.5 NOTICE OF DEFAULT. Neither Administrative Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless such Administrative Agent has received notice from a Lender, or
either Borrower referring to this
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Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that either Administrative
Agent receives such a notice, such Administrative Agent shall give notice
thereof to the Lenders. The Administrative Agents shall take such action with
respect to such Default or Event of Default as shall be reasonably directed
by the relevant Required Lenders (or, if so specified by this Agreement, all
Lenders); PROVIDED that unless and until the Administrative Agents shall have
received such directions, the Administrative Agents 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 that, in any case where this Agreement
expressly requires that such action be taken, or not be taken, only with
consent or upon the authorization of the relevant Required Lenders, the
relevant Majority Facility Lenders, or all of the Lenders, the Administrative
Agents may take such action, or refrain from taking such action, only if it
shall have received such consent or authorization).
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent 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 Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent 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 Agreement and the other Loan Documents, 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
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by either
Administrative Agent hereunder, such Administrative Agent shall not 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 any Loan Party or any affiliate
of a Loan Party that may come into the possession of such Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be
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imposed on, incurred by or asserted against such Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Loan
Documents 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;
PROVIDED that 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 that have resulted from
such Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENTS. Either Administrative
Agent may resign as Administrative Agent upon 30 days' notice to the relevant
Lenders and the relevant Borrower. If either Administrative Agent shall resign
as Administrative Agent under this Agreement and the other Loan Documents, then
the relevant Required Lenders shall appoint from among the relevant Lenders a
successor agent for the relevant Lenders, which successor agent shall (unless an
Event of Default under Section 8(a) or Section 8(f) with respect to the
Borrowers shall have occurred and be continuing) be subject to approval by the
relevant Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the relevant Administrative Agent, and the term "U.S. Administrative
Agent" or "Canadian Administrative Agent", as the case may be, shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
relevant Lenders shall assume and perform all of the duties of the relevant
Administrative Agent hereunder until such time, if any, as the relevant Required
Lenders appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 DOCUMENTATION AGENT AND SYNDICATION AGENTS. None of
the Documentation Agent or the Syndication Agents shall have any duties or
responsibilities hereunder in its capacity as such.
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SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agents
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agents, as
the case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates (which waiver shall
be effective with the written consent of the Majority Facility Lenders of each
adversely affected Facility) and (y) that any amendment or modification of
defined terms used in the financial covenants in this Agreement shall not
constitute a reduction in the rate of interest or fees for purposes of this
clause (i)) 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; (ii)
eliminate or reduce the voting rights of any Lender under this Section 10.1
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by either Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release any Guarantor that is a "significant subsidiary" under
Regulation S-X promulgated under the Securities and Exchange Act of 1934, as
amended, from its obligations under the Guarantee and Collateral Agreements, in
each case without the written consent of all Lenders; (iv) amend, modify or
waive any provision of Section 2.18(e), (f) or (g) or Section 2.24 without the
written consent of the Majority Facility Lenders in respect of each Facility
adversely affected thereby; (v) reduce the amount of Net Cash Proceeds or Excess
Cash Flow required to be applied to prepay Loans under this Agreement without
the written consent of the Majority Facility Lenders with respect to each
Facility; (vi) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the written consent of all
Lenders under such Facility; (vii) amend, modify or waive any provision of
Section 9 without the written consent of each Administrative Agent affected
thereby; (viii) amend, modify or waive any provision of Section 2.13 or 2.14
without the written consent of the Canadian Swingline Lender; or (ix) amend,
modify or waive any provision of Section 3 without the written consent of each
Issuing Lender affected thereby. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agents and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agents shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default
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or Event of Default 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.
For the avoidance of doubt, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agents and the Borrowers (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "ADDITIONAL EXTENSIONS OF CREDIT") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans and
Revolving Extensions of Credit and the accrued interest and fees in respect
thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and Majority Facility
Lenders; PROVIDED that no such amendment shall permit the Additional Extensions
of Credit to share ratably with or with preference to the Term Loans in the
application of mandatory prepayments without the consent of the Majority
Facility Lenders under each Facility (other than the Revolving Facility) or
otherwise to share ratably with or with preference to the Revolving Extensions
of Credit without the consent of the Majority Facility Lenders under the
Revolving Facility.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrowers, the Administrative Agents
and the Issuing Lenders, as follows, (b) in the case of the Lenders, as set
forth in an administrative questionnaire delivered to the relevant
Administrative Agent or on Schedule 1 to the Lender Addendum to which such
Lender is a party or, in the case of a Lender which becomes a party to this
Agreement pursuant to an Assignment and Acceptance, in such Assignment and
Acceptance or (c) in the case of any party, to such other address as such party
may hereafter notify the other parties hereto:
U.S. Borrower:
International Multifoods Corporation
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Vice President and Treasurer
Telecopy: 000-000-0000
Telephone: 000-000-0000
Canadian Borrower: Xxxxx Xxxx Multifoods Inc.
00 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Vice President, Finance and Treasurer
Telecopy: 000-000-0000
Telephone: 000-000-0000
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and in the case of
International Multifoods Corporation
either Borrower 000 Xxxxxxxx Xxxx
with a copy to: Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Telecopy: 000-000-0000
Telephone: 000-000-0000
U.S. Administrative Canadian Imperial Bank of Commerce
Agent, U.S. Issuing 000 Xxxxxxxxx Xxxxxx
Lender and Xxx Xxxx, Xxx Xxxx 00000
Collateral Agent: Attention: Xxxxxxxx Xxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
Canadian Canadian Imperial Bank of Commerce
Administrative Agent BCE Place
and Canadian Issuing 000 Xxx Xxxxxx, 0xx Xx.
Lender: Xxxxxxx, Xxxxxxx, X0X 258
Attention: Xxxxxx XxXxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
PROVIDED that any notice, request or demand to or upon the Administrative
Agents, the Issuing Lenders or the Lenders shall not be effective until
received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of either Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents 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.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrowers agree (a) to
pay or reimburse the Administrative Agents and the Arranger for all their
respective out-of-pocket costs and expenses incurred in connection with the
syndication of the Facilities and the development, preparation and execution of,
and any amendment, supplement or modification to, this Agreement and the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of U.S. and Canadian counsel to the Administrative Agents and filing and
recording fees and expenses, with
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statements with respect to the foregoing to be submitted to the Borrowers
prior to the Closing Date (in the case of amounts to be paid on the Closing
Date) and from time to time thereafter on a quarterly basis or such other
periodic basis as the Administrative Agents shall deem appropriate, (b) to
pay or reimburse each of the Lenders, the Administrative Agents and the
Collateral Agent for all its costs and incurred expenses in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents (including those incurred in
connection with any credit restructuring or any "workout" relating to the
Obligations), including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of
counsel to each Administrative Agent, (c) to pay, indemnify, and hold each of
the Lenders, the Administrative Agents and the Collateral Agent 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
taxes, if any, that 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, this
Agreement, the other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold each of the Lenders, the Administrative Agents, the
Collateral Agent and the Arranger and their respective officers, directors,
employees, affiliates, agents and controlling persons (each, an "INDEMNITEE")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including any of the
foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to
the operations of any Group Member or any of the facilities and properties
owned, leased or operated by any Group Member and the reasonable fees and
expenses of legal counsel in connection with claims, actions or proceedings
by any Indemnitee against any Loan Party under any Loan Document (all the
foregoing in this clause (d), collectively, the "INDEMNIFIED LIABILITIES"),
PROVIDED that the Borrowers shall have no obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, each Borrower agrees not to assert
and to cause its Subsidiaries not to assert, and hereby waives and agrees to
cause its Subsidiaries to waive, all rights for contribution or any other
rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee. All amounts due under this
Section 10.5 shall be payable not later than 10 days after written demand
therefor. Statements payable by each Borrower pursuant to this Section shall
be submitted to the Treasurer of the U.S. Borrower (Telephone No.
000-000-0000) (Telecopy No. 952-594-3362), at the address of the U.S.
Borrower set forth in Section 10.2, or to such other Person or address as may
be hereafter designated by such Borrower in a written notice to the relevant
Administrative Agent. The agreements in this Section shall survive repayment
of the Loans and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the
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Administrative Agents, all future holders of the Loans and their respective
successors and assigns, except that neither Borrower may assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of each U.S. Lender or Canadian Lender, as the case may be.
(b) Any Lender other than any Conduit Lender may, without the
consent of either Borrower, in accordance with applicable law, at any time sell
to one or more banks, financial institutions or other entities (each, a
"PARTICIPANT") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the relevant Borrower and the relevant
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent would:
reduce the principal of, or interest on, the Loans or any fees payable
hereunder; postpone the date of the final maturity of the Loans, the scheduled
date of amortization of any Term Loan or the scheduled date of any payment of
interest on the Loans; release all or substantially all of the Collateral;
release all or substantially all of the Guarantors from their obligations under
the Guarantee and Collateral Agreements; or increase the amount or extend the
expiration date of any Lender's Revolving Commitment, in each case described in
this sentence to the extent subject to such participation. Each Borrower agrees
that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. Each Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.25, 2.26 and 2.27
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; PROVIDED that, in the case of Section
2.26, such Participant shall have complied with the requirements of such Section
and PROVIDED, FURTHER, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section 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 other than any Conduit Lender (an "ASSIGNOR")
may, in accordance with applicable law, at any time and from time to time assign
to any Lender or any Lender Affiliate or, with the consent of the relevant
Borrower and the relevant Administrative Agent (which, in each case, shall not
be unreasonably withheld or delayed), to an additional bank, financial
institution or other entity (an "ASSIGNEE") all or any part of its rights and
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obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and delivered
to the relevant Administrative Agent for its acceptance and recording in the
Register; PROVIDED that, unless otherwise agreed by the relevant Borrower and
the relevant Administrative Agent, no such assignment to an Assignee (other than
any Lender or any Lender Affiliate) shall be in an aggregate principal amount of
less than $2,000,000 (or the Canadian Dollar Equivalent thereof), in each case
except in the case of an assignment of all of a Lender's interests under this
Agreement. For purposes of the proviso contained in the preceding sentence, the
amount described therein shall be aggregated in respect of each Lender and its
Lender Affiliates, if any. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto). Notwithstanding any provision of this Section, the consent of either
Borrower shall not be required for any assignment that occurs when an Event of
Default shall have occurred and be continuing. Notwithstanding the foregoing,
any Conduit Lender may assign at any time to its designating Lender hereunder
without the consent of either Borrower or either Administrative Agent any or all
of the Loans it may have funded hereunder and pursuant to its designation
agreement and without regard to the limitations set forth in the first sentence
of this Section 10.6(c).
(d) Each Administrative Agent shall, on behalf of the relevant
Borrower, maintain at its address referred to in Section 10.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "REGISTER") for
the recordation of the names and addresses of the relevant Lenders and the
Commitment of, and the principal amount of the Loans owing to, each relevant
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and each Borrower, each other Loan Party, each
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of the Loans and any Notes evidencing the
Loans recorded therein for all purposes of this Agreement. Any assignment of any
Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance, and thereupon one or
more new Notes shall be issued to the designated Assignee.
(e) Upon its receipt of (x) an Assignment and Acceptance
executed by an Assignor, an Assignee and any other Person whose consent is
required by Section 10.6(c), (y) an administrative questionnaire if the Assignee
is not an existing Lender, and (z) such forms, certificates or other evidence,
if any, with respect to U.S. federal withholding tax pursuant to Section
2.26(d), together with payment to the relevant Administrative Agent of a
registration and processing fee of $3,500 (PROVIDED that (A) no such processing
fee shall be payable if the Assignee is a Lender Affiliate of the Assignor
within the definition of clause (a) or (b) of the
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definition of Lender Affiliate, and (B) only one such fee shall be required
in connection with a simultaneous assignment to Lender Affiliates of the
Assignee within the definition of clause (c) of the definition of Lender
Affiliate), such Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) record the information contained therein
in the Register on the effective date determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including any pledge or assignment by a
Lender to any Federal Reserve Bank in accordance with applicable law.
(g) Each Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
(h) Each Borrower, each Lender and each Administrative Agent
hereby confirms that it will not institute against a Conduit Lender or join any
other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit Lender;
PROVIDED, HOWEVER, that each Lender designating any Conduit Lender hereby agrees
to indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.
10.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (for purposes of
this sentence, a "BENEFITTED LENDER") shall at any time prior to any date on
which the Commitments are terminated and the Loans and/or Reimbursement
Obligations become due and payable pursuant to Section 8 (an "ACCELERATION")
receive any payment of all or part of the Obligations owing to such Benefitted
Lender by either Borrower, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender by such Borrower (in each
case except to the extent that this Agreement provides for payments to be
allocated to the Lenders under a particular Facility) then such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of the Obligations owing to each such other Lender, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to share
the excess payment or benefits of such collateral or proceeds with each of the
Lenders ratably (based upon the respective Aggregate Exposure Percentages of the
Lenders immediately prior to receipt by such Benefitted Lender of such payment
or collateral); PROVIDED, HOWEVER, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) If at the time of an Acceleration (i) the percentage which
(x) the Canadian Swingline Extensions of Credit then outstanding constitutes of
(y) the Canadian Swingline Commitment in effect immediately prior to such
Acceleration is greater than (ii) the percentage
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which (x) the aggregate then outstanding principal amount of Canadian
Revolving Loans constitutes of (y) the aggregate Canadian Revolving
Commitments in effect immediately prior to such Acceleration, or if at such
time the percentage referred to in clause (ii) is greater than the percentage
referred to in clause (i), the Canadian Revolving Lenders and the Canadian
Swingline Lender shall purchase in cash from each other participating
interests in respect of the Obligations arising out of the Canadian Revolving
Credit Facility and the Canadian Swingline Facility in such amounts so that,
after giving effect thereto, the percentage which each such Canadian Lender
holds of the aggregate then outstanding amount of the Canadian Swingline
Extensions of Credit and Canadian Revolving Loans shall be equal to the
percentage which (x) such aggregate then outstanding amount constitutes of
(y) the sum of the Canadian Swingline Commitment and the aggregate Canadian
Revolving Commitments in effect immediately prior to such Acceleration. If
any Lender (for purposes of this sentence, a "BENEFITTED LENDER") shall at
any time after an Acceleration receive any payment of all or part of the
Obligations owing to such Benefitted Lender by the Borrowers, or receive any
collateral in respect thereof (whether voluntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such Lender by the Borrowers (after giving effect to the adjustments provided
for in the preceding sentence), then such Benefitted Lender shall purchase
for cash from the other Lenders a participating interest in such portion of
the Obligations owing to each such other Lender, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess
payment or benefits of such collateral or proceeds with each of the Lenders
ratably (based upon the respective Aggregate Exposure Percentages of the
Lenders immediately prior to receipt by such Benefitted Lender of such
payment or collateral); PROVIDED, HOWEVER, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.
(c) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by such
Borrowers hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount 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 such Borrower, as the case may
be. Each Lender agrees promptly to notify the Borrowers and the Administrative
Agents after any such setoff and application made by such Lender, PROVIDED that
the failure to give such notice shall not affect the validity of such setoff and
application.
10.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement or a Lender Addendum by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. A set of the copies of
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this Agreement signed by all the parties shall be lodged with each Borrower
and each Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that 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.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of the Borrowers, the Administrative Agents and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Borrowers,
either Administrative Agent or any Lender relative to the subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address set forth in Section 10.2 or
at such other address of which the relevant Administrative Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
111
10.13 ACKNOWLEDGEMENTS. Each Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither Administrative Agent nor any Lender has any
fiduciary relationship with or duty to either Borrower arising out of
or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agents and
Lenders, on one hand, and the Borrowers, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrowers and the
Lenders.
10.14 RELEASES OF GUARANTEES AND LIENS. (a) Notwithstanding
anything to the contrary contained herein or in any other Loan Document, each
Administrative Agent is hereby irrevocably authorized by each relevant Lender
(without requirement of notice to or consent of any such Lender except as
expressly required by Section 10.1 or any Lender Affiliate or any other
counterparty to any Specified Hedge Agreement) to take any action requested by
the relevant Borrower having the effect of releasing any Collateral or guarantee
obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 10.1 or (ii) under the circumstances described in
paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations
and the other obligations under the Loan Documents (other than obligations under
or in respect of Hedge Agreements) shall have been paid in full, the Commitments
have been terminated and no Letters of Credit shall be outstanding, the
Collateral shall (without the requirement of notice or consent of any Lender or
any Lender Affiliate or any other counterparty to any Specified Hedge Agreement)
be released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive such
termination) of each Administrative Agent and each Loan Party under the Security
Documents shall terminate, all without delivery of any instrument or performance
of any act by any Person.
10.15 CONFIDENTIALITY. Each Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement consisting of financial statements or
other information delivered pursuant to Section 6.1 or 6.2, information
concerning potential acquisitions or dispositions and information that is
designated by such Loan Party as confidential; PROVIDED that nothing herein
shall prevent either Administrative Agent or any Lender from disclosing any such
information (a) to either Administrative Agent, any other Lender or any Lender
Affiliate, (b) subject to an agreement to comply with the provisions of this
Section, to any actual or prospective Transferee or any direct or indirect
counterparty to any Hedge Agreement (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys, accountants
and other professional advisors or those of any of its affiliates, (d) upon the
request or demand of any Governmental Authority, (e) in response to any order of
any court or other Governmental
112
Authority or as may otherwise be required pursuant to any Requirement of Law,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about
a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
10.16 DELIVERY OF LENDER ADDENDA. Each Person which becomes a
party hereto, and a Lender hereunder, on the date hereof shall become a party to
this Agreement by delivering to the relevant Administrative Agent a Lender
Addendum duly executed by such Person, the Borrowers and the relevant
Administrative Agent.
10.17 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE
AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
INTERNATIONAL MULTIFOODS CORPORATION
By: /s/ Xxxx X. Xxxx
----------------------------------------
Xxxx X. Xxxx
Vice President and Chief Financial
Officer
XXXXX XXXX MULTIFOODS INC.
By: /s/ Xxx Xxxxxx
----------------------------------------
Xxx Xxxxxx
President
CANADIAN IMPERIAL BANK OF COMMERCE,
as U.S. Administrative Agent
By: /s/ Xxxxxxxxx Xxxx
----------------------------------------
Xxxxxxxxx Xxxx
Executive Director
CANADIAN IMPERIAL BANK OF COMMERCE,
as Canadian Administrative Agent
By: /s/ Xxxxxx Xxxx
----------------------------------------
Xxxxxx Xxxx
Associate
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx
Vice President
UBS WARBURG LLC, as Syndication Agent
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
Associate Director,
Banking Products Services, US
By: /s/ Xxxxxx X. Xxxx III
----------------------------------------
Xxxxxx X. Xxxx III
Executive Director
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. trading under RABOBANK
INTERNATIONAL, NEW YORK BRANCH,
as Documentation Agent
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
Vice President
By: /s/ W. Xxxxxx X. Xxxxx
----------------------------------------
W. Xxxxxx X. Xxxxx
Managing Director
ANNEX A-1
PRICING GRID FOR REVOLVING LOANS, CANADIAN SWINGLINE LOANS,
TRANCHE A TERM LOANS AND COMMITMENT FEES
==================================================================================================================================
Applicable Margin for
Consolidated Applicable Margin for ABR, U.S. Base Rate or Applicable Margin for
Leverage Ratio Eurodollar Loans C$ Prime Loans Bankers' Acceptances Commitment Fee Rate
----------------------------------------------------------------------------------------------------------------------------------
GREATER THAN 3.75 to 1.00 3.00% 2.00% 3.00% 0.50%
----------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 3.75 to 1:00
and
GREATER THAN 3.25 to 1.00 2.75% 1.75% 2.75% 0.50%
----------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 3.25 to 1.00
and
GREATER THAN 3,00 to 1.00 2.50% 1.50% 2.50% 0.50%
----------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 3.00 to 1.00
and
GREATER THAN 2.75 to 1.00 2.25% 1.25% 2.25% 0.375%
----------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 2.75 to 1.00
and
GREATER THAN 2.50 to 1.00 2.00% 1.00% 2.00% 0.375%
----------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 2.50 to 1.00 1.75% 0.75% 1.75% 0.375%
==================================================================================================================================
Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage Ratio shall become effective on the date (the "ADJUSTMENT DATE") that
is three Business Days after the date on which financial statements are
delivered to the Lenders pursuant to Section 6.1(b) and shall remain in effect
until the next change to be effected pursuant to this paragraph; PROVIDED that
if the Consolidated Leverage Ratio reflected in the annual financial statements
delivered to the Lenders pursuant to Section 6.1(a) requires a change in the
Applicable Margin as a result of a change in the Consolidated Leverage Ratio
from that reflected in the quarterly financial statements delivered to the
Lenders pursuant to Section 6.1(b) for the period ending on the same date, such
change in the Applicable Margin shall be retroactively applied so that it shall
be deemed to have taken effect as of the date that is three Business Days after
the date on which such quarterly financial statements were delivered to the
Lenders (and if, prior to the date upon which it shall be determined that any
such retroactive change shall be necessary, either Borrower shall have made an
interest or commitment fee payment for a period which includes the period of
such retroactive change: (a) if such change results in an increase in the
Applicable Margin, the applicable Borrower shall be immediately obligated to pay
to the applicable Administrative Agent, on behalf of the applicable Lenders, an
amount reflecting such adjusted Applicable Margin or (b) if such change results
in a decrease in the Applicable Margin, the applicable Borrower shall be
entitled to reduce the next related interest and/or commitment fee payment to
the extent necessary to reflect such adjusted Applicable Margin). If any
financial statements referred to above are not delivered within the time periods
specified in Section 6.1, then, until the date that is three Business Days after
the date on which such financial statements are delivered, the highest rate set
forth in each column of this Pricing Grid shall apply. In addition, at all
times while an Event of Default shall have occurred and be continuing, the
highest rate set forth in
2
each column of this Pricing Grid shall apply. Each determination of the
Consolidated Leverage Ratio pursuant to this Pricing Grid shall be made in a
manner consistent with the determination thereof pursuant to Section 7.1(a).
ANNEX A-2
PRICING GRID FOR U.S. TRANCHE B TERM LOANS
============================================================================
Consolidated Applicable Margin for Applicable Margin for ABR
Leverage Ratio Eurodollar Loans Loans
----------------------------------------------------------------------------
3.50 to 1.00 3.00% 2.00%
----------------------------------------------------------------------------
< 3.50 to 1:00 2.75% 1.75%
============================================================================
Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage Ratio shall become effective on the Adjustment Date and shall remain in
effect until the next change to be effected pursuant to this paragraph; PROVIDED
that if the Consolidated Leverage Ratio reflected in the annual financial
statements delivered to the Lenders pursuant to Section 6.1(a) requires a change
in the Applicable Margin as a result of a change in the Consolidated Leverage
Ratio from that reflected in the quarterly financial statements delivered to the
Lenders pursuant to Section 6.1(b) for the period ending on the same date, such
change in the Applicable Margin shall be retroactively applied so that it shall
be deemed to have taken effect as of the date that is three Business Days after
the date on which such quarterly financial statements were delivered to the
Lenders (and if, prior to the date upon which it shall be determined that any
such retroactive change shall be necessary, the U.S. Borrower shall have made an
interest payment for a period which includes the period of such retroactive
change: (a) if such change results in an increase in the Applicable Margin, the
U.S. Borrower shall be immediately obligated to pay to the U.S. Administrative
Agent, on behalf of the U.S. Tranche B Term Lenders, an amount reflecting such
adjusted Applicable Margin or (b) if such change results in a decrease in the
Applicable Margin, the U.S. Borrower shall be entitled to reduce the next
related interest payment to the extent necessary to reflect such adjusted
Applicable Margin). If any financial statements referred to above are not
delivered within the time periods specified in Section 6.1, then, until the date
that is three Business Days after the date on which such financial statements
are delivered, the highest rate set forth in each column of this Pricing Grid
shall apply. In addition, at all times while an Event of Default shall have
occurred and be continuing, the highest rate set forth in each column of this
Pricing Grid shall apply. Each determination of the Consolidated Leverage Ratio
pursuant to this Pricing Grid shall be made in a manner consistent with the
determination thereof pursuant to Section 7.1(a).
SCHEDULE 1.1A
PART A PART B
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 0 Xxxxxxxx Xxxxxx Xxxx, Xxxx Xxxxxxxx, Xxxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxx 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx 0000 Xxxxx-Xxxx Xx. Xxxx, Xxxxxxxx, Xxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxxxx X, Xxxxxxxxx, Xxxxxxx 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 X. Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxx 00 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
000 Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 X. Xxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00, 00xx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx R.R. #3 Vanessa, Delhi Township, Delhi, Ontario
---------------------------------------------------------------- ----------------------------------------------------------------
0000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
----------------------------------------------------------------
0000 Xxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx
----------------------------------------------------------------
000 Xxxxxxxx Xxxxxx, Xxxx, Xxxxxxxxx
----------------------------------------------------------------
0000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx
----------------------------------------------------------------
0000 Xxxxx XxXxxx Xxxxxx, Xxxxx, Xxxxxxx
----------------------------------------------------------------
0 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx
----------------------------------------------------------------
000 X. Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxx
----------------------------------------------------------------
EXHIBIT A-1
================================================================================
FORM OF U.S. GUARANTEE AND COLLATERAL AGREEMENT
made by
INTERNATIONAL MULTIFOODS CORPORATION,
and certain of its Subsidiaries
in favor of
CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent
Dated as of ____________, 2001
================================================================================
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINED TERMS....................................................................................1
1.1. Definition.......................................................................................1
1.2. Other Definitional Provisions....................................................................6
SECTION 2. GUARANTEE........................................................................................6
2.1. Guarantee........................................................................................6
2.2. Right of Contribution............................................................................7
2.3. No Subrogation...................................................................................7
2.4. Amendments, etc. with respect to the Borrower Obligations........................................7
2.5. Guarantee Absolute and Unconditional.............................................................8
2.6. Reinstatement....................................................................................9
2.7. Payments.........................................................................................9
SECTION 3. GRANT OF SECURITY INTEREST.......................................................................9
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................................................10
4.1. Title; No Other Liens...........................................................................10
4.2. Perfected First Priority Liens..................................................................10
4.3. Jurisdiction of Organization; Chief Executive Office............................................10
4.4. Inventory and Equipment.........................................................................10
4.5. Farm Products...................................................................................10
4.6. Investment Property.............................................................................10
4.7. Receivables.....................................................................................11
4.8. Contracts.......................................................................................11
4.9. Intellectual Property...........................................................................12
SECTION 5. COVENANTS.......................................................................................12
5.1. Delivery of Instruments, Certificated Securities and Chattel Paper..............................12
5.2. Maintenance of Insurance........................................................................13
5.3. Payment of Obligations..........................................................................13
5.4. Maintenance of Perfected Security Interest; Further Documentation...............................13
5.5. Changes in Locations, Name, etc.................................................................14
5.6. Notices.........................................................................................14
5.7. Investment Property.............................................................................14
5.8. Receivables.....................................................................................15
5.9. Contracts.......................................................................................15
5.10. Intellectual Property...........................................................................16
SECTION 6. REMEDIAL PROVISIONS.............................................................................17
6.1. Certain Matters Relating to Receivables.........................................................17
6.2. Communications with Obligors; Grantors Remain Liable............................................18
6.3. Pledged Stock; Pledged Notes....................................................................18
6.4. Proceeds to be Turned Over To Collateral Agent..................................................19
PAGE
----
6.5. Application of Proceeds.........................................................................19
6.6. Code and Other Remedies.........................................................................20
6.7. Registration Rights.............................................................................20
6.8. Deficiency......................................................................................21
SECTION 7. THE COLLATERAL AGENT............................................................................21
7.1. Collateral Agent's Appointment as Attorney-in-Fact, etc.........................................21
7.2. Duty of Collateral Agent........................................................................22
7.3. Execution of Financing Statements...............................................................23
7.4. Authority of Collateral Agent...................................................................23
SECTION 8. MISCELLANEOUS...................................................................................23
8.1. Amendments in Writing...........................................................................23
8.2. Notices.........................................................................................23
8.3. No Waiver by Course of Conduct; Cumulative Remedies.............................................23
8.4. Enforcement Expenses; Indemnification...........................................................24
8.5. Successors and Assigns..........................................................................24
8.6. Set-Off.........................................................................................24
8.7. Counterparts....................................................................................24
8.8. Severability....................................................................................25
8.9. Section Headings................................................................................25
8.10. Integration.....................................................................................25
8.11. GOVERNING LAW...................................................................................25
8.12. Submission To Jurisdiction; Waivers.............................................................25
8.13. Acknowledgements................................................................................25
8.14. Additional Loan Parties.........................................................................26
8.15. Releases ..............................................................................26
8.16. WAIVER OF JURY TRIAL............................................................................26
8.17. Grantors' Obligations...........................................................................26
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 4.6 Third Party Record Ownership of Investment Property
Schedule 4.8 Contracts with Governmental Authorities
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
Schedule 7 Contracts
ii
U.S. GUARANTEE AND COLLATERAL AGREEMENT
U.S. GUARANTEE AND COLLATERAL AGREEMENT, dated as of
____________, 2001, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the "LOAN
PARTIES"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, as collateral agent
(in such capacity, the "COLLATERAL AGENT") for the Secured Parties referred to
below.
W I T N E S S E T H:
WHEREAS, pursuant to the
Credit Agreement, dated as of
September 28, 2001 (as amended, supplemented or otherwise modified from time to
time, the "
CREDIT AGREEMENT"), among
INTERNATIONAL MULTIFOODS CORPORATION, a
Delaware corporation (the "U.S. BORROWER"), XXXXX XXXX MULTIFOODS INC., an
Ontario corporation and a Subsidiary of the U.S. Borrower (the "CANADIAN
BORROWER" and, together with the U.S. Borrower, the "BORROWERS"), the banks and
other financial institutions from time to time parties thereto (the "LENDERS"),
Rabobank International, as Documentation Agent, U.S. Bank National Association
and UBS Warburg LLC, as Syndication Agents, and Canadian Imperial Bank of
Commerce, as administrative agent for the U.S. Lenders (in such capacity, the
"U.S. ADMINISTRATIVE AGENT") and as administrative agent for the Canadian
Lenders (in such capacity, the "CANADIAN ADMINISTRATIVE AGENT"), the Lenders
have severally agreed to make extensions of credit to the Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes each other Loan Party;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Loan Parties in connection with the
operation of their respective businesses;
WHEREAS, the Borrowers and the other Loan Parties are engaged
in related businesses, and each Loan Party will derive substantial direct and
indirect benefit from the making of the extensions of credit under the
Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Loan Parties shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Secured
Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agents and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Loan Party hereby agrees with the Collateral Agent,
for the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined : Accounts, Certificated Security, Chattel Paper,
2
Commercial Tort Claims, Documents, Equipment, Farm Products, Instruments,
Inventory, Letter-of-Credit Rights and Supporting Obligations.
(b) The following terms shall have the following
meanings:
"AGREEMENT": this U.S. Guarantee and Collateral Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
"BORROWER OBLIGATIONS": (a) in the case of each of the
U.S. Subsidiary Guarantors, the collective reference to the U.S. Borrower
Obligations and the Canadian Borrower Obligations, and (b) in the case of
each of the Canadian Subsidiary Guarantors and the U.S. Borrower, the
Canadian Borrower Obligations.
"CANADIAN BORROWER OBLIGATION GUARANTORS" or "CBO
GUARANTORS": the collective reference to each Loan Party other than the
Canadian Borrower.
"CANADIAN BORROWER OBLIGATIONS": the collective reference to
the unpaid principal of and interest on the Canadian Loans and Canadian
Reimbursement Obligations and all other obligations and liabilities of the
Canadian Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Canadian Loans and Canadian Reimbursement Obligations and interest accruing at
the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Canadian Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent, either Administrative Agent or any Lender
(or, in the case of any Canadian Borrower Specified Hedge Agreement, any Lender
Affiliate or any other counterparty thereto), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, this Agreement, the other Loan Documents, any Canadian Letter of
Credit, any Canadian Borrower Specified Hedge Agreement or any other document
made, delivered or given in connection with any of the foregoing, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Collateral Agent, either Administrative
Agent or to the Lenders that are required to be paid by the Canadian Borrower
pursuant to the terms of any of the foregoing agreements).
"COLLATERAL": as defined in Section 3.
"COLLATERAL ACCOUNT": any collateral account established
by the Collateral Agent as provided in Section 6.1 or 6.4.
"CONTRACTS": the contracts and agreements listed in Schedule
7, as the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to receive
moneys due and to become due to it thereunder or in connection therewith, (ii)
all rights of any Grantor to damages arising thereunder and (iii) all rights of
any Grantor to perform and to exercise all remedies thereunder.
"COPYRIGHT LICENSES": any written agreement naming any Grantor
as licensor or licensee now or hereafter in effect, (including, without
limitation, those listed in SCHEDULE 6), granting any right under any copyright
arising under the laws of the United States or Canada, including, without
limitation, the grant of rights to reproduce, distribute, perform, display,
exploit and sell materials derived from any such copyright.
3
"COPYRIGHTS": (i) all copyright rights owned by any Grantor
arising under the laws of the United States or Canada, whether as author,
assignee, transferee or otherwise; (ii) all copyrights owned by any Grantor
arising under the laws of the United States or Canada, whether registered or
unregistered and whether published or unpublished, and all registrations,
supplemental registrations, and applications for registration in the United
States Copyright Office or in any similar office or agency in Canada, including,
without limitation, those listed on Schedule 6; and (iii) all rights owned by
any Grantor to obtain all renewals thereof.
"DEPOSIT ACCOUNT": as defined in the Uniform Commercial
Code of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account maintained
with a depositary institution.
"FOREIGN INTELLECTUAL PROPERTY": intellectual property of
any Grantor which arises under or is governed by laws of a country (or a
political subdivision thereof) other than the United States or Canada.
"FOREIGN SUBSIDIARY": any Subsidiary organized under the
laws of any jurisdiction outside of the United States.
"FOREIGN SUBSIDIARY VOTING STOCK": the voting Capital
Stock of any Foreign Subsidiary.
"GENERAL INTANGIBLES": all "general intangibles" as such
term is defined in Section 9-102 of the Uniform Commercial Code in effect in
the State of New York on the date hereof and, in any event, excluding all
Foreign Intellectual Property and Restricted Intellectual Property and
otherwise including, without limitation, with respect to any Grantor, all
contracts, agreements, instruments and indentures in any form, and portions
thereof, to which such Grantor is a party or under which such Grantor has any
right, title or interest or to which such Grantor or any property of such
Grantor is subject, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of such Grantor to
damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder, in each case to the extent the terms
thereof (after giving effect to any consent that has been obtained, it being
understood that such Grantor is not obligated to obtain any such consent) do
not prohibit the grant by such Grantor of a security interest pursuant to
this Agreement in its right, title and interest therein without the consent
of any other party thereto and do not give any other party thereto the right
to terminate its obligations thereunder; PROVIDED, that the foregoing
limitation shall not affect, limit, restrict or impair the grant by such
Grantor of a security interest pursuant to this Agreement in any Receivable
or any money or other amounts due or to become due or other right to payment
under any such contract, agreement, instrument or indenture.
"GRANTOR": each Loan Party other than the Canadian
Borrower, the Canadian Subsidiary Guarantors and Inversiones 91060, C.A.
"GUARANTOR GROUP": as defined in Section 2.2
"GUARANTORS": the collective reference to the CBO
Guarantors and the USBO Guarantors and "GUARANTOR" means any one of them.
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property owned or
hereafter acquired by any Grantor, whether arising under United States or
Canadian laws or otherwise, specifically excluding all Foreign Intellectual
Property and Restricted Intellectual Property and otherwise including, without
limitation, the Copyrights, the Copyright
4
Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark
Licenses, all trade secrets, all confidential or proprietary information and
all rights to xxx at law or in equity for any infringement or other
impairment thereof, including all rights owned by any Grantor to receive all
proceeds and damages therefrom.
"INTERCOMPANY NOTE": any promissory note evidencing loans
made by any Grantor to the U.S. Borrower or any of its Subsidiaries.
"INVESTMENT PROPERTY": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102 of the New York
UCC (other than any Foreign Subsidiary Voting Stock excluded from the definition
of "Pledged Stock") and (ii) whether or not constituting "investment property"
as so defined, all Pledged Notes and all Pledged Stock.
"ISSUERS": the collective reference to each issuer of any
Investment Property.
"NEW YORK UCC": the Uniform Commercial Code as from time
to time in effect in the State of New York.
"PATENT LICENSE": all agreements, whether written or oral now
or hereafter in effect, providing for the grant by or to any Grantor of any
right to manufacture, use or sell any invention covered in whole or in part by a
patent of the United States or Canada, including, without limitation, any of the
foregoing referred to in SCHEDULE 6.
"PATENTS": (i) all letters patent owned by any Grantor of the
United States or Canada, all reissues and extensions thereof owned by any
Grantor, including, without limitation, any of the foregoing referred to in
SCHEDULE 6, (ii) all applications for letters patent owned by any Grantor of the
United States or Canada and all divisions, continuations and
continuations-in-part thereof and the inventions claimed therein owned by any
Grantor, including, without limitation, any of the foregoing referred to in
SCHEDULE 6, and (iii) all rights owned by any Grantor to obtain any reissues or
extensions of the foregoing.
"PLEDGED NOTES": all promissory notes listed on SCHEDULE 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business).
"PLEDGED STOCK": the shares of Capital Stock listed on
SCHEDULE 2, together with any other shares, stock certificates, options,
interests or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor while this
Agreement is in effect; PROVIDED that in no event shall (x) more than 66% of the
total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder or (y) the U.S. Borrower be required to pledge
its ownership interest in the Foreign Subsidiary Voting Stock of the Canadian
Borrower pursuant to this Agreement (which Foreign Subsidiary Voting Stock shall
be pledged pursuant to the Canadian Pledge Agreement).
"PROCEEDS": all "proceeds" as such term is defined in Section
9-102 of the Uniform Commercial Code in effect in the State of New York on the
date hereof and, in any event, shall include, without limitation, all dividends
or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.
5
"RECEIVABLE": any right to payment for goods sold or
leased or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"RESTRICTED INTELLECTUAL PROPERTY": non-material intellectual
property licensed to any Grantor (other than any such intellectual property
licensed pursuant to the Acquisition Documentation), to the extent that (a) such
Grantor does not have the right under the applicable license or under applicable
law to grant a security interest therein or comply with the obligations herein
related to such property, or (b) doing so would impair the value of such
property or otherwise subject such Grantor to material penalties or liability.
"SECURED OBLIGATIONS": the obligations secured by the security
interests granted pursuant to Section 3 of this Agreement, which obligations
include the U.S. Borrower Obligations, the Canadian Borrower Obligations and the
obligations of each Grantor under Section 2 hereof (it being understood that the
obligations secured by such security interests do not include the obligations of
the Canadian Borrower or any Guarantor hereunder which is not also a Grantor
(the obligations of the Canadian Borrower and the Canadian Subsidiary Guarantors
being secured pursuant to the Canadian Collateral Agreement)).
"SECURED PARTIES": the collective reference to (i) the Lenders
and their respective successors, indorsees, transferees and assigns, (ii) the
Administrative Agents and their respective successors and assigns in such
capacities, (iii) any Lender Affiliate or any other counterparty party to any
Specified Hedge Agreement, and (iv) the Collateral Agent and its successors and
assigns in such capacity.
"SECURITIES ACT": the Securities Act of 1933, as amended.
"TRADEMARK LICENSE": any agreement, whether written or oral,
now or hereafter in effect, providing for the grant by or to any Grantor of any
right to use any trademark arising under the laws of the United States or
Canada, including, without limitation, any of the foregoing referred to in
SCHEDULE 6.
"TRADEMARKS": (i) all trademarks, trade names, domain names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks and logos arising under the laws of the United States or
Canada owned by any Grantor and other source or business identifiers, and all
goodwill associated therewith or symbolized thereby, now existing or hereafter
adopted or acquired, all registrations and recordings thereof owned by any
Grantor, and all applications in connection therewith owned by any Grantor,
whether in the United States Patent and Trademark Office or in any similar
office or agency of the United States or Canada, or otherwise, and all
common-law rights owned by any Grantor related thereto, including, without
limitation, any of the foregoing referred to in SCHEDULE 6, and (ii) all rights
owned by any Grantor to obtain all renewals thereof.
"U.S. BORROWER OBLIGATION GUARANTORS" or "USBO GUARANTORS":
the collective reference to each Loan Party other than the U.S. Borrower,
the Canadian Borrower and the Canadian Subsidiary Guarantors.
"U.S. BORROWER OBLIGATIONS": the collective reference to the
unpaid principal of and interest on the U.S. Loans and U.S. Reimbursement
Obligations and all other obligations and liabilities of the U.S. Borrower
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the U.S. Loans and U.S.
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the U.S. Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Collateral Agent,
either Administrative Agent or any Lender (or, in the case of
6
any U.S. Borrower Specified Hedge Agreement, any Lender Affiliate or any
other counterparty thereto), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit Agreement,
this Agreement, the other Loan Documents, any U.S. Letter of Credit, any U.S.
Borrower Specified Hedge Agreement or any other document made, delivered or
given in connection with any of the foregoing, in each case whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Collateral Agent, either Administrative Agent
or to the Lenders that are required to be paid by the U.S. Borrower pursuant
to the terms of any of the foregoing agreements).
"VEHICLES": all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of title
law of any state and, in any event including, without limitation, all tires
and other appurtenances to any of the foregoing.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) Each of the USBO Guarantors hereby,
jointly and severally, unconditionally and irrevocably, guarantees to the
Collateral Agent, for the ratable benefit of the Secured Parties, the prompt
and complete payment and performance by the U.S. Borrower when due (whether
at the stated maturity, by acceleration or otherwise) of the U.S. Borrower
Obligations and each of the CBO Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Collateral Agent, for the
ratable benefit of the Secured Parties, the prompt and complete payment and
performance by the Canadian Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Canadian Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal, state and provincial laws
relating to the insolvency of debtors (after giving effect to the right of
contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at
any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Collateral Agent or any Lender
hereunder.
(d) The guarantee of each Guarantor contained in this Section
2 shall remain in full force and effect until all the Borrower Obligations of
such Guarantor and the obligations of such Guarantor with respect to such
Borrower Obligations under the guarantee contained in this Section 2 shall have
been satisfied by payment in full, no Letter of Credit constituting part of the
relevant Borrower
7
Obligations shall be outstanding and the relevant Commitments shall be
terminated, notwithstanding that from time to time during the term of the
Credit Agreement the Canadian Borrower or the U.S. Borrower, as the case may
be, may be free from any Borrower Obligations.
(e) No payment made by either Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected
by the Collateral Agent, either Administrative Agent or any Lender from
either Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation
or application at any time or from time to time in reduction of or in payment
of the Borrower Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower Obligations), remain
liable for its respective Borrower Obligations up to the maximum liability of
such Guarantor hereunder until its respective Borrower Obligations are paid
in full, no Letter of Credit constituting part of the relevant Borrower
Obligations shall be outstanding and the relevant Commitments are terminated.
2.2 RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby
agrees that to the extent that another Subsidiary Guarantor that guarantees
the same Borrower Obligations (all Subsidiary Guarantors which guarantee the
same Borrower Obligations being referred to collectively as a "GUARANTOR
GROUP") shall have paid more than its proportionate share (based upon the
respective net worths of the members of the applicable Guarantor Group at the
time of payment) of any payment made hereunder, such overpaying Subsidiary
Guarantor shall be entitled to seek and receive contribution from and against
any other Subsidiary Guarantor that guarantees the same Borrower Obligations
hereunder which has not paid its proportionate share (based upon the
respective net worths of the members of the applicable Guarantor Group at the
time of payment) of such payment. Each Subsidiary Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Subsidiary Guarantor to the Collateral Agent, the
Administrative Agents and the Lenders, and each Subsidiary Guarantor shall
remain liable to the Collateral Agent, the Administrative Agents and the
Secured Parties for the full amount guaranteed by such Subsidiary Guarantor
hereunder.
2.3 NO SUBROGATION. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Collateral Agent, either Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights of the
Collateral Agent, either Administrative Agent or any Lender against the
Borrowers or any Guarantor or any collateral security or guarantee or right
of offset held by the Collateral Agent, either Administrative Agent or any
Lender for the payment of the Borrower Obligations, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from the
Borrowers or any Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Collateral Agent, either
Administrative Agent and the Lenders by the Borrowers on account of the
Borrower Obligations are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated. If any amount shall be paid
to any Guarantor on account of such subrogation rights at any time when all
of the Borrower Obligations shall not have been paid in full, such amount
shall be held by such Guarantor in trust for the Collateral Agent, either
Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Collateral Agent in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Collateral Agent, if required), to be
applied against the Borrower Obligations, whether matured or unmatured, in
such order as the Collateral Agent may determine.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any
8
Guarantor and without notice to or further assent by any Guarantor, any
demand for payment of any of the Borrower Obligations made by the Collateral
Agent, either Administrative Agent or any Lender may be rescinded by the
Collateral Agent, such Administrative Agent or such Lender and any of the
Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the
Collateral Agent, either Administrative Agent or any Lender, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agents (or the
Required Lenders or all Lenders, as the case may be) may deem advisable from
time to time, and any collateral security, guarantee or right of offset at
any time held by the Collateral Agent, either Administrative Agent or any
Lender for the payment of the Borrower Obligations may be sold, exchanged,
waived, surrendered or released. None of the Collateral Agent, either
Administrative Agent or any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of
any of the Borrower Obligations and notice of or proof of reliance by the
Collateral Agent, either Administrative Agent or any Lender upon the
guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrowers and any
of the Guarantors, on the one hand, and the Collateral Agent, the
Administrative Agents and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment
to or upon either of the Borrowers or any of the Guarantors with respect to
the Borrower Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Collateral Agent, either Administrative Agent
or any Lender, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be
asserted by either of the Borrowers or any other Person against the
Collateral Agent, either Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the
Borrowers or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrowers for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Collateral Agent, either Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against the
Borrowers, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset
with respect thereto, and any failure by the Collateral Agent, either
Administrative Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Borrowers, any
Guarantor or any other Person or to realize upon any such collateral security
or guarantee or to exercise any such right of offset, or any release of the
Borrowers, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of
any obligation or liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of
law,
9
of the Collateral Agent, either Administrative Agent or any Lender against
any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
2.6 REINSTATEMENT. The guarantee of each Guarantor
contained in this Section 2 shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of
the Borrower Obligations of such Guarantor is rescinded or must otherwise be
restored or returned by the Collateral Agent, either Administrative Agent or
any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of either Borrower or any Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, either Borrower or any Guarantor or any substantial part
of its property, or otherwise, all as though such payments had not been made.
2.7 PAYMENTS. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Collateral Agent without set-off or
counterclaim in Dollars, at the Funding Office specified in the Credit
Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property
(l) all Letter-of-Credit Rights;
(m) all Vehicles;
(n) all Commercial Tort Claims with respect to
______________;
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(o) all books and records pertaining to the
Collateral; and
(p) to the extent not otherwise included, all Proceeds,
Supporting Obligations and products of any and all of the foregoing and all
collateral security and guarantees given by any Person with respect to any of
the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agents and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrowers thereunder, each Grantor hereby represents
and warrants to the Collateral Agent, each Administrative Agent and each Lender
that:
4.1 TITLE; NO OTHER LIENS. Except for the security interest
granted to the Collateral Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist on
the Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, pursuant to this Agreement or as are permitted by the
Credit Agreement.
4.2 PERFECTED FIRST PRIORITY LIENS. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and
other actions specified on Schedule 3 (which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Collateral Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral described in said
Schedule in favor of the Collateral Agent in which (x) a security interest
may be perfected by filing under the applicable Uniform Commercial Code or
(y) in which a security interest may be perfected by taking the other actions
described on Schedule 3, for the ratable benefit of the Secured Parties, as
collateral security for the Secured Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior to
all other Liens on the Collateral in existence on the date hereof except for
(i) Liens permitted by the Credit Agreement which have priority over the
Liens on the Collateral by operation of law and (ii) Liens securing the
Medium Term Notes.
4.3 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE.
On the date hereof, such Grantor's jurisdiction of organization and the
location of such Grantor's chief executive office or sole place of business
or principal residence, as the case may be, are specified on Schedule 4.
4.4 INVENTORY AND EQUIPMENT. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the
locations listed on Schedule 5.
4.5 FARM PRODUCTS. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
4.6 INVESTMENT PROPERTY. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such
Grantor or, in the case of Foreign Subsidiary Voting Stock, if less, 66% of
the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
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(c) Each of the Pledged Notes constitutes the legal, valid
and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record (except as set forth on
Schedule 4.6) and beneficial owner of, and has good and marketable title to,
the Investment Property pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person, except the security
interest created by this Agreement and except for Liens permitted by Section
7.3(a) of the Credit Agreement which have priority by operation of law and
Liens securing the Medium Term Notes.
4.7 RECEIVABLES. (a) No amount payable to such Grantor in
excess of $250,000 under or in connection with any Receivable is evidenced by
any Instrument or Chattel Paper which has not been delivered to the
Collateral Agent.
(b) None of the obligors on any Receivables having a value
in excess of $250,000 is a Governmental Authority with respect to which all
requirements of applicable law have not been fulfilled as to perfect and make
fully effective the Lien thereon created hereby.
(c) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will
at such times be accurate.
4.8 CONTRACTS. (a) No consent of any party (other than such
Grantor) to any Contract is required, or purports to be required, in
connection with the execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the parties
thereto, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(c) No consent or authorization of, filing with or other
act by or in respect of any Governmental Authority is required in connection
with the execution, delivery, performance, validity or enforceability of any
of the Contracts by any party thereto other than those which have been duly
obtained, made or performed, are in full force and effect and do not subject
the scope of any such Contract to any material adverse limitation, either
specific or general in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) To the knowledge of such Grantor, the right, title and
interest of such Grantor in, to and under the Contracts are not subject to
any defenses, offsets, counterclaims or claims.
(f) Such Grantor has delivered to the Collateral Agent a
complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in
connection with any Contract is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent.
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(h) Except as set forth on Schedule 4.8, none of the
parties to any Contract is a Governmental Authority.
4.9 INTELLECTUAL PROPERTY. (a) SCHEDULE 6 lists all
Intellectual Property owned by such Grantor in its own name on the date
hereof, other than (i) rights licensed to such Grantor pursuant to licenses
for (A) computer software, or (B) patents, copyrights, trademarks, service
marks, technology, know-how and/or processes which are embedded in equipment
or fixtures, and (ii) copyrights, trademarks, service marks, trade dress,
technology, know-how, inventions and/or processes for which no steps have
been taken to obtain registrations or patents.
(b) On the date hereof, all Intellectual Property is (i)
valid, subsisting, unexpired and enforceable and has not been abandoned and
(ii) does not infringe the intellectual property rights of any other Person,
except to the extent that any of the foregoing could not reasonably be
expected to have a material adverse effect on the value of any material
Intellectual Property.
(c) On the date hereof, none of the material Intellectual
Property is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor, except (i) as set forth in
Schedule 6 or (ii) agreements with Affiliates of such Grantor.
(d) No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect
that could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the
knowledge of such Grantor, threatened, on the date hereof which both (i)
seeks to limit, cancel or question the validity of any Intellectual Property
or such Grantor's ownership interest therein, and (ii) which, if adversely
determined, would have a material adverse effect on the value of any material
Intellectual Property.
(f) For the purposes of Sections 4.9(b)-4.9(e), the term
Intellectual Property shall not include: (i) rights licensed to such Grantor
pursuant to licenses for (A) computer software, or (B) patents, copyrights,
trademarks, service marks, technology, know-how and/or processes which are
embedded in equipment or fixtures, (ii) copyrights, trademarks, service
marks, trade dress, technology, know-how, inventions and/or processes for
which no steps have been taken to obtain registrations or patents, (iii)
except with respect to Section 4.9(b)(ii), any pending applications for any
Copyrights, Trademarks or Patents or (iv) any of the following that are not
registered: corporate names, company names, business names or fictitious
business names.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent,
the Administrative Agents and the Lenders that, from and after the date of this
Agreement until the Secured Obligations shall have been paid in full, no Letter
of Credit shall be outstanding and the Commitments shall have terminated:
5.1 DELIVERY OF INSTRUMENTS, CERTIFICATED SECURITIES AND
CHATTEL PAPER. If any amount payable under or in connection with any of the
Collateral in which such Grantor has an interest shall be or become evidenced
by any Instrument, Certificated Security or Chattel Paper having a value in
excess of $250,000, such Instrument, Certificated Security or Chattel Paper
shall be immediately delivered to the Collateral Agent, duly indorsed in a
manner satisfactory to the Collateral Agent, to be held as Collateral
pursuant to this Agreement.
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5.2 MAINTENANCE OF INSURANCE. (a) Such Grantor will
maintain, with financially sound and reputable companies, insurance policies
(i) insuring the Inventory and Equipment and Vehicles against loss by fire,
explosion, theft, water, wind and other casualties as are customarily insured
against by operators of the same or similar businesses in the same or similar
localities and (ii) insuring such Grantor, the Collateral Agent, the
Administrative Agents and the Lenders against liability for personal injury
and property damage relating to such Inventory and Equipment and Vehicles,
such policies to be in such form and amounts and having such coverage as are
customarily insured against by operators of the same or similar businesses in
the same or similar localities.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof, (ii) name the Collateral Agent as
insured party or loss payee, as its interest may appear, (iii) if reasonably
requested by the Collateral Agent, include mortgagee's interest coverage and
(iv) be reasonably satisfactory in all other respects to the Collateral Agent.
(c) Each of the Borrowers shall deliver to the Collateral
Agent, the Administrative Agents and the Lenders an updated insurance
certificate with respect to such insurance substantially concurrently with each
delivery of such Borrower's audited annual financial statements and such
additional information with respect thereto as the Collateral Agent may from
time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or
profits therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect
to the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not
reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.
5.4 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION. (a) Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest to the extent required by
and having at least the priority described in Section 4.2 (other than by
reason of the action or inaction of the Collateral Agent or any Lender) and
shall defend such security interest against the claims and demands of all
Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent, the
Administrative Agents and the Lenders from time to time statements and
schedules further identifying and describing the Collateral of such Grantor
as the Collateral Agent may reasonably request.
(c) At any time and from time to time, upon the written
request of the Collateral Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded,
such further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any
financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction, and any filings, if any,
required to be made in the United States Patent and Trademark Office, the
United States Copyright Office and in any similar offices in Canada with
respect to the security interests created hereby and (ii) in the case of
Investment Property, Deposit Accounts, Letter-of-Credit Rights and any other
relevant Collateral, taking any actions necessary to enable the Collateral
14
Agent to obtain "control" (within the meaning of the applicable Uniform
Commercial Code) with respect thereto; PROVIDED, HOWEVER, that, so long as
the Collateral Agent shall not have otherwise requested at a time when an
Event of Default shall have occurred and be continuing, such Guarantor shall
not be required to take any such action under this clause (ii) with respect
to (x) Deposit Accounts other than the Borrower's concentration accounts, (y)
with respect to Investment Property constituting commodity contracts or (z)
any other Collateral referred to in this clause (ii) until the value of such
other Collateral exceeds $250,000 with respect to any individual item of
Collateral or $1,000,000 in the aggregate for all such items of Collateral.
5.5 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not,
except upon 15 days' prior written notice to the Collateral Agent and
delivery to the Collateral Agent of (a) all additional executed financing
statements and other documents reasonably requested by the Collateral Agent
to maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to SCHEDULE 5
showing any additional location at which Inventory or Equipment shall be kept:
(i) change its jurisdiction of organization
or the location of its chief executive office or sole place of
business or principal residence from that referred to in Section 4.3;
or
(ii) change its name to such an extent that any
financing statement filed by the Collateral Agent in connection with
this Agreement would become misleading for purposes under the
applicable Uniform Commercial Code.
5.6 NOTICES. Such Grantor will advise the Collateral Agent,
the Administrative Agents and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby
or Liens permitted under the Credit Agreement) on any of the Collateral which
would adversely affect the ability of the Collateral Agent to exercise any of
its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereby.
5.7 INVESTMENT PROPERTY. (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights
in respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Secured Parties, hold the same in trust for the
Secured Parties and deliver the same forthwith to the Collateral Agent in the
exact form received, duly indorsed by such Grantor to the Collateral Agent,
if required, together with an undated stock power covering such certificate
duly executed in blank by such Grantor and with, if the Collateral Agent so
requests, signature guaranteed, to be held by the Collateral Agent, subject
to the terms hereof, as additional collateral security for the Secured
Obligations. Any sums paid upon or in respect of the Investment Property upon
the liquidation or dissolution of any Issuer shall be paid over to the
Collateral Agent to be held by it hereunder as additional collateral security
for the Secured Obligations, and in case any distribution of capital shall be
made on or in respect of the Investment Property or any property shall be
distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant
to the
15
reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Collateral Agent, be
delivered to the Collateral Agent to be held by it hereunder as additional
collateral security for the Secured Obligations. If any sums of money or
property so paid or distributed in respect of the Investment Property shall
be received by such Grantor, such Grantor shall, until such money or property
is paid or delivered to the Collateral Agent, hold such money or property in
trust for the Secured Parties, segregated from other funds of such Grantor,
as additional collateral security for the Secured Obligations.
(b) Without the prior written consent of the Collateral
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any Capital Stock of any nature or to issue any
other securities convertible into or granting the right to purchase or
exchange for any Capital Stock of any nature of any Issuer, unless, in the
case of an issuance of Capital Stock, such Grantor (x) provides the
Collateral Agent with five days' prior notice of such issuance and (y)
promptly after such issuance, complies with Section 5.7(a), (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Investment Property or Proceeds thereof (except pursuant to a
transaction not prohibited by the Credit Agreement), (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Investment Property or Proceeds thereof, or any
interest therein, except for the security interests created by this Agreement
and except as permitted by the Credit Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or
the Collateral Agent to sell, assign or transfer any of the Investment
Property or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Collateral Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(a) with respect to the Investment Property issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, MUTATIS MUTANDIS, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Investment Property issued by it.
5.8. RECEIVABLES. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant
any extension of the time of payment of any Receivable, (ii) compromise or
settle any Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any Receivable,
(iv) allow any credit or discount whatsoever on any Receivable or (v) amend,
supplement or modify any Receivable in any manner that could adversely affect
the value thereof.
(b) Such Grantor will deliver to the Collateral Agent a
copy of each material demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of more than 5%
of the aggregate amount of the then outstanding Receivables.
5.9. CONTRACTS. (a) Such Grantor will perform and comply in
all material respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or waive
any provision of any Contract in any manner which could reasonably be expected
to materially adversely affect the value of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each
and every material right which it may have under each Contract (other than any
right of termination).
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(d) Such Grantor will deliver to the Collateral Agent a copy
of each material demand, notice or document received by it relating in any way
to any Contract that questions the validity or enforceability of such Contract.
5.10. INTELLECTUAL PROPERTY. (a) Such Grantor (either
itself or through licensees) will (i) continue to use each material Trademark
on each and every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by
applicable Requirements of Law, (iv) in the United States and Canada, not
adopt or use any xxxx which is confusingly similar or a colorable imitation
of such Trademark unless the Collateral Agent, for the ratable benefit of the
Secured Parties, shall obtain a perfected security interest in such xxxx (or
in the applicable license to use such xxxx if such xxxx is licensed to such
Grantor) pursuant to this Agreement, and (v) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
such Trademark may become invalidated or impaired in any way; PROVIDED,
HOWEVER, any decision made by a Grantor in its reasonable business judgment
to discontinue a product line or product, or modify or update the branding of
a product line or product, such that such Grantor ceases to use (or limit its
use of) a Trademark shall not be claimed a violation of this Section 5.10(a).
(b) To the extent determined by it in its reasonable business
judgment to be advisable, such Grantor (either itself or through licensees) will
not do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) To the extent determined by it in its reasonable business
judgment to be advisable, such Grantor (either itself or through licensees) (i)
will employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees) will not
do any act that uses any material Intellectual Property to infringe the
intellectual property rights of any other Person that would reasonably be likely
to have a Material Adverse Effect.
(e) Such Grantor will notify the Collateral Agent, the
Administrative Agents and the Lenders promptly if it knows, or has reason to
know, that any application or registration relating to any material Copyright,
Patent or Trademark may become forfeited, abandoned or dedicated to the public,
or of any material adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in the United States or Canada)
regarding such Grantor's ownership of, or the validity of, any material
Copyright, Patent or Trademark or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Copyright, Patent or Trademark with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in Canada, such Grantor shall report such filing to the Collateral
Agent together with the delivery of financial statements in accordance with
Section 6.1(a) of the Credit Agreement. Upon request of the Collateral Agent,
such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Agent may
reasonably request to evidence the
17
security interest granted under this Agreement in any Copyright, Patent or
Trademark (other than the Foreign Intellectual Property) and the goodwill of
such Grantor relating thereto or represented thereby.
(g) To the extent determined by it in its reasonable business
judgment, to be advisable, such Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in Canada to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of the
material Copyrights, Patents and Trademarks, including, without limitation,
filing of applications for renewal, affidavits of use and affidavits of
incontestability. Such Grantor shall not abandon or fail to pay any maintenance
fee or annuity due and payable on any material Copyright, Patent or Trademark,
or fail to file any required affidavit or renewal in support thereof, without
first providing the Collateral Agent: (i) sufficient written notice, of at least
90 days, to allow the Collateral Agent to pay timely any such maintenance fees
or annuities which may become due on any of such Copyrights, Patents or
Trademarks, or to file any affidavit or renewal with respect thereto, and (ii) a
separate written power of attorney or other authorization to pay such
maintenance fees or annuities, or to file such affidavit or renewal, should such
be necessary or desirable.
(h) In the event that any material Copyright, Patent or
Trademark is or is about to be infringed, misappropriated or diluted by a third
party, such Grantor shall promptly notify the Collateral Agent after it learns
thereof and shall take such actions as such Grantor shall reasonably deem
appropriate under the circumstances to protect such Copyright, Patent or
Trademark, such as suing for infringement, misappropriation or dilution, seeking
injunctive relief where appropriate and recovering any and all damages for such
infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1. CERTAIN MATTERS RELATING TO RECEIVABLES. (a) At any
time and from time to time (but, so long as no Event of Default shall have
occurred and be continuing, no more often than once during any calendar
year), upon the Collateral Agent's request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Collateral Agent to furnish to the Collateral Agent
reports showing reconciliations and aging of, and trial balances for, the
Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Collateral Agent's direction
and control, and the Collateral Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required by the Collateral Agent at any time after the occurrence and during
the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Collateral Agent if required, in a Collateral
Account maintained under the sole dominion and control of the Collateral Agent,
subject to withdrawal by the Collateral Agent for the account of the
Administrative Agent and the Lenders only as provided in Section 6.5, and (ii)
until so turned over, shall be held by such Grantor in trust for the Collateral
Agent, the Administrative Agents and the Lenders, segregated from other funds of
such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) At the Collateral Agent's request after the occurrence and
during the continuance of an Event of Default, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
18
6.2. COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE.
(a) The Collateral Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts
to verify with them to the Collateral Agent's satisfaction the existence,
amount and terms of any Receivables or Contracts.
(b) Upon the request of the Collateral Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Collateral Agent for the
ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. None of the Collateral Agent, either Administrative Agent
or any Lender shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) or Contract by reason of or arising out of
this Agreement or the receipt by the Collateral Agent, either Administrative
Agent or any Lender of any payment relating thereto, nor shall the Collateral
Agent, either Administrative Agent or any Lender be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3. PLEDGED STOCK; PLEDGED NOTES. (a) Unless an Event of
Default shall have occurred and be continuing and the Collateral Agent shall
have given notice to the relevant Grantor of the Collateral Agent's intent to
exercise its corresponding rights pursuant to Section 6.3(b), each Grantor
shall be permitted to receive all cash dividends paid in respect of the
Pledged Stock and all payments made in respect of the Pledged Notes, in each
case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit
Agreement, and to exercise all voting and corporate or other organizational
rights with respect to the Investment Property provided, however, that no
vote shall be cast or corporate or other organizational right exercised or
other action taken which, in the Collateral Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in
any violation of any provision of the Credit Agreement, this Agreement or any
other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Collateral Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Collateral Agent shall have the right
to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the Secured
Obligations in such order as the Collateral Agent may determine, and (ii)
subject to obtaining requisite consents which shall be promptly obtained by the
relevant Grantor or Grantors, any or all of the Investment Property shall be
registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Investment Property at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate or other organizational
19
structure of any Issuer, or upon the exercise by any Grantor or the
Collateral Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee,
depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Collateral Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.
6.4. PROCEEDS TO BE TURNED OVER TO COLLATERAL AGENT. In
addition to the rights of the Collateral Agent, the Administrative Agents and
the Lenders specified in Section 6.1 with respect to payments of Receivables,
if an Event of Default shall occur and be continuing, all Proceeds received
by any Grantor consisting of cash, checks and other near-cash items shall be
held by such Grantor in trust for the Secured Parties, segregated from other
funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be
turned over to the Collateral Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Collateral Agent, if required).
All Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Collateral Agent in a Collateral
Account (or by such Grantor in trust for the Secured Parties) shall continue
to be held as collateral security for all the Secured Obligations and shall
not constitute payment thereof until applied as provided in Section 6.5.
6.5. APPLICATION OF PROCEEDS. At such intervals as may be
agreed upon by the Borrowers and the Collateral Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Collateral
Agent's election, the Collateral Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and
any proceeds of the guarantee set forth in Section 2, in payment of the
Secured Obligations in the following order:
FIRST, to pay incurred and unpaid fees and expenses of the
Collateral Agent under the Loan Documents;
SECOND, to the Collateral Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect
of the Secured Obligations, PRO RATA among the Lenders according to the
amounts of the Secured Obligations then due and owing and remaining
unpaid to the Lenders;
THIRD, to the Collateral Agent, for application by it towards
prepayment of the Secured Obligations, PRO RATA among the Lenders
according to the amounts of the Secured Obligations then held by the
Lenders, but in the absence of an Event of Default, only to the extent
the Borrowers are required to make such prepayment pursuant to the
Credit Agreement or as the Borrowers may otherwise agree; and
FOURTH, any balance of such Proceeds remaining after the
Secured Obligations shall have been paid in full in cash or other
immediately available funds, no Letters of Credit shall be
20
outstanding and the Commitments shall have been terminated shall be
paid over to the Borrowers or to whomsoever may be lawfully entitled
to receive the same.
6.6. CODE AND OTHER REMEDIES. If an Event of Default shall
occur and be continuing, the Collateral Agent, on behalf of the
Administrative Agents and the Lenders, may exercise, in addition to all other
rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the New York
UCC or any other applicable law. Without limiting the generality of the
foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices
are hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Collateral Agent, either Administrative Agent or any Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Collateral Agent's request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Grantor's premises or
elsewhere. The Collateral Agent shall apply the net proceeds of any action
taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Collateral Agent, the
Administrative Agents and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Secured Obligations, in such order as the Collateral
Agent may elect, and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need
the Collateral Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages
and demands it may acquire against the Collateral Agent, either
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
6.7. REGISTRATION RIGHTS. (a) If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the Collateral Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to cooperate with the Collateral Agent
to effect the registration of such Pledged Stock.
(b) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a
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commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws,
even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Collateral Agent, the
Administrative Agents and the Lenders, that the Collateral Agent, the
Administrative Agents and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred and is continuing under the Credit Agreement.
6.8. DEFICIENCY. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Secured Obligations and the fees and
disbursements of any attorneys employed by the Collateral Agent, either
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1. COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT,
ETC. (a) Each Grantor hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Collateral Agent
the power and right, on behalf of such Grantor, without notice to or assent
by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any
and all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property,
execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's and the Lenders'
security interest in such Intellectual Property and the goodwill of
such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or
any part of the premiums therefor and the costs thereof;
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(iv) execute, in connection with any sale provided
for in Section 6.6 or 6.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
and
(v) (1) direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Collateral Agent or as the
Collateral Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may
deem appropriate; (7) assign any Copyright, Patent or Trademark (along
with the goodwill of the business to which any such Copyright, Patent
or Trademark pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Collateral Agent shall in
its sole reasonable discretion determine; and (8)generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and
do, at the Collateral Agent's option and such Grantor's expense, at any
time, or from time to time, all acts and things which the Collateral
Agent reasonably deems necessary to protect, preserve or realize upon
the Collateral and the Collateral Agent's, the Administrative Agents'
and the Lenders' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary
notwithstanding, the Collateral Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due ABR Loans under
the Credit Agreement, from the date of payment by the Collateral Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2. DUTY OF COLLATERAL AGENT. The Collateral Agent's sole
duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral
Agent deals with similar property for its own account. None of the Collateral
Agent, either Administrative Agent, any
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Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Collateral Agent,
the Administrative Agents and the Lenders hereunder are solely to protect the
Collateral Agent's, the Administrative Agents' and the Lenders' interests in
the Collateral and shall not impose any duty upon the Collateral Agent,
either Administrative Agent or any Lender to exercise any such powers. The
Collateral Agent, the Administrative Agents and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3. EXECUTION OF FINANCING STATEMENTS. Pursuant to any
applicable law, each Grantor authorizes the Collateral Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Collateral Agent reasonably
determines appropriate to perfect the security interests of the Collateral
Agent under this Agreement. Each Grantor authorizes the Administrative Agent
to use the collateral description "all personal property [except for ______]"
in any such financing statements.
7.4. AUTHORITY OF COLLATERAL AGENT. Each Grantor
acknowledges that the rights and responsibilities of the Collateral Agent
under this Agreement with respect to any action taken by the Collateral Agent
or the exercise or non-exercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Grantors, the Collateral Agent
shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.
SECTION 8. MISCELLANEOUS
8.1. AMENDMENTS IN WRITING. None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 10.1 of the Credit Agreement.
8.2. NOTICES. All notices, requests and demands to or upon
the Collateral Agent or any Loan Party hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement; PROVIDED that
any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on SCHEDULE 1.
8.3. NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES.
None of the Collateral Agent, either Administrative Agent or any Lender shall
by any act (except by a written instrument pursuant to Section 8.1), delay,
indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent, either Administrative Agent or any Lender, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Collateral Agent, either Administrative
Agent or any Lender of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any
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right or remedy which the Collateral Agent, such Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any other rights or remedies provided by law.
8.4. ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each
Guarantor agrees to pay or reimburse the Collateral Agent, each Lender and
each Administrative Agent for all of its costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2
or otherwise enforcing or preserving any rights under this Agreement and the
other Loan Documents to which such Guarantor is a party, including, without
limitation, the fees and disbursements of counsel (including the allocated
fees and expenses of in-house counsel) to each Lender and of counsel to the
Collateral Agent and each Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Collateral
Agent, the Administrative Agents and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Collateral
Agent and the Lenders harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Borrowers would be required to do so pursuant to Section 10.5 of the
Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment
of the Secured Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the successors and assigns of each Loan Party and shall inure to
the benefit of the Collateral Agent, the Administrative Agents and the
Lenders and their successors and assigns; PROVIDED that no Loan Party may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent.
8.6. SET-OFF. In addition to any rights and remedies of the
Secured Parties provided by law, each Secured Party shall have the right,
without prior notice to the Loan Parties, any such notice being expressly
waived by each Loan Party to the extent permitted by applicable law, upon any
amount becoming due and payable by such Loan Party hereunder or under any
other Loan Document (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount 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 Secured Party or any branch or
agency thereof to or for the credit or the account of such Loan Party, as the
case may be. Each Secured Party agrees promptly to notify the Borrowers and
the Administrative Agents after any such setoff and application made by such
Secured Party, PROVIDED that the failure to give such notice shall not affect
the validity of such setoff and application.
8.7. COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
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8.8. SEVERABILITY. Any provision of this 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.
8.9. SECTION HEADINGS. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
8.10. INTEGRATION. This Agreement and the other Loan
Documents represent the agreement of the Loan Parties, the Collateral Agent,
Administrative Agents and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations
or warranties by the Collateral Agent, either Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth
or referred to herein or in the other Loan Documents.
8.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
8.12. SUBMISSION TO JURISDICTION; WAIVERS. Each Loan Party
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such Loan
Party at its address referred to in Section 8.2 or at such other address of
which the Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
8.13. ACKNOWLEDGEMENTS. Each Loan Party hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to
which it is a party;
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(b) none of the Collateral Agent, either Administrative Agent
or any Lender has any fiduciary relationship with or duty to any Loan Party
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Loan Parties, on the one hand, and
the Collateral Agent, the Administrative Agents and Lenders, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Loan Parties and the Lenders.
8.14. ADDITIONAL LOAN PARTIES. Each Subsidiary of the
Borrowers that is required to become a party to this Agreement pursuant to
Section 6.9 of the Credit Agreement shall (a) to the extent such Subsidiary
is a U.S. Subsidiary Guarantor, become a Guarantor, a Grantor and a Loan
Party for all purposes of this Agreement and (b) to the extent such
Subsidiary is a Canadian Subsidiary Guarantor, become a CBO Guarantor and a
Loan Party for all purposes under this Agreement, in either case upon
execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.15. RELEASES. (a) At such time as the Loans, the
Reimbursement Obligations and the other Secured Obligations (other than
Secured Obligations in respect of Specified Hedge Agreements) shall have been
paid in full, the Commitments have been terminated and no Letters of Credit
shall be outstanding, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Collateral Agent and each Loan
Party hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Loan Parties. At the request and sole expense of any Loan Party
following any such termination, the Collateral Agent shall deliver to such
Loan Party any Collateral held by the Collateral Agent hereunder, and execute
and deliver to such Loan Party such documents as such Loan Party shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Loan Party in a transaction permitted by the Credit
Agreement, then the Collateral Agent, at the request and sole expense of such
Loan Party, shall execute and deliver to such Loan Party all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrowers, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; PROVIDED that the Borrowers shall have delivered to the Collateral
Agent, at least five Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Subsidiary Guarantor and
the terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
certification by the Borrowers stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents.
8.16. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
8.17. GRANTORS' OBLIGATIONS. Notwithstanding anything
herein to the contrary, (i) each Grantor's obligations hereunder with respect
to Collateral is limited to Collateral in which such Grantor has an interest;
and (ii) any reports or other deliveries required by a Grantor hereunder
shall be effective if made by one of the Borrowers or by any other Grantor
hereunder.
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above written.
INTERNATIONAL MULTIFOODS CORPORATION
By:
-------------------------------------------
Name:
[GUARANTORS]
EXHIBIT A-2
FORM OF CANADIAN COLLATERAL AGREEMENT
CANADIAN COLLATERAL AGREEMENT, dated as of _____________,
2001, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "GRANTORS"), in favor of
CANADIAN IMPERIAL BANK OF COMMERCE, as collateral agent (in such capacity, the
"COLLATERAL AGENT") for the Secured Parties referred to below.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of
September 28, 2001 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among
INTERNATIONAL MULTIFOODS CORPORATION, a
Delaware corporation (the "U.S. BORROWER"), XXXXX XXXX MULTIFOODS INC., an
Ontario corporation and a Subsidiary of the U.S. Borrower (the "CANADIAN
BORROWER" and, together with the U.S. Borrower, the "BORROWERS"), the banks and
other financial institutions from time to time parties thereto (the "LENDERS"),
Rabobank International, as Documentation Agent, U.S. Bank National Association
and UBS Warburg LLC, as Syndication Agents, and Canadian Imperial Bank of
Commerce, as administrative agent for the U.S. Lenders (in such capacity, the
"U.S. ADMINISTRATIVE AGENT") and as administrative agent for the Canadian
Lenders (in such capacity, the "CANADIAN ADMINISTRATIVE AGENT"), the Lenders
have severally agreed to make extensions of credit to the Borrowers upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes each other Loan Party;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Loan Parties in connection with the
operation of their respective businesses;
WHEREAS, the Borrowers and the other Loan Parties are engaged
in related businesses, and each Loan Party will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Secured
Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agents and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrowers thereunder, each Grantor hereby agrees with the Collateral Agent, for
the ratable benefit of the Secured Parties, as follows:
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SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. 1) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement, and the following terms which are defined in the PERSONAL PROPERTY
SECURITY ACT in effect in the Province of Ontario on the date hereof are used
herein as so defined : Accounts, Securities, Chattel Paper, Goods, Documents of
Title, Equipment, Consumer Goods, Instruments, Inventory and Money.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Canadian Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"CANADIAN BORROWER OBLIGATION GUARANTORS" or "CBO
GUARANTORS": the collective reference to each Grantor other than the
Canadian Borrower.
"CANADIAN BORROWER OBLIGATIONS": the collective reference to
the unpaid principal of and interest on the Canadian Loans and Canadian
Reimbursement Obligations and all other obligations and liabilities of the
Canadian Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Canadian Loans and Canadian Reimbursement Obligations and interest accruing at
the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Canadian Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent, either Administrative Agent or any Lender
(or, in the case of any Canadian Borrower Specified Hedge Agreement, any Lender
Affiliate or any other counterparty thereto), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, this Agreement, the other Loan Documents, any Canadian Letter of
Credit, any Canadian Borrower Specified Hedge Agreement or any other document
made, delivered or given in connection with any of the foregoing, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Collateral Agent, either Administrative
Agent or to the Lenders that are required to be paid by the Canadian Borrower
pursuant to the terms of any of the foregoing agreements).
"COLLATERAL": as defined in Section 2.
"COLLATERAL ACCOUNT": any collateral account established
by the Collateral Agent as provided in Section 5.1 or 5.4.
"CONTRACTS": the contracts and agreements listed in SCHEDULE
7, as the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to receive
moneys due and to become due to it thereunder or in connection therewith, (ii)
all rights of any Grantor to damages arising thereunder and (iii) all rights of
any Grantor to perform and to exercise all remedies thereunder.
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"COPYRIGHT LICENSES": any written agreement naming any
Grantor as licensor or licensee now or hereafter in effect, (including,
without limitation, those listed in SCHEDULE 6), granting any right under any
copyright arising under the laws of the United States or Canada, including,
without limitation, the grant of rights to reproduce, distribute, perform,
display, exploit and sell materials derived from any such copyright.
"COPYRIGHTS": (i) all copyright rights owned by any Grantor
arising under the laws of the United States or Canada, whether as author,
assignee, transferee or otherwise; (ii) all copyrights owned by any Grantor
arising under the laws of the United States or Canada, whether registered or
unregistered and whether published or unpublished, and all registrations,
supplemental registrations, and applications for registration in the United
States Copyright Office or in any similar office or agency in Canada,
including, without limitation, those listed on Schedule 6; and (iii) all
rights owned by any Grantor to obtain all renewals thereof.
"DEPOSIT ACCOUNT": any demand, time, savings, passbook or
like account maintained with a depositary institution.
"FOREIGN INTELLECTUAL PROPERTY": intellectual property of
any Grantor which arises under or is governed by laws of a country (or a
political subdivision thereof) other than the United States or Canada.
"INTANGIBLES": all "intangibles" as such term is defined in
Section 1(1) of the PPSA in effect in the Province of Ontario on the date
hereof and, in any event, excluding all Foreign Intellectual Property and
Restricted Intellectual Property and otherwise including, without limitation,
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a
party or under which such Grantor has any right, title or interest or to
which such Grantor or any property of such Grantor is subject, as the same
may from time to time be amended, supplemented or otherwise modified,
including, without limitation, (i) all rights of such Grantor to receive
moneys due and to become due to it thereunder or in connection therewith,
(ii) all rights of such Grantor to damages arising thereunder and (iii) all
rights of such Grantor to perform and to exercise all remedies thereunder, in
each case to the extent the terms thereof (after giving effect to any consent
that has been obtained, it being understood that such Grantor is not
obligated to obtain any such consent) do not prohibit the grant by such
Grantor of a security interest pursuant to this Agreement in its right, title
and interest therein without the consent of any other party thereto and do
not give any other party thereto the right to terminate its obligations
thereunder; PROVIDED, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest pursuant
to this Agreement in any Receivable or any money or other amounts due or to
become due or other right to payment under any such contract, agreement,
instrument or indenture.
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property owned or
hereafter acquired by any Grantor, whether arising under United States or
Canadian laws or otherwise, specifically excluding all Foreign Intellectual
Property and Restricted Intellectual Property and otherwise including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark Licenses, all trade secrets, all
confidential or proprietary
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information and all rights to xxx at law or in equity for any infringement or
other impairment thereof, including all rights owned by any Grantor to
receive all proceeds and damages therefrom.
"INTERCOMPANY NOTE": any promissory note evidencing loans
made by any Grantor to the U.S. Borrower or any of its Subsidiaries.
"ISSUERS": the collective reference to each issuer of any
Securities.
"PATENT LICENSE": all agreements, whether written or oral
now or hereafter in effect, providing for the grant by or to any Grantor of
any right to manufacture, use or sell any invention covered in whole or in
part by a patent of the United States or Canada, including, without
limitation, any of the foregoing referred to in SCHEDULE 6.
"PATENTS": (i) all letters patent owned by any Grantor of
the United States or Canada, all reissues and extensions thereof owned by any
Grantor, including, without limitation, any of the foregoing referred to in
SCHEDULE 6, (ii) all applications for letters patent owned by any Grantor of
the United States or Canada and all divisions, continuations and
continuations-in-part thereof and the inventions disclosed or claimed therein
owned by any Grantor, including, without limitation, any of the foregoing
referred to in SCHEDULE 6, and (iii) all rights owned by any Grantor to
obtain any reissues or extensions of the foregoing.
"PLEDGED NOTES": all promissory notes listed on SCHEDULE 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor in
the ordinary course of business).
"PLEDGED STOCK": the shares of Capital Stock listed on
SCHEDULE 2, together with any other shares, stock certificates, options,
interests or rights of any nature whatsoever in respect of the Capital Stock
of any Person that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect.
"PPSA": the PERSONAL PROPERTY SECURITY ACT.
"PROCEEDS": all "proceeds" as such term is defined in the PPSA
in effect in the Province of Ontario on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from Securities,
collections thereon or distributions or payments with respect thereto.
"RECEIVER": a receiver, a manager or a receiver and
manager.
"RECEIVABLE": any right to payment for goods sold or
leased or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"RESTRICTED INTELLECTUAL PROPERTY": non-material
intellectual property licensed to any Grantor (other than any such
intellectual property licensed pursuant to the Acquisition Documentation), to
the extent that (a) such Grantor does not have the right under the applicable
5
license or under applicable law to grant a security interest therein or
comply with the obligations herein related to such property, or (b) doing so
would impair the value of such property or otherwise subject such Grantor to
material penalties or liability.
"SECURED OBLIGATIONS": the obligations secured by the
security interests granted pursuant to Section 2 of this Agreement, which
obligations consist of (i) the Canadian Borrower Obligations and (ii) the
obligations of each Canadian Subsidiary Guarantor under Section 2 of the U.S.
Guarantee and Collateral Agreement.
"SECURED PARTIES": the collective reference to (i) the
Lenders and their respective successors, indorsees, transferees and assigns,
(ii) the Administrative Agents and their respective successors and assigns in
such capacities, (iii) any Lender Affiliate or any other counterparty party
to any Specified Hedge Agreement, and (iv) the Collateral Agent and its
successors and assigns in such capacity.
"SECURITIES": the collective reference to (i) all
"security" as such term is defined in Section 1(1) of the PPSA in effect in
the Province of Ontario and (ii) whether or not constituting "a security" as
so defined, all Pledged Notes and all Pledged Stock.
"TRADEMARK LICENSE": any agreement, whether written or
oral, now or hereafter in effect, providing for the grant by or to any
Grantor of any right to use any trademark arising under the laws of the
United States or Canada, including, without limitation, any of the foregoing
referred to in SCHEDULE 6.
"TRADEMARKS": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks and logos arising under the laws of the United States
or Canada owned by any Grantor and other source or business identifiers, and
all goodwill associated therewith or symbolized thereby, now existing or
hereafter adopted or acquired, all registrations and recordings thereof owned
by any Grantor, and all applications in connection therewith owned by any
Grantor, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States or Canada, or otherwise, and
all common-law rights owned by any Grantor related thereto, including,
without limitation, any of the foregoing referred to in SCHEDULE 6, and (ii)
all rights owned by any Grantor to obtain all renewals thereof.
"VEHICLES": all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of title
law of any province and, in any event including, without limitation, all
tires and other appurtenances to any of the foregoing.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof," "herein", "hereto"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
SECTION 2 GRANT OF SECURITY INTEREST
2.1 Each Grantor hereby assigns and transfers to the Collateral Agent,
and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Deposit Accounts;
(e) all Documents of Title;
(f) all Equipment;
(g) all Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Securities;
(l) all Vehicles;
(m) all Goods;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to
any of the foregoing.
2.2 ATTACHMENT. Each Grantor confirms that value has been given by the
Secured Parties to each Grantor, that such Grantor has rights in the Collateral
owned by such Grantor
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(other than after acquired property) and that the Grantors and the Collateral
Agent have not agreed to postpone the time for attachment of the Liens
created by this Agreement to any of the Collateral.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agents and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrowers thereunder, each Grantor hereby represents
and warrants to the Collateral Agent, each Administrative Agent and each Lender
that:
3.1 TITLE; NO OTHER LIENS. Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement or as are permitted by the Credit Agreement.
3.2 PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Collateral Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral described in said Schedule in favor of the
Collateral Agent in which (x) a security interest may be perfected by filing
under the appropriate PPSA, or (y) in which a security interest may be perfected
by taking the other actions described in Schedule 3, for the ratable benefit of
the Secured Parties, as collateral security for the Secured Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
and (b) are prior to all other Liens on the Collateral in existence on the date
hereof except for (i) Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law and (ii) Liens
securing the Medium Term Notes.
3.3 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE. On the date
hereof, such Grantor's jurisdiction of organization and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4.
3.4 INVENTORY AND EQUIPMENT. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
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3.5 CONSUMER GOODS. None of the Collateral constitutes Consumer Goods.
3.6 PLEDGED STOCK. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record (except as set forth on Schedule 3.6)
and beneficial owner of, and has good and marketable title to, the Securities
pledged by it hereunder, free of any and all Liens or options in favor of, or
claims of, any other Person, except the security interest created by this
Agreement and except for (i) Liens permitted by Section 7.3(a) of the Credit
Agreement which have priority by operation of law and (ii) Liens securing the
Medium Term Notes.
3.7 RECEIVABLES. (a) No amount payable to such Grantor in excess of the
Canadian Dollar Equivalent of $250,000 under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Collateral Agent.
(b) None of the obligors on any Receivables having a value in excess of
the Canadian Dollar Equivalent of $250,000 is a Governmental Authority with
respect to which all requirements of applicable law have not been fulfilled as
to perfect and make fully effective the Lien thereon created hereby.
(c) The amounts represented by such Grantor to the Lenders from time to
time as owing to such Grantor in respect of the Receivables will at such times
be accurate.
3.8 CONTRACTS. (a) No consent of any party (other than such
Grantor) to any Contract is required, or purports to be required, in
connection with the execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the parties thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
9
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.
(d) Neither such Grantor nor (to the best of such Grantor's knowledge)
any of the other parties to the Contracts is in default in the performance or
observance of any of the terms thereof in any manner that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(e) To the knowledge of such Grantor, the right, title and interest of
such Grantor in, to and under the Contracts are not subject to any defenses,
offsets, counterclaims or claims.
(f) Such Grantor has delivered to the Collateral Agent a complete and
correct copy of each Contract, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to such Grantor under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Collateral Agent.
(h) Except as set forth on Schedule 3.8, none of the parties to any
Contract is a Governmental Authority.
3.9 INTELLECTUAL PROPERTY. (a) SCHEDULE 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof, other than
(i) rights licensed to such Grantor pursuant to licenses for (A) computer
software, or (B) patents, copyrights, trademarks, service marks, technology,
know-how and/or processes which are embedded in equipment or fixtures, and (ii)
copyrights, trademarks, service marks, trade dress, technology, know-how,
inventions and/or processes for which no steps have been taken to obtain
registrations or patents.
(b) On the date hereof, all material Intellectual Property (i) is
valid, subsisting, unexpired and enforceable and, has not been abandoned and
(ii) does not infringe the intellectual property rights of any other Person,
except to the extent that any of the foregoing could not reasonably be expected
to have a material adverse effect on the value of any material Intellectual
Property.
(c) On the date hereof, none of the material Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which such
Grantor is the licensor or franchisor, except (i) as set forth in Schedule 6, or
(ii) agreements with Affiliates of such Grantor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof which both (i) seeks to limit, cancel or
question the validity of any
10
Intellectual Property or such Grantor's ownership interest therein, and (ii)
which, if adversely determined, would have a material adverse effect on the
value of any material Intellectual Property.
(f) For the purposes of Section 3.9(b)-3.9(e), the term Intellectual
Property shall not include (i) rights licensed to such Grantor pursuant to
licenses for (A) computer software, or (B) patents, copyrights, trademarks,
service marks, technology, know-how and/or processes which are embedded in
equipment or fixtures, (ii) copyrights, trademarks, service marks, trade dress,
technology, know-how, inventions and/or processes for which no steps have been
taken to obtain registration or patents, (iii) except with respect to Section
3.9(b)(ii), any pending applications for any Copyrights, Trademarks or Patents
or (iv) any of the following that are not registered: corporate names, company
names, business names or fictitious business names.
SECTION 4. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent,
the Administrative Agents and the Lenders that, from and after the date of this
Agreement until the Secured Obligations shall have been paid in full, no Letter
of Credit shall be outstanding and the Commitments shall have terminated:
4.1 DELIVERY OF INSTRUMENTS, SECURITIES AND CHATTEL PAPER. If any
amount payable under or in connection with any of the Collateral in which such
Grantor has an interest shall be or become evidenced by any Instrument, Security
or Chattel Paper having a value in excess of the Canadian Dollar Equivalent of
$250,000, such Instrument, Security or Chattel Paper shall be immediately
delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the
Collateral Agent, to be held as Collateral pursuant to this Agreement.
4.2 MAINTENANCE OF INSURANCE. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment and Vehicles against loss by fire, explosion, theft,
water, wind and other casualties as are customarily insured against by operators
of the same or similar businesses in the same or similar localities and (ii)
insuring such Grantor, the Collateral Agent, the Administrative Agents and the
Lenders against liability for personal injury and property damage relating to
such Inventory and Equipment and Vehicles, such policies to be in such form and
amounts and having such coverage as are customarily insured against by operators
of the same or similar business in the same or similar localities.
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof, (ii) name the Collateral Agent as insured party or loss payee, as its
interest may appear, (iii) if reasonably requested by the Collateral Agent,
include mortgagee's interest coverage and (iv) be reasonably satisfactory in all
other respects to the Collateral Agent.
(c) The Canadian Borrower shall deliver to the Collateral Agent, the
Administrative Agents and the Lenders an updated insurance certificate with
respect to such insurance substantially concurrently with each delivery of the
audited annual financial statements and such
11
additional information with respect thereto as the Collateral Agent may from
time to time reasonably request.
4.3 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
4.4 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest to the extent required by and having at least
the priority described in Section 3.2 (other than by reason of the action or
inaction of the Collateral Agent or any Lender) and shall defend such security
interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent, the
Administrative Agents and the Lenders from time to time statements and schedules
further identifying and describing the Collateral of such Grantor as the
Collateral Agent may reasonably request.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) the filing of any financing or financing
change statements under the PPSA (or other similar laws) in effect in any
jurisdiction, and any filings, if any, required to be made in the United States
Patent and Trademark Office, the United States Copyright Office and in any
similar offices in Canada with respect to the security interests created hereby
and (ii) in the case of Securities, Deposit Accounts, Letter-of-Credit Rights
and any other relevant Collateral, taking any actions necessary to enable the
Collateral Agent to obtain possession and control with respect thereto;
PROVIDED, HOWEVER, that, so long as the Collateral Agent shall not have
otherwise requested at a time when an Event of Default shall have occurred and
be continuing, such Guarantor shall not be required to take any such action
under this clause (ii) with respect to (x) Deposit Accounts other than the
Borrower's concentration accounts, (y) with respect to Securities constituting
commodity contracts or (z) any other Collateral referred to in this clause (ii)
until the value of such Collateral exceeds the Canadian Dollar Equivalent of
$250,000 with respect to any individual item of Collateral or the Canadian
Dollar Equivalent of $1,000,000 in the aggregate for all such items of
Collateral.
4.5 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not, except upon
15 days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (a) all additional executed financing statements and other
documents reasonably requested by the
12
Collateral Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to SCHEDULE 5 showing any additional location at which Inventory
or Equipment shall be kept:
(i) change its jurisdiction of organization or the location of
its chief executive office or sole place of business or principal
residence from that referred to in Section 3.3; or
(ii) change its name to such an extent that any financing
statement filed by the Collateral Agent in connection with this
Agreement would become misleading.
4.6 NOTICES. Such Grantor will advise the Collateral Agent, the
Administrative Agents and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Collateral Agent to exercise any of its
remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
4.7 SECURITIES. (a) If such Grantor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Secured Parties,
hold the same in trust for the Secured Parties and deliver the same forthwith to
the Collateral Agent in the exact form received, duly indorsed by such Grantor
to the Collateral Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Collateral Agent so requests, signature guaranteed, to be held by the
Collateral Agent, subject to the terms hereof, as additional collateral security
for the Secured Obligations. Any sums paid upon or in respect of the Securities
upon the liquidation or dissolution of any Issuer shall be paid over to the
Collateral Agent to be held by it hereunder as additional collateral security
for the Secured Obligations, and in case any distribution of capital shall be
made on or in respect of the Securities or any property shall be distributed
upon or with respect to the Securities pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Collateral Agent, be delivered to
the Collateral Agent to be held by it hereunder as additional collateral
security for the Secured Obligations. If any sums of money or property so paid
or distributed in respect of the Securities shall be received by such Grantor,
such Grantor shall, until such money or property is paid or delivered to the
Collateral Agent, hold such money or property in trust for the Secured Parties,
segregated from other funds of such Grantor, as additional collateral security
for the Secured Obligations.
13
(b) Without the prior written consent of the Collateral Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any Capital Stock of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, unless, in the case of an issuance of Capital
Stock, such Grantor (x) provides the Collateral Agent with five days' prior
notice of such issuance and (y) promptly after such issuance, complies with
Section 4.7(a), (ii) sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option with respect to, the Securities or Proceeds thereof (except
pursuant to a transaction not prohibited by the Credit Agreement), (iii) create,
incur or permit to exist any Lien or option in favor of, or any claim of any
Person with respect to, any of the Securities or Proceeds thereof, or any
interest therein, except for the security interests created by this Agreement
and except as permitted by the Credit Agreement or (iv) enter into any agreement
or undertaking restricting the right or ability of such Grantor or the
Collateral Agent to sell, assign or transfer any of the Securities or Proceeds
thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 4.7(a) with
respect to the Securities issued by it and (iii) the terms of Sections 5.3(c)
and 5.7 shall apply to it, MUTATIS MUTANDIS, with respect to all actions that
may be required of it pursuant to Section 5.3(c) or 5.7 with respect to the
Securities issued by it.
4.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.
4.9 CONTRACTS. (a) Such Grantor will perform and comply in
all material respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each and every
material right which it may have under each Contract (other than any right of
termination).
(d) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it relating in any way to any
Contract that questions the validity or enforceability of such Contract.
14
4.10 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain as
in the past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable Requirements of Law, (iv) in
the United States and Canada, not adopt or use any xxxx which is confusingly
similar or a colorable imitation of such Trademark unless the Collateral Agent,
for the ratable benefit of the Secured Parties, shall obtain a perfected
security interest in such xxxx (or in the applicable license to use such xxxx if
such xxxx is licensed to such Grantor) pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or impaired in
any way; provided, however, any decision made by a Grantor in its reasonable
business judgment to discontinue a product line or product, or modify or update
the branding of a product line or product, such that such Grantor ceases to use
(or limit its use of) a Trademark shall not be claimed a violation of this
Section 4.10(a).
(b) To the extent determined by it in its reasonable business judgment
to be advisable, such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) To the extent determined by it in its reasonable business judgment
to be advisable, such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that uses any material Intellectual Property to infringe the intellectual
property rights of any other Person that would reasonably be likely to have a
Material Adverse Effect.
(e) Such Grantor will notify the Collateral Agent, the Administrative
Agents and the Lenders promptly if it knows, or has reason to know, that any
application or registration relating to any material Copyright, Patent or
Trademark may become forfeited, abandoned or dedicated to the public, or of any
material adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in the United States or Canada) regarding such
Grantor's ownership of, or the validity of, any material Copyright, Patent or
Trademark or such Grantor's right to register the same or to own and maintain
the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Copyright, Patent or Trademark with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in Canada, such Grantor shall report such filing to the Collateral Agent
together with the delivery of the financial statements in accordance with
Section 6.1(a) of the
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Credit Agreement. Upon request of the Collateral Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Collateral Agent may reasonably request to
evidence the security interest granted under this Agreement in any Copyright,
Patent or Trademark (other than the Foreign Intellectual Property) and the
goodwill of such Grantor relating thereto or represented thereby.
(g) To the extent determined by it in its reasonable business judgment
to be advisable, such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in Canada to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material
Copyrights, Patents and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
Such Grantor shall not abandon or fail to pay any maintenance fee or annuity due
and payable on any material Copyright, Patent or Trademark, or fail to file any
required affidavit or renewal in support thereof, without first providing the
Collateral Agent: (i) sufficient written notice, of at least 90 days, to allow
the Collateral Agent to pay timely any such maintenance fees or annuities which
may become due on any of such Copyrights, Patents or Trademarks, or to file any
affidavit or renewal with respect thereto, and (ii) a separate written power of
attorney or other authorization to pay such maintenance fees or annuities, or to
file such affidavit or renewal, should such be necessary or desirable.
(h) In the event that any material Copyright, Patent or Trademark is or
is about to be infringed, misappropriated or diluted by a third party, such
Grantor shall promptly notify the Collateral Agent after it learns thereof and
shall take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Copyright, Patent or Trademark, such as suing
for infringement, misappropriation or dilution, seeking injunctive relief where
appropriate and recovering any and all damages for such infringement,
misappropriation or dilution.
SECTION 5. REMEDIAL PROVISIONS
5.1 CERTAIN MATTERS RELATING TO RECEIVABLES. (a) At any time and from
time to time (but, so long as no Event of Default shall have occurred and be
continuing, no more often than once during any calendar year), upon the
Collateral Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations and aging of, and trial balances for, the Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor's Receivables, subject to the Collateral Agent's direction and control,
and the Collateral Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
required by the Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Collateral Agent if required, in a Collateral Account
maintained under the sole dominion and
16
control of the Collateral Agent, subject to withdrawal by the Collateral
Agent for the account of the Administrative Agent and the Lenders only as
provided in Section 5.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Collateral Agent, the Administrative Agents and the
Lenders, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.
(c) At the Collateral Agent's request after the occurrence and during
the continuance of an Event of Default, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
5.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE. (a) The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default communicate
with obligors under the Receivables and parties to the Contracts to verify with
them to the Collateral Agent's satisfaction the existence, amount and terms of
any Receivables or Contracts.
(b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Collateral Agent for the
ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables and Contracts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. None of the Collateral Agent, either Administrative Agent or any Lender
shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) or Contract by reason of or arising out of this Agreement
or the receipt by the Collateral Agent, either Administrative Agent or any
Lender of any payment relating thereto, nor shall the Collateral Agent, either
Administrative Agent or any Lender be obligated in any manner to perform any of
the obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto) or Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
5.3 PLEDGED STOCK; PLEDGED NOTES. (a) Unless an Event of Default shall
have occurred and be continuing and the Collateral Agent shall have given notice
to the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 5.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate or other organizational rights with respect to the Securities
provided, however, that no vote shall be cast
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or corporate or other organizational right exercised or other action taken
which, in the Collateral Agent's reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of
any provision of the Credit Agreement, this Agreement or any other Loan
Document.
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give notice of its intent to exercise such rights to the
relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Securities and make application thereof to the Secured Obligations in
such order as the Collateral Agent may determine, and (ii) subject to obtaining
requisite consents which shall be promptly obtained by the relevant Grantor or
Grantors any or all of the Securities shall be registered in the name of the
Collateral Agent or its nominee, and the Collateral Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Securities at any meeting of shareholders of the relevant Issuer or Issuers
or otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Securities as if
it were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate or other organizational structure of any Issuer, or upon the
exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Securities, and in connection therewith, the right to
deposit and deliver any and all of the Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Collateral Agent may determine), all without liability
except to account for property actually received by it, but the Collateral Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Securities pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Collateral Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Securities directly to the Collateral Agent.
5.4 PROCEEDS TO BE TURNED OVER TO COLLATERAL AGENT. In addition to the
rights of the Collateral Agent, the Administrative Agents and the Lenders
specified in Section 5.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required). All Proceeds received by
the Collateral Agent hereunder shall be held by the Collateral Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Collateral Agent in a Collateral Account (or by such Grantor
in trust for the Secured Parties) shall continue to be held as collateral
security for all the Secured Obligations and shall not constitute payment
thereof until applied as provided in Section 5.5.
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5.5 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon by
the Canadian Borrower and the Collateral Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Collateral Agent's election,
the Collateral Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, in payment of the
Secured Obligations in the following order:
FIRST, to pay incurred and unpaid fees and expenses of the
Collateral Agent under the Loan Documents;
SECOND, to the Collateral Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect
of the Secured Obligations, PRO RATA among the Lenders according to the
amounts of the Secured Obligations then due and owing and remaining
unpaid to the Lenders;
THIRD, to the Collateral Agent, for application by it towards
prepayment of the Secured Obligations, PRO RATA among the Lenders
according to the amounts of the Secured Obligations then held by the
Lenders, but in the absence of an Event of Default, only to the extent
the Borrowers are required to make such prepayment pursuant to the
Credit Agreement or as the Borrowers may otherwise agree; and
FOURTH, any balance of such Proceeds remaining after the
Secured Obligations shall have been paid in full in cash or other
immediately available funds, no Letters of Credit shall be outstanding
and the Commitments shall have been terminated shall be paid over to
the Canadian Borrower or to whomsoever may be lawfully entitled to
receive the same.
5.6 PPSA AND OTHER REMEDIES. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Administrative Agents and the
Lenders, may (personally or by agent) exercise, in addition to all other rights
and remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the PPSA as in effect in Ontario or
any other applicable law. Without limiting the generality of the foregoing, the
Collateral Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Collateral Agent, either Administrative Agent or any
Lender or elsewhere upon such terms and conditions as it may deem advisable and
at such prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Collateral Agent or any Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold. Each Grantor further agrees, at the Collateral
Agent's request, to assemble
19
the Collateral and make it available to the Collateral Agent at places which
the Collateral Agent shall reasonably select, whether at such Grantor's
premises or elsewhere.
Additionally, the Collateral Agent upon the occurrence and continuance
of an Event of Default, shall, without limiting any of the foregoing remedies,
on behalf of the Administrative Agents and the Lenders, at such times as the
Collateral Agent in its discretion may determine (personally or by agent) do any
one or more of the following:
(a) TAKE POSSESSION. Enter on any premises where any Collateral is
located and take possession of, disable or remove such Collateral.
(b) CARRY ON BUSINESS. Carry on, or concur in the carrying on of, any
or all of the business or undertaking of any of the Grantors and enter on,
occupy and use (without charge by any of the Grantors) any of the premises,
buildings, plant and undertaking of, or occupied or used by, any Grantor.
(c) COURT-APPROVED DISPOSITION OF COLLATERAL. Apply to a court of
competent jurisdiction for the sale or foreclosure of any or all of the
Collateral.
(d) BORROW AND GRANT SECURITY INTERESTS. Borrow money for the
maintenance, preservation or protection of any Collateral or for carrying on any
of the business or undertaking of any Grantor and grant Liens on any Collateral
(in priority to the Liens created by this Agreement or otherwise) as security
for the money so borrowed. Each Grantor will immediately on demand reimburse the
Collateral Agent for all such borrowings.
(e) APPOINT RECEIVER. Appoint by instrument in writing one or more
Receivers of any of the Grantors or any or all of the Collateral with such
rights, powers and authority (including any or all of the rights, powers and
authority of the Collateral Agent under this Agreement) as may be provided for
in the instrument of appointment or any supplemental instrument, and remove and
replace any such Receiver from time to time. To the extent permitted by
applicable law, any Receiver appointed by the Collateral Agent will (for
purposes relating to responsibility for the Receiver's acts or omissions) be
considered to be the agent of each of the relevant Grantors and not of the
Collateral Agent, the Administrative Agents or the Lenders.
(f) COURT-APPOINTED RECEIVER. Apply to a court of competent
jurisdiction for the appointment of a Receiver of the Grantor or of any or
all of the Collateral.
Without prejudice to the ability of the Collateral Agent to
dispose of the Collateral in any manner which is commercially reasonable, the
Grantors acknowledge that a disposition of Collateral by the Collateral Agent
which takes place substantially in accordance with the following provisions
will be deemed to be commercially reasonable:
(i) Collateral may be disposed of in whole or in part;
(ii) Collateral may be disposed of by public auction,
public tender or private contract, with or without advertising and
without any other formality;
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(iii) any purchaser or lessee of Collateral may be a customer
of the Collateral Agent, the Administrative Agents or the Lenders;
(iv) a disposition of Collateral may be on such terms and
conditions as to credit or otherwise as the Collateral Agent, in is
sole discretion, may deem advantageous; and
(v) the Collateral Agent may establish an upset or reserve
bid or price in respect of Collateral.
The Collateral Agent shall apply the net proceeds of any action taken
by it pursuant to this Section 5.6, after deducting all reasonable costs and
expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Collateral Agent, the Administrative Agents and
the Lenders and any Receiver hereunder, including, without limitation,
reasonable solicitor's fees and disbursements, to the payment in whole or in
part of the Secured Obligations, in such order as the Collateral Agent may
elect, and only after such application and after the payment by the Collateral
Agent of any other amount required by any provision of law need the Collateral
Agent account for the surplus, if any, to any Grantor. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Collateral Agent, either Administrative Agent or any Lender
arising out of the exercise by them of any rights hereunder.
5.7 SALE OF SECURITIES. (a) Each Grantor recognizes that the Collateral
Agent, in connection with any offer or sale of any Securities forming part of
the Collateral, may be required and is hereby authorized to comply with any
limitation or restriction as it may be advised by counsel is necessary to comply
with applicable law, including compliance with procedures that may restrict the
number of prospective bidders and purchasers, requiring that prospective bidders
and purchasers have certain qualifications, and restricting prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account or investment and not with a view to the distribution or
resale of such Securities. Each Grantor further agrees that compliance with any
such limitation or restriction will not result in a sale being considered or
deemed not to have been made in a commercially reasonable manner, and the
Collateral Agent will not be liable or accountable to the Grantors for any
discount allowed by reason of the fact that such Securities are sold in
compliance with any such limitation or restriction.
(b) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 5.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 5.7 will cause irreparable injury to the Collateral Agent, the
Administrative Agents and the Lenders, that the Collateral Agent, the
Administrative Agents and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 5.7 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defenses
21
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing under the
Credit Agreement.
5.8 DEFICIENCY. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Secured Obligations and the fees and disbursements of any solicitors
employed by the Collateral Agent, either Administrative Agent or any Lender to
collect such deficiency.
5.9 GRANT OF LICENCE. For the purpose of enabling the Collateral Agent
to exercise its rights and remedies under Section 5 when the Collateral Agent is
entitled to exercise such rights and remedies, and for no other purpose, each
Grantor grants to the Collateral Agent an irrevocable, non-exclusive licence
(exercisable without payment of royalty or other compensation to the Grantors)
to use, assign or sublicence any or all of the Intellectual Property, including
in such licence reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout of the same.
SECTION 6. THE COLLATERAL AGENT
6.1 COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a) Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Collateral Agent the power and right, on behalf of such Grantor, without notice
to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Collateral Agent
for the purpose of collecting any and all such moneys due under any
Receivable or Contract or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Collateral Agent may reasonably request to
evidence the Collateral Agent's and the Lenders' security interest in
such Intellectual Property and the goodwill of such Grantor relating
thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
22
(iv) execute, in connection with any sale provided for in
Section 5.6 or 5.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Collateral Agent or as the Collateral
Agent shall direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (5) defend
any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem appropriate;
(7) assign any Copyright, Patent or Trademark (along with the goodwill
of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Collateral Agent shall in its
sole reasonable discretion determine; and (8)generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Collateral Agent
reasonably deems necessary to protect, preserve or realize upon the
Collateral and the Collateral Agent's, the Administrative Agents' and
the Lenders' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 6.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The expenses of the Collateral Agent (or any Receiver) incurred in
connection with actions undertaken as provided in this Section 6.1, together
with interest thereon at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due ABR Loans under
the Credit Agreement, from the date of payment by the Collateral Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are
23
coupled with an interest and are irrevocable until this Agreement is
terminated and the security interests created hereby are released.
6.2 DUTY OF COLLATERAL AGENT. The Collateral Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as the Collateral
Agent deals with similar property for its own account. None of the Collateral
Agent, either Administrative Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Collateral Agent, the Administrative Agents and the Lenders
hereunder are solely to protect the Collateral Agent's, the Administrative
Agents' and the Lenders' interests in the Collateral and shall not impose any
duty upon the Collateral Agent, either Administrative Agent or any Lender to
exercise any such powers. The Collateral Agent, the Administrative Agents and
the Lenders shall be accountable only for amounts that they actually receive as
a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
6.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to any applicable law,
each Grantor authorizes the Collateral Agent to file or record financing
statements, financing change statements and other filing or recording documents
or instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Collateral Agent reasonably
determines appropriate to perfect the security interests of the Collateral Agent
under this Agreement. Each Grantor authorizes the Administrative Agent, where
required, to use the collateral description "all personal property [except for
______]" in any such financing statements.
6.4 AUTHORITY OF COLLATERAL AGENT. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
SECTION 7. MISCELLANEOUS
7.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
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7.2 NOTICES. All notices, requests and demands to or upon the
Collateral Agent or any Loan Party hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1.
7.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. None of the
Collateral Agent, either Administrative Agent or any Lender shall by any act
(except by a written instrument pursuant to Section 7.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of the Collateral Agent, either
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Collateral Agent, either Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent, such Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.
7.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each Grantor agrees to
pay or reimburse the Collateral Agent, any Receiver, each Lender and each
Administrative Agent for all of its costs and expenses incurred in enforcing or
preserving any rights under this Agreement and the other Loan Documents to which
such Grantor is a party, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Collateral Agent and each
Administrative Agent.
(b) Each Grantor agrees to pay, and to save the Collateral Agent, any
Receiver, the Administrative Agents and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each CBO Guarantor agrees to pay, and to save the Collateral Agent,
any Receiver and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrowers would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 7.4 shall survive repayment of the
Secured Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
7.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Collateral Agent, the Administrative Agents and the Lenders and their successors
and assigns; PROVIDED that no
25
Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Collateral
Agent.
7.6 SET-OFF. In addition to any rights and remedies of the Secured
Parties provided by law, each Secured Party shall have the right, without prior
notice to the Grantors, any such notice being expressly waived by each Grantor
to the extent permitted by applicable law, upon any amount becoming due and
payable by such Grantor hereunder or under any other Loan Document (whether at
the stated maturity, by acceleration or otherwise), to set off and appropriate
and apply against such amount 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 Secured Party or any branch or agency thereof to or for the credit
or the account of such Grantor, as the case may be. Each Secured Party agrees
promptly to notify the Canadian Borrower and the Administrative Agents after any
such setoff and application made by such Secured Party, PROVIDED that the
failure to give such notice shall not affect the validity of such setoff and
application.
7.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
7.8 SEVERABILITY. Any provision of this 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.
7.9 SECTION HEADINGS. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
7.10 INTEGRATION. This Agreement and the other Loan Documents represent
the agreement of the Grantors, the Collateral Agent, Administrative Agents and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Collateral
Agent, either Administrative Agent or any Lender relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the other
Loan Documents.
7.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF
ONTARIO.
7.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and
26
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the Province of Ontario and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Loan Party at its
address referred to in Section 7.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
7.13 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) none of the Collateral Agent, either Administrative Agent or any
Lender has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Collateral Agent,
the Administrative Agents and Lenders, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
7.14 ADDITIONAL LOAN PARTIES. Each Subsidiary of the Canadian Borrower
that is required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall to the extent such Subsidiary is a Canadian
Subsidiary Guarantor, become a CBO Guarantor for all purposes under the U.S.
Guarantee and Collateral Agreement and a Grantor for all purposes under this
Agreement, in either case upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto and the execution and
delivery of an Assumption Agreement to the U.S. Guarantee and Collateral
Agreement in the form required thereunder.
7.15 RELEASES. (a) At such time as the Loans, the Reimbursement
Obligations and the other Secured Obligations (other than Secured Obligations in
respect of Specified Hedge Agreements) shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created hereby, and
27
this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Collateral Agent and each Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the
Grantors. At the request and sole expense of any Grantor following any such
termination, the Collateral Agent shall deliver to such Grantor any
Collateral held by the Collateral Agent hereunder, and execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Collateral Agent, at the request and sole expense of such Loan Party,
shall execute and deliver to such Loan Party all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Canadian Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; PROVIDED that the Canadian Borrower shall have delivered to the
Collateral Agent, at least five Business Days prior to the date of the proposed
release, a written request for release identifying the relevant Subsidiary
Guarantor and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Canadian Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents.
7.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
7.17 GRANTORS' OBLIGATIONS. Notwithstanding anything herein to the
contrary, (i) each Grantor's obligations hereunder with respect to Collateral is
limited to Collateral in which such Grantor has an interest; and (ii) any
reports or other deliveries required by a Grantor hereunder shall be effective
if made by one of the Borrowers or by any other Grantor hereunder.
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above
written.
ROBINHOOD MULTIFOODS INC.
By:
--------------------------------
Name:
[Guarantors]
EXHIBIT A-3
FORM OF SECURITIES PLEDGE AGREEMENT
TO: NAME OF AGENT: CANADIAN IMPERIAL BANK OF COMMERCE,
as Collateral Agent for the Secured Parties
under the Credit Agreement (as each
such term is defined below)
ADDRESS: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: Xxxx Xxxx Xxxx
FACSIMILE: (000) 000-0000
RECITALS:
WHEREAS, pursuant to the Credit Agreement, dated as of
September 28, 2001 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among
INTERNATIONAL MULTIFOODS CORPORATION, a
Delaware corporation (the "U.S. BORROWER"), XXXXX XXXX MULTIFOODS INC., an
Ontario corporation and a Subsidiary of the U.S. Borrower (the "CANADIAN
BORROWER" and, together with the U.S. Borrower, the "BORROWERS"), the banks and
other financial institutions from time to time parties thereto (the "LENDERS"),
Rabobank International, as Documentation Agent, U.S. Bank National Association
and UBS Warburg, as Syndication Agents, and Canadian Imperial Bank of Commerce,
as administrative agent for the U.S. Lenders (in such capacity, the "U.S.
ADMINISTRATIVE AGENT") and as administrative agent for the Canadian Lenders (in
such capacity, the "CANADIAN ADMINISTRATIVE AGENT"), the Lenders have severally
agreed to make extensions of credit to the Borrowers upon the terms and subject
to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the U.S. Borrower shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Secured
Parties;
For valuable consideration, the receipt and adequacy of which
are acknowledged by the U.S. Borrower, the U.S. Borrower agrees with and in
favour of the Collateral Agent, for its own benefit and for the benefit of the
other Secured Parties, as follows:
1. DEFINITIONS. In this Agreement, capitalized terms which are not
otherwise defined have the meanings given to such terms in the Credit
Agreement. In addition:
"BOOKS AND RECORDS" means all books, records, files, papers,
disks, documents and other repositories of data recording in any form or medium,
evidencing or relating to the Collateral which are at any time owned by the U.S.
Borrower or to which the U.S. Borrower (or any Person on the U.S. Borrower's
behalf) has access.
-2-
"BUSINESS DAY" means any day other than a Saturday, Sunday or
statutory holiday in the Province of Ontario.
"CANADIAN BORROWER OBLIGATIONS" means the collective reference
to the unpaid principal of and interest on the Canadian Loans and Canadian
Reimbursement Obligations and all other obligations and liabilities of the
Canadian Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Canadian Loans and Canadian Reimbursement Obligations and interest accruing at
the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Canadian Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent, either Administrative Agent or any Lender
(or, in the case of any Canadian Borrower Specified Hedge Agreement, any Lender
Affiliate or any other counterparty thereto), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, this Agreement, the other Loan Documents, any Canadian Letter of
Credit, any Canadian Borrower Specified Hedge Agreement or any other document
made, delivered or given in connection with any of the foregoing, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Collateral Agent, either Administrative
Agent or to the Lenders that are required to be paid by the Canadian Borrower
pursuant to the terms of any of the foregoing agreements).
"COLLATERAL" means the collateral described in Section 2 of
this Agreement, including the Pledged Securities and all Proceeds thereof.
"DEFAULT" means an Event of Default under the Credit
Agreement.
"ISSUER" means any Person listed under the heading "Issuer(s)"
in Schedule "A", and includes any successor of any Issuer.
"PERSON" will be broadly interpreted and includes an
individual, a corporation, a limited liability company, a partnership, a trust,
a joint venture, an association, an unincorporated organization, the government
of a country or any political subdivision thereof, any agency or department of
any such government, a regulatory agency or any other juridical entity and the
heirs, executors, administrators or other legal representatives of an
individual.
"PPSA" means the PERSONAL PROPERTY SECURITY ACT of the
Province of Ontario, as such legislation may be amended, renamed or replaced
from time to time (and includes all regulations from time to time made under
such legislation).
"PLEDGED SECURITIES" means the securities listed in Schedule
A, which, in any event, shall at all times consist of 66% of all of the issued
and outstanding shares in the capital of the Canadian Borrower that are entitled
to vote in an election of the board of directors of the Canadian Borrower.
"PROCEEDS" has the meaning given to that term in the PPSA.
-3-
"SECURED PARTIES" means the collective reference to (i) the
Lenders and their respective successors, indorsees, transferees and assigns,
(ii) the Administrative Agents and their respective successors and assigns in
such capacities, (iii) any Lender Affiliate or any other counterparty party to
any Specified Hedge Agreement, and (iv) the Collateral Agent and its successors
and assigns in such capacity.
"SECURED OBLIGATIONS" means the obligations secured by the
Security Interests granted pursuant to this Agreement, which obligations include
the U.S. Borrower Obligations, the Canadian Borrower Obligations and the
obligations of the U.S. Borrower under Section 2 of the U.S. Guarantee and
Collateral Agreement.
"SECURITY INTEREST" means any mortgage, charge, pledge,
hypothecation, lien (statutory or otherwise), assignment, finance lease, title
retention agreement or arrangement, security interest or other encumbrance or
adverse claim of any nature, or any other security agreement or arrangement
creating in favour of any creditor a right in respect of a particular property.
"U.S. BORROWER OBLIGATIONS" means the collective reference to
the unpaid principal of and interest on the U.S. Loans and U.S. Reimbursement
Obligations and all other obligations and liabilities of the U.S. Borrower
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the U.S. Loans and U.S.
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the U.S. Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Collateral Agent,
either Administrative Agent or any Lender (or, in the case of any U.S. Borrower
Specified Hedge Agreement, any Lender Affiliate or any other counterparty
thereto), whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, the other Loan Documents,
any U.S. Letter of Credit, any U.S. Borrower Specified Hedge Agreement or any
other document made, delivered or given in connection with any of the foregoing,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Collateral Agent,
either Administrative Agent or to the Lenders that are required to be paid by
the U.S. Borrower pursuant to the terms of any of the foregoing agreements).
2. GRANT OF SECURITY INTEREST. As general and continuing collateral security for
the due payment and performance of the Secured Obligations, the U.S. Borrower
hereby assigns and pledges to and in favour of the Collateral Agent (for the
ratable benefit of the Secured Parties), and grants to the Collateral Agent (for
the ratable benefit of the Secured Parties) a continuing security interest in:
(a) the Pledged Securities, together with any replacements thereof and
substitutions therefor, and all certificates and instruments evidencing or
representing such securities;
(b) all interest and dividends, whether in cash, kind or stock,
received or receivable upon or in respect of any of the Pledged Securities and
all moneys or other property payable or paid on
-4-
account of any return or repayment of capital in respect of any of the
Pledged Securities or otherwise distributed in respect thereof or which will
in any way be charged to, or payable or paid out of, the capital of any
Issuer on account of the Pledged Securities;
(c) all other property that may at any time be received or
receivable by or otherwise distributed to the U.S. Borrower in respect of, or
in substitution for, or in exchange for, any of the foregoing; and
(d) all cash, securities and other proceeds of the foregoing and all
rights and interests of the U.S. Borrower in respect thereof or evidenced
thereby, including all moneys received from time to time by the U.S. Borrower in
connection with the sale or other disposition of any of the Pledged Securities;
provided, however, that the U.S. Borrower will not sell or otherwise dispose of
any of the Pledged Securities or purport to do any of the foregoing without the
prior written consent of the Collateral Agent.
3. DELIVERY OF PLEDGED SECURITIES. The certificates representing the Pledged
Securities duly endorsed by the appropriate Person in blank for transfer or
accompanied by stock powers of attorney satisfactory to the Collateral Agent
will forthwith be delivered to and remain in the custody of the Collateral Agent
or its nominee, for the benefit of the Secured Parties. If the constating
documents of any Issuer restrict the transfer of the securities of such Issuer,
then the U.S. Borrower will also deliver to the Collateral Agent a certified
copy of a resolution of the directors or shareholders of such Issuer consenting
to the transfer(s) contemplated by this Agreement, including any prospective
transfer of the Collateral by the Collateral Agent upon a realization on the
security constituted hereby in accordance with this Agreement. All Pledged
Securities may, at the option of the Collateral Agent, be registered in the name
of the Collateral Agent or its nominee. If the Collateral Agent so requests, any
endorsement on any certificate representing any of the Pledged Securities will
also be guaranteed by a Canadian chartered bank.
4. ATTACHMENT; NO OBLIGATION TO ADVANCE. The U.S. Borrower confirms that value
has been given by the Secured Parties to the U.S. Borrower, that the U.S.
Borrower has rights in the Collateral (other than after-acquired property) and
that the U.S. Borrower and the Collateral Agent have not agreed to postpone the
time for attachment of the Security Interests created by this Agreement to any
of the Collateral. The Security Interests created by this Agreement will have
effect and be deemed to be effective whether or not the Secured Obligations or
any part thereof are owing or in existence before or after or upon the date of
this Agreement. Neither the execution of this Agreement nor any advance of funds
shall oblige the Collateral Agent or any of the Lenders to advance any funds or
any additional funds.
5. REPRESENTATIONS AND WARRANTIES. The U.S. Borrower represents and
warrants to the Collateral Agent, each Administrative agent and each Lender,
that:
(a) TITLE; NO OTHER SECURITY INTERESTS. Except for the security
interest granted to the Collateral Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, the U.S. Borrower owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Collateral
-5-
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement or as are permitted by the Credit Agreement.
(b) AUTHORITY; CONSENTS. The U.S. Borrower has full power and authority
to grant to the Agent, for its own benefit and for the benefit of the Secured
Parties, the Security Interests created by this Agreement and to execute,
deliver and perform its obligations under this Agreement, and such execution,
delivery and performance does not contravene any of the U.S. Borrower's charter
documents or by-laws or any agreement, instrument or restriction to which the
U.S. Borrower is a party or by which the U.S. Borrower or any of the Collateral
is bound. Except for any consent that has been obtained and is in full force and
effect, no consent of any Person (other than the U.S. Borrower) is required, or
purports to be required, for the execution, delivery and performance of this
Agreement.
(c) EXECUTION AND DELIVERY; ENFORCEABILITY. This Agreement has been
duly authorized, executed and delivered by the U.S. Borrower and is a valid and
binding obligation of the U.S. Borrower enforceable against the U.S. Borrower in
accordance with its terms, subject only to bankruptcy, insolvency, liquidation,
reorganization, moratorium and other similar laws generally affecting the
enforcement of creditors' rights, and to the fact that equitable remedies (such
as specific performance and injunction) are discretionary remedies.
(d) AUTHORIZED AND ISSUED CAPITAL; VALID ISSUE. The authorized capital
of the Issuer(s) consists of -. The issued capital of the Issuer consists of -.
The Pledged Securities are validly issued, fully paid and non-assessable.
(e) NO REQUIRED DISPOSITION. There is no existing agreement,
option, right or privilege capable of becoming an agreement or option
pursuant to which the U.S. Borrower would be required to sell or otherwise
dispose of any of the Pledged Securities.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements, representations,
warranties and covenants made by the U.S. Borrower in this Agreement are
material, will be considered to have been relied on by the Collateral Agent, the
Administrative Agents and the Lenders and will survive the execution and
delivery of this Agreement or any investigation made at any time by or on behalf
of the Collateral Agent or any Administrative Agent or any Lender and any
disposition or payment of the Secured Obligations until repayment and
performance in full of the Secured Obligations and termination of all rights of
the U.S. Borrower that, if exercised, would result in the existence of Secured
Obligations.
7. COVENANTS. The U.S. Borrower covenants and agrees with the Collateral Agent,
the Administrative Agents and Lenders that from and after the date of this
Agreement until the Secured Obligations shall have been paid in full, no Letter
of Credit shall be outstanding and the Commitments shall have terminated:
(a) FURTHER DOCUMENTATION. The U.S. Borrower will from time to time, at
the expense of the U.S. Borrower, promptly and duly authorize, execute and
deliver such further instruments and documents, and take such further action, as
the Collateral Agent may request for the purpose of obtaining or preserving the
full benefits of, and the rights and powers granted by, this Agreement
(including the filing of any financing statements or financing change statements
under any applicable legislation with respect to the Security Interests created
by this Agreement).
-6-
The U.S. Borrower acknowledges that this Agreement has been prepared based on
the existing laws in the Province of Ontario and that a change in such laws,
or the laws of other jurisdictions, may require the execution and delivery of
different forms of security documentation. Accordingly, the U.S. Borrower
agrees that the Collateral Agent will have the right to require that this
Agreement be amended, supplemented or replaced, and that the U.S. Borrower
will immediately on request by the Collateral Agent authorize, execute and
deliver any such amendment, supplement or replacement (i) to reflect any
changes in such laws, whether arising as a result of statutory amendments,
court decisions or otherwise, (ii) to facilitate the creation and
registration of appropriate security in all appropriate jurisdictions, or
(iii) if the U.S. Borrower merges or amalgamates with any other Person or
enters into any corporate reorganization, in each case in order to confer on
the Collateral Agent (for the benefit of the Secured Parties) Security
Interests similar to, and having the same effect as, the Security Interests
created by this Agreement.
(b) PAYMENT OF EXPENSES; INDEMNIFICATION. The U.S. Borrower will pay on
demand, and will indemnify and save the Collateral Agent harmless from, any and
all liabilities, costs and expenses (including legal fees and expenses on a
solicitor and own client basis and any sales, goods and services or other
similar taxes payable to any governmental authority with respect to any such
liabilities, costs and expenses) (i) incurred by the Collateral Agent in the
preparation, registration, administration or enforcement of this Agreement, or
(ii) incurred by the Collateral Agent in performing or observing any of the
other covenants of the U.S. Borrower under this Agreement.
(c) LIMITATIONS ON OTHER SECURITY INTERESTS. The U.S. Borrower will not
create, incur or permit to exist, and will defend the Collateral against, and
will take such other action as is necessary to remove, any and all Security
Interests on and claims in respect of the Collateral other than the Security
Interests created by this Agreement or as permitted by the Credit Agreement, and
the U.S. Borrower will defend the right, title and interest of the Secured
Parties in and to the Collateral against the claims and demands of all Persons.
(d) LIMITATIONS ON DISPOSITIONS OF COLLATERAL. The U.S. Borrower will
not, without the Collateral Agent's prior written consent, sell or otherwise
dispose of any of the Collateral.
(e) NOTICES. The U.S. Borrower will advise the Collateral Agent
promptly, in reasonable detail, of (i) any Security Interest (other than the
Security Interests created by this Agreement and any Security Interest permitted
under the Credit Agreement) on, or claim asserted against, any of the
Collateral, (ii) the occurrence of any event, claim or occurrence that could
reasonably be expected to have a material adverse effect on the value of the
Collateral or on the Security Interests created by this Agreement, (iii) any
change in the location of the chief executive office of the U.S. Borrower, (iv)
any change in the name of the U.S. Borrower, and (v) any merger or amalgamation
of the U.S. Borrower with any other Person. The U.S. Borrower agrees not to
effect or permit any of the changes referred to in clauses (iii) to (v) above
unless all filings have been made and all other actions taken that are required
in order for the Collateral Agent to continue at all times following such change
to have a valid and perfected Security Interest in respect of all of the
Collateral.
(f) FURTHER ISSUANCE OF SHARES IN THE CANADIAN BORROWER. The U.S.
Borrower acknowledges that it is the intention of the parties hereto that in
addition to any Pledged
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Securities which may be listed from time to time on Schedule A, the
Collateral Agent will at all times have pledged in its favour hereunder 66%
of the issued and outstanding shares in the capital of the Canadian Borrower
that are entitled to vote in an election of the board of directors of the
Canadian Borrower. Accordingly, the U.S. Borrower covenants and agrees that
in the event any additional shares in the capital of the Canadian Borrower
are issued with the result that the Pledged Securities at any time fail to
represent 66% of the issued and outstanding shares in the capital of the
Canadian Borrower, then, in such circumstances, the U.S. Borrower shall
pledge such additional shares in the capital of the Canadian Borrower to and
in favour of the Collateral Agent so as to ensure that at all times the
Collateral Agent has pledged in its favour 66% of the issued and outstanding
shares in the capital of the Canadian Borrower.
8. PLEDGED SECURITIES. If the U.S. Borrower shall become entitled to receive
or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights in respect of the
Pledged Securities of any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any shares of the Pledged Securities,
or otherwise in respect thereof, the U.S. Borrower shall accept the same as
the agent of the Secured Parties, hold the same in trust for the Secured
Parties and deliver the same forthwith to the Collateral Agent in the exact
form received, duly indorsed by the U.S. Borrower to the Collateral Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by the U.S. Borrower and with, if the Collateral Agent so
requests, signature guaranteed, to be held by the Collateral Agent, subject
to the terms hereof, as additional collateral security for the Secured
Obligations. Any sums paid upon or in respect of the Pledged Securities upon
the liquidation or dissolution of any Issuer shall be paid over to the
Collateral Agent to be held by it hereunder as additional collateral security
for the Secured Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant
to the reorganization thereof, the property so distributed shall, unless
otherwise subject to a perfected security interest in favor of the Collateral
Agent, be delivered to the Collateral Agent to be held by it hereunder as
additional collateral security for the Secured Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Securities
shall be received by the U.S. Borrower, the U.S. Borrower shall, until such
money or property is paid or delivered to the Collateral Agent, hold such
money or property in trust for the Secured Parties, segregated from other
funds of the U.S. Borrower, as additional collateral security for the Secured
Obligations.
9. PLEDGED SECURITIES. (a) Unless an Event of Default shall have occurred and
be continuing and the Collateral Agent shall have given notice to the U.S.
Borrower of the Collateral Agent's intent to exercise its corresponding
rights pursuant to Section 9(b), the U.S. Borrower shall be permitted to
receive all cash dividends paid in respect of the Pledged Securities paid in
the normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise
all voting and corporate or other organizational rights with respect to the
Pledged Securities provided, however, that no vote shall be cast or corporate
or other organizational right exercised or other action taken which, in the
Collateral Agent's reasonable judgment, would impair the Collateral or which
would be inconsistent with or result in any violation of any provision of the
Credit Agreement, this Agreement or any other Loan Document.
-8-
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give notice of its intent to exercise such rights to
the U.S. Borrower, (i) the Collateral Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Securities and make application thereof to the Secured Obligations in
such order as the Collateral Agent may determine, and (ii) subject to
obtaining requisite consents which shall promptly be obtained by the U.S.
Borrower,any or all of the Pledged Securities shall be registered in the name
of the Collateral Agent or its nominee, and the Collateral Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change
in the corporate or other organizational structure of any Issuer, or upon the
exercise by the U.S. Borrower or the Collateral Agent of any right, privilege
or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities with
any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Collateral Agent may determine),
all without liability except to account for property actually received by it,
but the Collateral Agent shall have no duty to the U.S. Borrower to exercise
any such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
10. RIGHTS ON DEFAULT. If an Event of Default shall occur and be continuing,
the Collateral Agent on behalf of the Administrative Agents and the Lenders
may (personally or by agent), at such time or times as the Collateral Agent
in its discretion may determine (in addition to its rights under Section 9
hereof), do any one or more of the following:
(a) RIGHTS UNDER PPSA, ETC. Exercise all of the rights and remedies
granted to secured parties under the PPSA and any other applicable statute,
or otherwise available to the Collateral Agent at law or in equity.
(b) DISPOSE OF COLLATERAL. Realize on any or all of the Collateral
and sell, lease, assign, give options to purchase, or otherwise dispose of
and deliver any or all of the Collateral (or contract to do any of the
above), in one or more parcels at any public or private sale, at any
exchange, broker's board or office of the Collateral Agent or elsewhere, on
such terms and conditions as the Collateral Agent may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery.
(c) COURT-APPROVED DISPOSITION OF COLLATERAL. Apply to a court of
competent jurisdiction for the sale or foreclosure of any or all of the
Collateral.
(d) PURCHASE BY COLLATERAL AGENT. At any public sale, and to the extent
permitted by law on any private sale, bid for and purchase any or all of the
Collateral offered for sale and, upon compliance with the terms of such sale,
hold, retain and dispose of such Collateral without any further accountability
to the U.S. Borrower or any other Person with respect to such holding, retention
or disposition, except as required by law. In any such sale to the Collateral
Agent, the Collateral Agent may, for the purpose of making payment for all or
any part of the Collateral so
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purchased, use any claim for the Secured Obligations then due and payable to
it as a credit against the purchase price.
(e) TRANSFER OF PLEDGED SECURITIES. Transfer all or part of the
Collateral into the name of the Collateral Agent, any Administrative Agent or
any Lender or their nominee, with or without disclosing that the Pledged
Securities are subject to the Security Interests.
(f) VOTE PLEDGED SECURITIES. Vote any or all of the Pledged Securities
(whether or not transferred to the Collateral Agent, any Administrative Agent or
any Lender or their nominee) and give or withhold all consents, waivers and
ratifications in respect thereof and otherwise act with respect thereto as
though it were the outright owner thereof.
(g) EXERCISE OTHER RIGHTS. Exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any of the Pledged Securities as if it were the absolute owner thereof,
including the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other readjustment of any Issuer or upon the exercise by any Issuer, Lender,
Administrative Agent or the Collateral Agent of any right, privilege or option
pertaining to any of the Pledged Securities, and in connection therewith, to
deposit and deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by the Collateral Agent, the Administrative Agents
and the Lenders.
The Collateral Agent may exercise any or all of the foregoing
rights and remedies without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except as required by applicable
law) to or on the U.S. Borrower or any other Person, and the U.S. Borrower by
this Agreement waives each such demand, presentment, protest, advertisement and
notice to the extent permitted by applicable law. None of the above rights or
remedies will be exclusive of or dependent on or merge in any other right or
remedy, and one or more of such rights and remedies may be exercised
independently or in combination from time to time. Without prejudice to the
ability of the Collateral Agent to dispose of the Collateral in any manner which
is commercially reasonable, the U.S. Borrower acknowledges that a disposition of
Collateral by the Collateral Agent which takes place substantially in accordance
with the following provisions will be deemed to be commercially reasonable:
(i) Collateral may be disposed of in whole or in part;
(ii) Collateral may be disposed of by public auction, public tender
or private contract, with or without advertising and without
any other formality;
(iii) any purchaser of Collateral may be a customer of the
Collateral Agent, the Administrative Agents or the Lenders;
(iv) a disposition of Collateral may be on such terms and
conditions as to credit or otherwise as the Collateral Agent,
in is sole discretion, may deem advantageous; and
(v) the Collateral Agent may establish an upset or reserve bid
or price in respect of Collateral.
-10-
11. SALE OF PLEDGED SECURITIES. The U.S. Borrower recognizes that the Collateral
Agent, in connection with any offer or sale of any Pledged Securities, may be
required and is hereby authorized to comply with any limitation or restriction
as it may be advised by counsel is necessary to comply with applicable law,
including compliance with procedures that may restrict the number of prospective
bidders and purchasers, requiring that prospective bidders and purchasers have
certain qualifications, and restricting prospective bidders and purchasers to
Persons who will represent and agree that they are purchasing for their own
account or investment and not with a view to the distribution or resale of such
Pledged Securities. The U.S. Borrower further agrees that compliance with any
such limitation or restriction will not result in a sale being considered or
deemed not to have been made in a commercially reasonable manner, and the
Collateral Agent will not be liable or accountable to the U.S. Borrower for any
discount allowed by reason of the fact that such Pledged Securities are sold in
compliance with any such limitation or restriction.
12. APPLICATION OF PROCEEDS. All Proceeds of Collateral received by the
Collateral Agent may be applied to discharge or satisfy any expenses (including
the expenses of enforcing the Collateral Agent's rights under this Agreement),
Security Interests in favour of Persons other than the Collateral Agent,
borrowings, taxes and other outgoings affecting the Collateral or which are
considered advisable by the Collateral Agent to protect, preserve, repair,
process, maintain or enhance the Collateral or prepare it for sale or other
disposition, or to keep in good standing any Security Interests on the
Collateral ranking in priority to any of the Security Interests created by this
Agreement, or to sell, lease or otherwise dispose of the Collateral. The balance
of such Proceeds may, at the sole discretion of the Collateral Agent, be held as
collateral security for the Secured Obligations or be applied to such of the
Secured Obligations (whether or not the same are due and payable) in the
following order:
FIRST, for application by it towards payment of amounts then
due and owing and remaining unpaid in respect of the Secured
Obligations, PRO RATA among the Lenders according to the amounts of the
Secured Obligations then due and owing and remaining unpaid to the
Lenders;
SECOND, for application by it towards prepayment of the
Secured Obligations, PRO RATA among the Lenders according to the
amounts of the Secured Obligations then held by the Lenders, but in the
absence of an Event of Default, only to the extent the Borrowers are
required to make such prepayment pursuant to the Credit Agreement or as
the Borrowers may otherwise agree; and
THIRD, any balance of such Proceeds remaining after the
Secured Obligations shall have been paid in full in cash or other
immediately available funds, no Letters of Credit shall be outstanding
and the Commitments shall have been terminated shall be paid over to
the Borrowers or to whomsoever may be lawfully entitled to receive the
same.
13. DEFICIENCY. The U.S. Borrower shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Secured Obligations and the fees and
disbursements of any solicitors employed by the Collateral Agent,
either Administrative Agent or any Lender to collect such deficiency.
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14. COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. The U.S. Borrower
constitutes and appoints the Collateral Agent and any officer or agent of the
Collateral Agent, with full power of substitution, as the U.S. Borrower's
true and lawful attorney-in-fact with full power and authority in the place
of the U.S. Borrower and in the name of the U.S. Borrower or in its own name,
from time to time in the Collateral Agent's discretion after an Event of
Default has occured, to take any and all appropriate action and to execute
any and all documents and instruments as, in the opinion of such attorney
acting reasonably, may be necessary or desirable to accomplish the purposes
of this Agreement. These powers are coupled with an interest and are
irrevocable until this Agreement is terminated and the Security Interests
created by this Agreement are released. Nothing in this Section affects the
right of the Collateral Agent as secured party, or any other Person on the
Collateral Agent's behalf, to sign and file or deliver (as applicable) all
such financing statements, financing change statements, notices, verification
agreements and other documents relating to the Collateral and this Agreement
as the Collateral Agent or such other Person considers appropriate.
15. PERFORMANCE BY COLLATERAL AGENT OF U.S. BORROWER'S LIABILITIES. If the
U.S. Borrower fails to perform or comply with any of the obligations of the
U.S. Borrower under this Agreement, the Collateral Agent may, but need not,
perform or otherwise cause the performance or compliance of such obligation,
provided that such performance or compliance will not constitute a waiver,
remedy or satisfaction of such failure. The expenses of the Collateral Agent
incurred in connection with any such performance or compliance will be
payable by the U.S. Borrower to the Collateral Agent immediately on demand,
and until paid, any such expenses will form part of the Secured Obligations
and will be secured by the Security Interests created by this Agreement.
16. INTEREST. If any amount payable to the Collateral Agent under this
Agreement is not paid when due, the U.S. Borrower will pay to the Collateral
Agent (for the ratable benefit of the Secured Parties), immediately on
demand, interest at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due ABR Loans
under the Credit Agreement to the date reimbursed by the U.S. Borrower. All
amounts payable by the U.S. Borrower to the Collateral Agent under this
Agreement, and all interest on all such amounts, compounded monthly on the
last Business Day of each month, will form part of the Secured Obligations
and will be secured by the Security Interests created by this Agreement.
17. SEVERABILITY. Any provision of this 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.
18. DUTY OF COLLATERAL AGENT. The Collateral Agent's sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in
its possession shall be to deal with it in the same manner as the Collateral
Agent deals with similar property for its own account. None of the Collateral
Agent, either Administrative Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the U.S. Borrower or any other Person or to
take any other action whatsoever with regard to the Collateral or any part
thereof. The powers
-12-
conferred on the Collateral Agent, the Administrative Agents and the Lenders
hereunder are solely to protect the Collateral Agent's, the Administrative
Agents' and the Lenders' interests in the Collateral and shall not impose any
duty upon the Collateral Agent, either Administrative Agent or any Lender to
exercise any such powers. The Collateral Agent, the Administrative Agents and
the Lenders shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to the U.S.
Borrower for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
19. NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. None of the
Collateral Agent, either Administrative Agent or any Lender shall by any act
(except by a written instrument pursuant to Section 22), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default. No failure to exercise, nor any delay
in exercising, on the part of the Collateral Agent, either Administrative
Agent or any Lender, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the
Collateral Agent, either Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent, such Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any other rights or remedies provided by law.
20. NOTICES. All notices, requests and demands to or upon the Collateral
Agent or the U.S. Borrower hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement.
21. RELEASE OF INFORMATION. The U.S. Borrower authorizes the Collateral
Agent to provide a copy of this Agreement and such other information as may
be requested of the Collateral Agent by Persons entitled thereto pursuant
to any applicable legislation, and otherwise with the consent of the U.S.
Borrower.
22. WAIVERS AND INDEMNITY. To the extent permitted by applicable law, the U.S.
Borrower unconditionally and irrevocably waives (i) all claims, damages and
demands it may acquire against the Collateral Agent or any Secured Party arising
out of the exercise by the Collateral Agent or any Secured Party of any rights
or remedies under this Agreement or at law, and (ii) all of the rights, benefits
and protections given by any present or future statute that imposes limitations
on the rights, powers or remedies of a secured party or on the methods of, or
procedures for, realization of security, including any "seize or xxx" or
"anti-deficiency" statute or any similar provision of any other statute. None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Collateral
Agent and the U.S. Borrower. The Collateral Agent and the Secured Parties will
not, by any act or delay, be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent or the Secured Parties, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder will preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral
-13-
Agent or the Secured Parties of any right or remedy hereunder on any one
occasion will not be construed as a bar to any right or remedy which the
Collateral Agent or the Secured Parties would otherwise have on any future
occasion. Neither the taking of any judgment nor the exercise of any power of
seizure or sale will extinguish the liability of the U.S. Borrower to pay the
Secured Obligations, nor will the same operate as a merger or any covenant
contained in this Agreement or of any other liability, nor will the
acceptance of any payment or other security constitute or create any
novation. The U.S. Borrower agrees to indemnify the Collateral Agent and the
Secured Parties from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (except by reason of the gross
negligence or willful misconduct of the Collateral Agent or the other Secured
Parties or any of its agents or employees) which may be imposed on, incurred
by, or asserted against the Collateral Agent and arising by reason of any
action (including any action referred to in this Agreement) or inaction or
omission to do any act legally required by the U.S. Borrower. This
indemnification will survive the satisfaction, release or extinguishment of
the Secured Obligations and the Security Interests created by this Agreement.
23. AMALGAMATION. The U.S. Borrower acknowledges that if it amalgamates with
any other corporation or corporations, then (i) the Collateral and the
Security Interests created by this Agreement will extend to and include all
the property and assets of the amalgamated corporation and to any property or
assets of the amalgamated corporation thereafter owned or acquired, and (ii)
the term "U.S. Borrower", where used in this Agreement, will extend to and
include the amalgamated corporation.
24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.
25. SUBMISSION TO JURISDICTION; WAIVERS. The U.S. Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the Province of Ontario and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the U.S. Borrower at
its address referred to in Section 10.2 of the Credit Agreement;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
26. INTERPRETATION. Unless otherwise expressly provided in this Agreement, if
any matter in this Agreement is subject to the consent or approval of the
Collateral Agent or is to be acceptable to the Collateral Agent, such consent,
approval or determination of acceptability will be in the sole discretion of the
Collateral Agent. If any provision in this Agreement refers to any action taken
or to be taken by the U.S. Borrower, or which the U.S. Borrower is prohibited
from taking, such provision will be interpreted to include any and all means,
direct or indirect, of taking, or not taking, such action. The division of this
Agreement into sections and paragraphs, and the insertion of headings, is for
convenience of reference only and will not affect the construction or
interpretation of this Agreement. Unless the context otherwise requires, words
importing the singular include the plural and vice versa, and words importing
gender include all genders. When used in this Agreement, the word "including"
(or includes) means "including (or includes) without limitation". Any reference
in this Agreement to a "Section" means the relevant Section of this Agreement.
27. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the successors
and assigns of the U.S. Borrower and shall inure to the benefit of the
Collateral Agent, the Administrative Agents and the Lenders and their successors
and assigns; PROVIDED that the U.S. Borrower may not assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Agent.
28. ACKNOWLEDGMENT OF RECEIPT/WAIVER. The U.S. Borrower acknowledges receipt of
an executed copy of this Agreement and, to the extent permitted by applicable
law, waives the right to receive a copy of any financing statement, financing
change statement or verification statement in respect of any registered
financing statement or financing change statement prepared, registered or issued
in connection with this Agreement.
Dated: ______________, 2001.
INTERNATIONAL MULTIFOODS CORPORATION
Address: 000 Xxxxxxxx Xxxx By:
Suite 300 -------------------------------
Xxxxxxxxxx, XX 00000 Name:
Title:
Attention: Vice President and c/s
Treasurer
Facsimile: 000-000-0000 By:
-------------------------------
Name:
Title:
SCHEDULE A
ISSUER(S) DESCRIPTION OF SECURITIES
--------- -------------------------
Xxxxx Xxxx Multifoods Inc. [-] [NO. OF THE ] [COMMON SHARES] in the
capital of the Issuer, initially represented
by Share Certificate No. _____________
EXHIBIT E
[address of property]
FORM OF MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
RENTS AND LEASES AND SECURITY AGREEMENT
from
[___________________],
Mortgagor
to
CANADIAN IMPERIAL BANK OF COMMERCE, as Collateral Agent,
Mortgagee
DATED AS OF ______, 2001
After recording, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxx Xxxxx
MORTGAGE, ASSIGNMENT OF
RENTS AND LEASES AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT, dated as of November __, 2001 is made by [_____________], a
[_______________] ("Mortgagor"), having an address at [_________________], to
CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian chartered bank, as Collateral
Agent ("Mortgagee") [for the Secured Parties (as defined in the Credit Agreement
hereinafter defined)] [for the Benefitted Parties (as defined in the Collateral
Agency Agreement dated as of November __, 2001 among International Multifoods
Corporation (the "U.S. Borrower"), the subsidiaries of the U.S. Borrower from
time to time parties thereto, and Mortgagee (the "Collateral Agency
Agreement")], having an address at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. References to this "Mortgage" shall mean this instrument and any and all
renewals, modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument.
BACKGROUND
A. Mortgagor (i) is the owner of the fee simple estate in the
parcel(s) of real property described on Schedule A attached (the "Land"), and
(ii) owns, leases or otherwise has the right to use all of the buildings,
improvements, structures and fixtures now or subsequently located on the Land
(the "Improvements"; the Land and the Improvements being collectively referred
to as the "Real Estate").
B. That certain Credit Agreement dated September 28, 2001 has
been entered into by [International Multifoods Corporation, as U.S. Borrower]
[the U.S. Borrower], Xxxxx Xxxx Multifoods Inc., as Canadian Borrower
(collectively, the "Borrowers"), the several lenders from time to time party
thereto (the "Lenders"), Rabobank International, as Documentation Agent, U.S.
Bank National Association and UBS Warburg LLC, as Syndication Agents, and
Canadian Imperial Bank of Commerce, as U.S. Administrative Agent and Canadian
Administrative Agent, as amended (the "Credit Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Credit
Agreement. References in this Mortgage to the "Default Rate" shall mean the
interest rate applicable to ABR Loans as provided for in the Credit Agreement
PLUS 2%. The terms of the Credit Agreement are incorporated by reference in this
Mortgage as if the terms thereof were fully set forth herein. In the event of
any conflict between the provisions of this Mortgage and the provisions of the
Credit Agreement, the applicable provisions of the Credit Agreement shall govern
and control.
C. [It is a requirement under the MTN Indenture (as defined in
the Collateral Agency Agreement) that the assets in which a security interest is
created hereunder must secure the securities issued under the MTN Indenture
equally and ratably.]
D. The Lenders' agreement to make the Loans, to issue the
Letters of Credit and to enter into any Hedge Agreements are conditioned upon,
among other things, the execution and delivery by Mortgagor of this Mortgage to
Mortgagee for the ratable benefit of the Lenders.
3
GRANTING CLAUSES
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure
the following (collectively, the "Obligations"):
(a) repayment of the principal of and payment of interest
(including, without limitation, interest accruing after the maturity of
the Loans made by each Lender and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Mortgagor, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) on the Loans made by each Lender to Mortgagor;
(b) due and punctual payment of all other obligations and
liabilities of Mortgagor to Mortgagee and the Lenders, whether direct
or indirect, absolute or contingent, due or to become due, now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, the Guarantee and Collateral Agreements,
the Canadian Pledge Agreements, the Quebec Security Documents, the
Loans, any Hedge Agreements, this Mortgage, or any other document made,
delivered or given in connection herewith or therewith, and any
amendments, replacements or modifications of any of the foregoing
(collectively, the "Loan Documents"), in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to Mortgagee or to the
Lenders that are required to be paid by Mortgagor pursuant to the terms
of the Credit Agreement, the Guarantee and Collateral Agreements, this
Mortgage or any other Loan Documents) [(the items set forth in clauses
(a) and (b) being referred to herein collectively as the
"Indebtedness")];
(c) [the repayment of principal of, and premium, if any, and
interest on, the securities issued under the MTN Indenture (the "Public
Debt Securities") (including, without limitation, interest accruing at
the then applicable rate provided in the instruments governing the
Public Debt Securities after the maturity of the Public Debt Securities
and interest accruing at the then applicable rate provided in such
instruments after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) (the items set forth above being referred
to collectively as the "Public Debt Obligations") (the items set forth
in clauses (a), (b) and (c) being referred to herein collectively as
the "Indebtedness")]
(d) the due and punctual performance and observance of each
obligation, term, covenant and condition to be performed or observed by
Mortgagor under, in connection with or pursuant to the provisions of
the Credit Agreement, the Notes, the Guarantee and Collateral
Agreements, any Hedge Agreements, this Mortgage, the Canadian Pledge
Agreements, the Quebec Security Documents, any of the other Loan
Documents, [the MTN Indenture and the Public Debt Securities];
4
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY GRANTS, BARGAINS, SELLS, ALIENS, REMISES, RELEASES, CONVEYS, MORTGAGES,
ASSIGNS, TRANSFERS, HYPOTHECATES, PLEDGES, DELIVERS, SETS OVER, WARRANTS AND
CONFIRMS UNTO MORTGAGEE, ITS SUCCESSORS AND ASSIGNS FOREVER:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand
whatsoever of Mortgagor, in possession or expectancy, in and to the
Real Estate or any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues, profits
and revenue thereof and all land lying in the bed of any street, road
or avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all right, title and interest of Mortgagor in and to all
of the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, and fittings of every kind and nature
whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or
subsequently acquired by Mortgagor and now or subsequently attached to,
or contained in or used or usable in any way in connection with any
operation or letting of the Real Estate, including but without limiting
the generality of the foregoing, all screens, awnings, shades, blinds,
curtains, draperies, artwork, carpets, rugs, storm doors and windows,
furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and
systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers,
sprinkler systems and other fire prevention and extinguishing apparatus
and materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every kind
and description (all of the foregoing in this paragraph (D) being
referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials whether stored at the Real Estate or offsite, and,
in each such case, without any further mortgage, conveyance, assignment
or other act by Mortgagor;
5
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and all
rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined below)
(collectively, the "Rents");
(G) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's right, title and interest in, to and under
all such insurance policies and all proceeds of any such insurance
policies (including title insurance policies) including the right to
collect and receive such proceeds, subject to the provisions relating
to insurance generally set forth below; and all awards and other
compensation, including the interest payable thereon and the right to
collect and receive the same, made to the present or any subsequent
owner of the Real Estate or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Real Estate or any
easement or other right therein;
(H) all right, title and interest of Mortgagor in and to (i)
all contracts from time to time executed by Mortgagor or any manager or
agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate,
together with the right to exercise such options and all leases of
Equipment (collectively, the "Contracts"), (ii) all consents, licenses,
building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or
operation of the Real Estate or any part thereof (collectively, the
"Permits") and (iii) all drawings, plans, specifications and similar or
related items relating to the Real Estate (collectively, the "Plans");
(I) any and all monies now or subsequently on escrow deposit
for the payment of real estate taxes or special assessments against the
Real Estate or for the payment of premiums on insurance policies
covering the foregoing property;
(J) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (F) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "Mortgaged Property").
6
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Obligations are fully paid and fully
performed except as otherwise provided in SECTION 30.
TERMS AND CONDITIONS
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. WARRANTY OF TITLE. Mortgagor warrants that it has record title in
fee simple to the Premises, and good title to the rest of the Mortgaged
Property, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Mortgagee to insure the lien
of this Mortgage and to any other lien expressly permitted under the Credit
Agreement all matters of record and all easements, reservations, restrictions
and other encumbrances which do not preclude or materially interfere with the
operation of the Premises as now conducted (collectively, the "Permitted
Exceptions") and Mortgagor shall defend and preserve such title and the lien of
this Mortgage thereon against all claims of all persons and entities. Mortgagor
represents and warrants that it has the right to mortgage the Mortgaged
Property.
2. PAYMENT OF INDEBTEDNESS. Mortgagor shall cause to be paid and
performed the Indebtedness at the times and places and in the manner specified
in the Register, the Credit Agreement, the Guarantee and Collateral Agreements,
[and] any other Loan Document [and the MTN Indenture] and shall cause to be
performed the Obligations as and when required by the Credit Agreement, the
Guarantee and Collateral Agreements [and] the other Loan Documents, [and the MTN
Indenture].
3. REQUIREMENTS.
(a) Mortgagor shall promptly comply with, or cause to be complied
with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements,
and irrespective of the nature of the work to be done, of each of the United
States of America, any State and any municipality, local government or other
political subdivision thereof and any agency, department, bureau, board,
commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "Governmental Authority") which has
jurisdiction over the Mortgaged Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property, except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect. All present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, rules, regulations and requirements of every
Governmental Authority applicable to Mortgagor or to any of the Mortgaged
Property and all covenants, restrictions, and conditions which now or later
may be applicable to any of the Mortgaged Property are collectively referred
to as the "Legal Requirements".
7
(b) From and after the date of this Mortgage, Mortgagor shall not
by act or omission permit any building or other improvement on any premises
not subject to the lien of this Mortgage to rely on the Premises or any part
thereof or any interest therein to fulfill any Legal Requirement, and
Mortgagor hereby assigns to Mortgagee any and all rights to give consent for
all or any portion of the Premises or any interest therein to be so used.
Mortgagor shall not by act or omission impair the integrity of any of the
Real Estate as a single zoning lot separate and apart from all other
premises. Mortgagor represents that it does not have actual knowledge that
any parcel of the Real Estate does not constitute a legally subdivided lot,
in compliance with all subdivision laws and similar Legal Requirements. Any
act or omission by Mortgagor which would result in a violation of any of the
provisions of this subsection shall be void.
4. PAYMENT OF TAXES AND OTHER IMPOSITIONS. (a) Except as provided in
4(d) below prior to the imposition of any interest or penalties for
nonpayment, Mortgagor shall pay and discharge all taxes of every kind and
nature (including, without limitation, all real and personal property,
income, franchise, withholding, transfer, gains, profits and gross receipts
taxes), all charges for any easement or agreement maintained for the benefit
of any of the Mortgaged Property, all general and special assessments,
levies, permits, inspection and license fees, all water and sewer rents and
charges and all other public charges even if unforeseen or extraordinary,
imposed upon or assessed against or which may become a lien on any of the
Mortgaged Property, or arising in respect of the occupancy, use or possession
thereof, together with any penalties or interest on any of the foregoing (all
of the foregoing are collectively referred to as the "Impositions").
Mortgagor shall furnish Mortgagee upon request within 30 days after the date
upon which any such Imposition is payable hereunder by Mortgagor (i) original
or copies of receipted bills and cancelled checks evidencing payment of such
Imposition if it is a real estate tax or other public charge and (ii)
evidence reasonably acceptable to Mortgagee showing the payment of any other
such Imposition. If by law any Imposition, at Mortgagor's option, may be paid
in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Mortgagor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments
with interest, if any.
(b) Nothing herein shall affect any right or remedy of Mortgagee
under this Mortgage or otherwise, without notice or demand to Mortgagor, to
pay any Imposition after the date such Imposition shall have become an Event
of Default, and to add to the Obligations the amount so paid, together with
interest from the time of payment at the Default Rate. Any sums paid by
Mortgagee in discharge of any Impositions shall be (i) a lien on the Premises
secured hereby prior to any right or title to, interest in, or claim upon the
Premises, subordinate to the lien of this Mortgage, and (ii) payable on
demand by Mortgagor to Mortgagee together with interest at the Default Rate.
(c) Mortgagor shall not claim, demand or be entitled to receive
any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged
Property or any part thereof, and shall not claim any deduction from the
taxable value of the Mortgaged Property by reason of this Mortgage.
8
(d) Mortgagor shall have the right to contest or object in good
faith to the amount or validity of any Imposition or Legal Requirement by
appropriate legal proceedings, but such right shall not be deemed or
construed in any way as relieving, modifying, or extending Mortgagor's
covenant to pay any such Imposition at the time and in the manner provided in
this Section unless (i) in the case of an unpaid Imposition such proceedings
shall operate conclusively to suspend the collection thereof from Mortgagor,
Mortgagee and the Mortgaged Property, (ii) neither the Mortgaged Property nor
any interest therein would be in imminent danger of being sold, forfeited or
lost, (iii) in the case of a Legal Requirement, neither Mortgagor nor
Mortgagee would be in any danger of any additional civil or any criminal
liability for the failure to comply therewith, and (iv) Mortgagor shall
maintain adequate reserves with respect thereto on its books in conformity
with GAAP, and shall have furnished such security as may be reasonably
requested by Mortgagee.
5. INSURANCE. (a) Mortgagor shall cause to be maintained such
insurance as is required to be maintained under the Credit Agreement and such
other insurance in such amounts as Mortgagee may reasonably request from time
to time against loss or damage by any other risk commonly insured by persons
occupying or using like properties for like purposes in the locality or
localities in which the Real Estate is situated.
(b) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property, all right, title and interest of
Mortgagor in and to any insurance policies then in force shall pass to the
purchaser or grantee.
6. RESTRICTIONS ON LIENS AND ENCUMBRANCES. Except for the lien of this
Mortgage and the Permitted Exceptions, and except as may be permitted under the
Credit Agreement, Mortgagor shall not further mortgage, nor otherwise encumber
the Mortgaged Property nor create or suffer to exist any lien, charge or
encumbrance on the Mortgaged Property, or any part thereof, whether superior or
subordinate to the lien of this Mortgage and whether recourse or non-recourse.
7. TRANSFER RESTRICTIONS. Except as may be permitted under the
Credit Agreement, Mortgagor shall not sell, transfer, convey or assign all or
any portion of, or any interest in, the Mortgaged Property.
8. FURTHER ASSURANCES. To further assure Mortgagee's rights under this
Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or execute any
additional documents (including, but not limited to, a separate assignment of
each Lease in recordable form) as may be required by Mortgagee to confirm the
lien of this Mortgage and all other rights or benefits conferred on Mortgagee.
9. MORTGAGEE'S RIGHT TO PERFORM. If Mortgagor fails to perform any of
the covenants or agreements of Mortgagor, and such failure has become an Event
of Default and is continuing, Mortgagee, without waiving or releasing Mortgagor
from any obligation or default under this Mortgage, may, at any time (but shall
be under no obligation to) pay or perform the same, and the amount or cost
thereof, with interest at the Default Rate, to the fullest extent permitted by
applicable law, shall immediately be due from Mortgagor to Mortgagee and the
same shall be
9
secured by this Mortgage and shall be a lien on the Mortgaged Property prior
to any right, title to, interest in or claim upon the Mortgaged Property
attaching subsequent to the lien of this Mortgage. No payment or advance of
money by Mortgagee under this Section shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee.
10. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute and Event of Default hereunder:
(a) an Event of Default shall occur under the Credit Agreement; or
(b) any breach of Mortgagor's obligations under Sections 6 and 7
of this Mortgage.
11. REMEDIES.
(a) Upon the occurrence of any Event of Default, in addition to
any other rights and remedies Mortgagee may have pursuant to the Loan
Documents, or as provided by law, and without limitation, if such event is an
event specified in paragraph (f) of Section 8 of the Credit Agreement with
respect to Borrowers, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon) and all other amounts
owing under the Credit Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) shall become due and payable, and if such
event is any other Event of Default, the Mortgagee, at the request of the
Required Lenders, may, by notice to the Mortgagor, take either or both of the
following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans (with accrued interest thereon)
and all other amounts owing under the Credit Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) to be due and payable
forthwith, in whole or in part, whereupon the same shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Mortgagor. Except as
expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived. In addition, upon
the occurrence of any Event of Default, Mortgagee may immediately take such
action, without notice or demand, as it deems advisable to protect and
enforce its rights against Mortgagor and in and to the Mortgaged Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such manner as
Mortgagee may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law,
(A) institute and maintain an action of mortgage foreclosure against
all or any part of the Mortgaged Property, (B) institute and maintain
an action on the Loans, the Credit Agreement, the Guarantee and
Collateral Agreements or any of the other Loan Documents, (C) sell all
or part of the Mortgaged Property (Mortgagor expressly granting to
Mortgagee the power of sale), or (D) take such other action at law or
in equity for the enforcement of this
10
Mortgage or any of the Loan Documents as the law may allow. Mortgagee
may proceed in any such action to final judgment and execution thereon
for all sums due hereunder, together with interest thereon at the
Default Rate and all costs of suit, including, without limitation,
reasonable attorneys' fees and disbursements. To the fullest extent
permitted by applicable law, interest at the Default Rate shall be due
on any judgment obtained by Mortgagee from the date of judgment until
actual payment is made of the full amount of the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other collateral as security for the
Obligations enter into and upon the Mortgaged Property and each and
every part thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the Mortgaged
Property to Mortgagee upon demand at any such time) and use, operate,
manage, maintain and control the Mortgaged Property and every part
thereof. Following such entry and taking of possession, Mortgagee shall
be entitled, without limitation, (x) to lease all or any part or parts
of the Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its reasonable discretion consistent
with prudent business practices, deem proper, (y) to enforce, cancel or
modify any Lease and (z) generally to execute, do and perform any other
act, deed, matter or thing concerning the Mortgaged Property as
Mortgagee shall deem appropriate as fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose it,
shall be entitled to the appointment of a receiver. In case of a foreclosure
sale, the Real Estate may be sold, at Mortgagee's election, in one parcel or
in more than one parcel and Mortgagee is specifically empowered, (without
being required to do so, and in its sole and absolute discretion) to cause
successive sales of portions of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding to the contrary any exculpatory or non-recourse language
which may be contained herein, Mortgagee shall be entitled to enjoin such
breach and obtain specific performance of any covenant, agreement, term or
condition and Mortgagee shall have the right to invoke any equitable right or
remedy as though other remedies were not provided for in this Mortgage.
12. RIGHT OF MORTGAGEE TO CREDIT SALE. Upon the occurrence of any sale
made under this Mortgage, whether made under the power of sale or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Credit Agreement, the Notes,
the Guarantee and Collateral Agreements, the Register, the other Loan Documents
and any documents evidencing expenditures secured hereby
11
may be presented to the person or persons conducting the sale in order that
the amount so used or applied may be credited upon the Indebtedness as having
been paid.
13. APPOINTMENT OF RECEIVER. If an Event of Default shall have occurred
and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
14. EXTENSION, RELEASE, ETC. (a) Without affecting the lien or charge
of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as
a defense to any proceeding instituted by Mortgagee to collect the
Indebtedness or to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
12
15. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. (a) It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "Code") of the
State in which the Mortgaged Property is located. If an Event of Default shall
occur under this Mortgage, then in addition to having any other right or remedy
available at law or in equity, Mortgagee shall have the option of either (i)
proceeding under the Code and exercising such rights and remedies as may be
provided to a secured party by the Code with respect to all or any portion of
the Mortgaged Property which is personal property (including, without
limitation, taking possession of and selling such property) or (ii) treating
such property as real property and proceeding with respect to both the real and
personal property constituting the Mortgaged Property in accordance with
Mortgagee's rights, powers and remedies with respect to the real property (in
which event the default provisions of the Code shall not apply). If Mortgagee
shall elect to proceed under the Code, then ten days' notice of sale of the
personal property shall be deemed reasonable notice and the reasonable expenses
of retaking, holding, preparing for sale, selling and the like incurred by
Mortgagee shall include, but not be limited to, reasonable attorneys' fees and
legal expenses. At Mortgagee's request, Mortgagor shall assemble the personal
property and make it available to Mortgagee at a place designated by Mortgagee
which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this
Mortgage upon recording or registration in the real estate records of the
proper office shall constitute a financing statement filed as a "fixture
filing" within the meaning of Sections 9-313 and 9-402 of the Code; (iii)
Mortgagor is the record owner of the Land; and (iv) the addresses of
Mortgagor and Mortgagee are as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form satisfactory to Mortgagee, covering all or any part of
the Mortgaged Property and will further execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any financing statement,
affidavit, continuation statement or certificate or other document as
Mortgagee may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Mortgage and such
security instrument. Mortgagor further agrees to pay to Mortgagee on demand
all costs and expenses incurred by Mortgagee in connection with the
preparation, execution, recording, filing and re-filing of any such document
and all reasonable costs and expenses of any record searches for financing
statements Mortgagee shall reasonably require. If Mortgagor shall fail to
furnish any financing or continuation statement within 10 days after request
by Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing
or continuation statements in the records relating to personal property or
chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this
Mortgage as real property, as set forth above.
16. ASSIGNMENT OF RENTS. Mortgagor hereby assigns to Mortgagee the
Rents as further security for the payment of the Indebtedness and performance
of the Obligations, and
13
Mortgagor grants to Mortgagee the right to enter the Mortgaged Property for
the purpose of collecting the same and to let the Mortgaged Property or any
part thereof, [and to apply the Rents on account of the Indebtedness]
[in accordance with the U.S. Shared Collateral Agreement (as defined in the
Collateral Agency Agreement)]. The foregoing assignment and grant is present
and absolute and shall continue in effect until the Indebtedness is paid in
full, but Mortgagee hereby waives the right to enter the Mortgaged Property for
the purpose of collecting the Rents and Mortgagor shall be entitled to collect,
receive, use and retain the Rents until the occurrence of an Event of Default
under this Mortgage; such right of Mortgagor to collect, receive, use and
retain the Rents may be revoked by Mortgagee upon the occurrence of any Event
of Default under this Mortgage by giving not less than five days' written
notice of such revocation to Mortgagor; in the event such notice is given,
Mortgagor shall pay over to Mortgagee, or to any receiver appointed to
collect the Rents and any lease security deposits. Mortgagor shall not accept
prepayments of installments of Rent to become due for a period of more than
one month in advance (except for security deposits and estimated payments of
percentage rent, if any).
17. TRUST FUNDS. All lease security deposits of the Real Estate shall
be treated as trust funds not to be commingled with any other funds of
Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall furnish
Mortgagee satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases (other than patient and other occupancy agreements entered into by
Mortgagor in the ordinary course of business) not previously delivered to
Mortgagee, which statement shall be certified by Mortgagor.
18. ADDITIONAL RIGHTS. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Indebtedness
or the Obligations. Any such application shall not be construed to cure or waive
any Event of Default or invalidate any act taken by Mortgagee on account of such
Event of Default.
19. NOTICES. All notices, requests, demands and other communications
hereunder shall be given as provided in the section of the Credit Agreement
entitled "Notices".
20. NO ORAL MODIFICATION. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the
date of this Mortgage relating to this Mortgage shall be superior to the
rights of the holder of any intervening or subordinate lien or encumbrance.
21. PARTIAL INVALIDITY. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.
Notwithstanding to the contrary anything contained in this Mortgage or in any
provisions of the Indebtedness or Loan Documents, the obligations of Mortgagor
and of any other obligor under the Indebtedness or Loan Documents shall be
subject to the limitation that Mortgagee shall not charge, take or receive, nor
shall Mortgagor or any other obligor be obligated to pay to
14
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
22. MORTGAGOR'S WAIVER OF RIGHTS. To the fullest extent permitted by
law, Mortgagor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption or extension, or
requiring foreclosure of this Mortgage before exercising any other remedy
granted hereunder and Mortgagor, for Mortgagor and its successors and assigns,
and for any and all persons ever claiming any interest in the Mortgaged
Property, to the extent permitted by law, hereby waives and releases all rights
of valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of foreclosure of the liens hereby created.
23. REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled to enforce
payment of the Indebtedness and performance of the Obligations and to exercise
all rights and powers under this Mortgage or under any of the other Loan
Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its
enforcement, shall prejudice or in any manner affect Mortgagee's right to
realize upon or enforce any other security now or hereafter held by Mortgagee,
it being agreed that Mortgagee shall be entitled to enforce this Mortgage and
any other security now or hereafter held by Mortgagee in such order and manner
as Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given by any
of the Loan Documents to Mortgagee or to which it may otherwise be entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by Mortgagee. In no event shall Mortgagee, in the
exercise of the remedies provided in this Mortgage (including, without
limitation, in connection with the assignment of Rents to Mortgagee, or the
appointment of a receiver and the entry of such receiver on to all or any part
of the Mortgaged Property), be deemed a "mortgagee in possession," and Mortgagee
shall not in any way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.
24. MULTIPLE SECURITY. If (a) the Premises shall consist of one or more
parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold one or more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the Indebtedness upon other property in the State
in which the Premises are located (whether or not such property is owned by
Mortgagor
15
or by others) or (c) both the circumstances described in clauses (a) and (b)
shall be true, then to the fullest extent permitted by law, Mortgagee may, at
its election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Indebtedness
(including the Mortgaged Property), which action may be brought or
consolidated in the courts of any county in which any of such collateral is
located. Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to the Secured Parties to extend
the Indebtedness, and Mortgagor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of FORUM NON CONVENIENS which it may now or hereafter
have. Mortgagor further agrees that if Mortgagee shall be prosecuting one or
more foreclosure or other proceedings against a portion of the Mortgaged
Property or against any collateral other than the Mortgaged Property, which
collateral directly or indirectly secures the Indebtedness, or if Mortgagee
shall have obtained a judgment of foreclosure and sale or similar judgment
against such collateral, then, whether or not such proceedings are being
maintained or judgments were obtained in or outside the State in which the
Premises are located, Mortgagee may commence or continue foreclosure
proceedings and exercise its other remedies granted in this Mortgage against
all or any part of the Mortgaged Property and Mortgagor waives any objections
to the commencement or continuation of a foreclosure of this Mortgage or
exercise of any other remedies hereunder based on such other proceedings or
judgments, and waives any right to seek to dismiss, stay, remove, transfer or
consolidate either any action under this Mortgage or such other proceedings
on such basis. Neither the commencement nor continuation of proceedings to
foreclose this Mortgage nor the exercise of any other rights hereunder nor
the recovery of any judgment by Mortgagee in any such proceedings shall
prejudice, limit or preclude Mortgagee's right to commence or continue one or
more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Premises are located)
which directly or indirectly secures the Indebtedness, and Mortgagor
expressly waives any objections to the commencement of, continuation of, or
entry of a judgment in such other proceedings or exercise of any remedies in
such proceedings based upon any action or judgment connected to this
Mortgage, and Mortgagor also waives any right to seek to dismiss, stay,
remove, transfer or consolidate either such other proceedings or any action
under this Mortgage on such basis. It is expressly understood and agreed that
to the fullest extent permitted by law, Mortgagee may, at its election, cause
the sale of all collateral which is the subject of a single foreclosure
action at either a single sale or at multiple sales conducted simultaneously
and take such other measures as are appropriate in order to effect the
agreement of the parties to dispose of and administer all collateral securing
the Indebtedness (directly or indirectly) in the most economical and least
time-consuming manner.
25. SUCCESSORS AND ASSIGNS. All covenants of Mortgagor contained in
this Mortgage are imposed solely and exclusively for the benefit of Mortgagee
and its successors and assigns, and no other person or entity shall have
standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent
16
owners, encumbrancers and tenants of the Mortgaged Property, and shall inure
to the benefit of Mortgagee, its successors and assigns. The word "Mortgagor"
shall be construed as if it read "Mortgagors" whenever the sense of this
Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.
26. NO WAIVERS, ETC. Any failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the terms and provisions of this Mortgage
shall not be deemed to be a waiver of any of the terms and provisions hereof,
and Mortgagee, notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by Mortgagor of any and all of the terms
and provisions of this Mortgage to be performed by Mortgagor. Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien or any subordinate mortgage on
the Mortgaged Property, any part of the security held for the obligations
secured by this Mortgage without, as to the remainder of the security, in
anywise impairing or affecting the lien of this Mortgage or the priority of such
lien over any subordinate lien.
27. GOVERNING LAW, ETC. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Real Estate is
located, except that Mortgagor expressly acknowledges that by their terms the
Credit Agreement, the Guarantee and Collateral Agreements and the other Loan
Documents shall be governed and construed in accordance with the laws of the
State of New York, without regard to principles of conflict of law, and for
purposes of consistency, Mortgagor agrees that in any IN PERSONAM proceeding
related to this Mortgage the rights of the parties to this Mortgage shall also
be governed by and construed in accordance with the laws of the State of New
York governing contracts made and to be performed in that State, without regard
to principles of conflict of law.
28. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein," the word
"Mortgagee" shall mean "Mortgagee or any successor Mortgagee," the word
"Register" shall mean "the Register, the Credit Agreement or any other evidence
of indebtedness secured by this Mortgage," the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa. The captions
in this Mortgage are for convenience of reference only and in no way limit or
amplify the provisions hereof.
29. SUCCESSOR MORTGAGOR. In the event ownership of the Mortgaged
Property or any portion thereof becomes vested in a person other than the
Mortgagor herein named, Mortgagee may, without notice to the Mortgagor herein
named, whether or not Mortgagee has given written consent to such change in
ownership, deal with such successor or successors in interest with reference to
this Mortgage and the Indebtedness and the Obligations, and in the same manner
as
17
with the Mortgagor herein named, without in any way vitiating or discharging
Mortgagor's liability hereunder or under the Indebtedness and the Obligations.
30. RECONVEYANCE OF MORTGAGE. Upon payment in full of the Indebtedness,
the termination of all Commitments under the Credit Agreement secured hereby and
the full compliance with the Obligations then required to be complied with [and
the Administrative Agent and the Public Debt Trustee, on behalf of the
Benefitted Parties, have so certified to Mortgagee], Mortgagee shall release the
encumbrance of this Mortgage. If any of the Mortgaged Property shall be sold,
transferred or otherwise disposed of by Mortgagor in a transaction permitted by
the Credit Agreement, then Mortgagee shall execute and deliver to Mortgagor (at
the sole cost and expense of Mortgagor) all releases, reconveyances or other
documents reasonably necessary or desirable for the release of such Mortgaged
Property from the encumbrance of this Mortgage.
[By acceptance of the benefits hereof, each Secured Party
acknowledges and consents to the provisions of this Section 30, agrees that
the Mortgagee shall incur no liability whatsoever to any Secured Party for
any release effected by the Mortgagee in accordance with this Section 30 and
agrees that the Administrative Agent shall incur no liability whatsoever to
any Secured Party for any release directed or consented to by it in
accordance with the Credit Agreement.]
31. RECEIPT OF COPY. Mortgagor acknowledges that it has received a
true copy of this Mortgage.
[Remainder of Page Intentionally Left Blank]
18
This Mortgage has been duly executed by Mortgagor on the date first above
written.
[------------------------]
By:
----------------------------
Name:
Title:
ACKNOWLEDGMENT
State of New York )
) ss.
County of New York )
On this __ day of ___________ in the year 2001 before me,
__________, a Notary Public of said State, duly commissioned and sworn,
personally appeared ____________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as president (or secretary) or on behalf of the
corporation therein and acknowledged to me that such corporation executed the
same.
In Witness Whereof, I have hereunto set my hand and affixed by
official seal the day and year in this certificate first above written.
--------------------------
Notary Public
[Notarial Stamp]
SCHEDULE A
Description of the Land
[Attach Legal Description of all fee parcels]
The Company hereby agrees to furnish to the Securities and Exchange Commission
upon request copies of all of the following Schedules and Exhibits to the Credit
Agreement:
SCHEDULES:
1.1B Lending Offices
1.1C Bridge Facility Term Sheet
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
7.1 Existing Quarterly Results
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Lender Addendum
F Form of Assignment and Acceptance
G Form of Prepayment Option Notice
H Form of Exemption Certificate
