1
EXHIBIT 4.1
EXECUTION COPY
$40,000,000
CREDIT AGREEMENT
Dated as of August 19, 1999
among
COTT CORPORATION,
and
Certain of its U.S. Subsidiaries,
as Borrowers
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
FIRST UNION NATIONAL BANK,
as Administrative Agent
and
NATIONAL BANK OF CANADA,
as Canadian Agent
--------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS CORP.,
AS ARRANGER
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..........................................................1
1.1 General Definitions.....................................................................1
1.2 Accounting Terms.......................................................................30
1.3 Other Definitional Provisions..........................................................30
1.4 Dollar Equivalent Provisions...........................................................31
ARTICLE II THE REVOLVING LOANS.....................................................................31
2.1 The U.S. Revolving Loans...............................................................31
2.2 U.S. Letter of Credit Subfacility......................................................32
2.3 The Canadian Revolving Loans...........................................................37
2.4 Canadian Letter of Credit Subfacility..................................................38
2.5 Bankers' Acceptances...................................................................44
2.6 Minimum Amounts of Loans...............................................................48
2.7 Funding of Loans to Borrowers..........................................................48
2.8 Term...................................................................................54
2.9 Revolving Notes........................................................................54
2.10 Reduction of Revolving Loan Commitments...............................................54
ARTICLE III CASH MANAGEMENT ARRANGEMENTS...........................................................55
3.1 U.S. Lockbox Arrangements..............................................................55
3.2 Canadian Collection and Payment Arrangements...........................................56
3.3 Maintenance of Account.................................................................57
3.4 Statement of Account...................................................................58
ARTICLE IV ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT.............................59
4.1 Continuations and Conversions..........................................................59
4.2 Interest...............................................................................60
4.3 Place and Manner of Payments...........................................................61
4.4 Prepayments............................................................................62
4.5 Fees...................................................................................64
4.6 Pro Rata Treatment.....................................................................65
4.7 Allocation of Payments After Event of Default..........................................66
4.8 Sharing of Payments....................................................................67
4.9 Capital Adequacy.......................................................................68
4.10 Inability To Determine Interest Rate or Create Bankers' Acceptances...................68
4.11 Illegality............................................................................69
4.12 Requirements of Law...................................................................69
4.13 Taxes.................................................................................71
4.14 Compensation..........................................................................73
4.15 Replacement Lender....................................................................74
ARTICLE V CONDITIONS PRECEDENT.....................................................................75
5.1 Closing Conditions.....................................................................75
5.2 Conditions to All Extensions of Credit.................................................79
ARTICLE VI REPRESENTATIONS AND WARRANTIES..........................................................80
6.1 Organization and Good Standing.........................................................80
3
6.2 Due Authorization......................................................................80
6.3 No Conflicts...........................................................................80
6.4 Consents...............................................................................81
6.5 Enforceable Obligations................................................................81
6.6 Financial Condition....................................................................81
6.7 No Default.............................................................................81
6.8 Liens..................................................................................82
6.9 Indebtedness...........................................................................82
6.10 Litigation............................................................................82
6.11 Material Contracts....................................................................82
6.12 Taxes.................................................................................82
6.13 Compliance with Law...................................................................83
6.14 ERISA.................................................................................83
6.15 Subsidiaries..........................................................................85
6.16 Ownership of Stock....................................................................85
6.17 Use of Proceeds; Margin Stock.........................................................85
6.18 Government Regulation.................................................................85
6.19 Hazardous Substances..................................................................85
6.20 Patents, Franchises, etc..............................................................86
6.21 Solvency..............................................................................86
6.22 Location of Assets....................................................................86
6.23 D/B/A or Trade Names..................................................................87
6.24 Year 2000 Compliance..................................................................87
6.25 No Employee Disputes..................................................................87
6.26 Certain Subsidiaries..................................................................87
6.27 Labor Matters.........................................................................88
6.28 Status of Accounts....................................................................88
6.29 Trade Suppliers.......................................................................88
6.30 Key Members of Management.............................................................88
6.31 Accuracy and Completeness of Information..............................................89
ARTICLE VII AFFIRMATIVE COVENANTS..................................................................89
7.1 Information Covenants..................................................................89
7.2 Preservation of Existence and Franchises...............................................92
7.3 Books and Records......................................................................92
7.4 Compliance with Law....................................................................92
7.5 Payment of Taxes and Other Indebtedness................................................92
7.6 Insurance; Casualty Loss...............................................................93
7.7 Maintenance of Property................................................................94
7.8 Performance of Obligations.............................................................94
7.9 ERISA..................................................................................95
7.10 Use of Proceeds.......................................................................95
7.11 Additional Subsidiaries...............................................................96
7.12 Audits/Inspections....................................................................96
7.13 Inventory.............................................................................97
7.14 Collateral Records....................................................................97
7.15 Security Interests....................................................................97
4
7.16 Schedules of Accounts and Purchase Orders............................................ 98
7.17 Collection of Accounts............................................................... 99
7.18 Notice; Credit Memoranda; and Returned Goods......................................... 99
7.19 Acknowledgment Agreements............................................................ 99
7.20 Trademarks...........................................................................100
7.21 Year 2000 Compliance.................................................................100
ARTICLE VIII FINANCIAL COVENANTS..................................................................100
8.1 Leverage Ratio........................................................................100
8.2 Fixed Charge Coverage Ratio...........................................................100
8.3 Capital Expenditures..................................................................100
8.4 Minimum Shareholders' Equity..........................................................101
ARTICLE IX NEGATIVE COVENANTS.....................................................................101
9.1 Indebtedness..........................................................................101
9.2 Liens.................................................................................102
9.3 Nature of Business....................................................................102
9.4 Consolidation or Merger...............................................................102
9.5 Sale or Lease of Assets...............................................................103
9.6 Acquisitions..........................................................................103
9.7 Transactions with Affiliates..........................................................103
9.8 Ownership of Subsidiaries.............................................................103
9.9 Fiscal Year...........................................................................103
9.10 Investments..........................................................................103
9.11 Restricted Payments..................................................................104
9.12 No Additional Bank Accounts..........................................................104
9.13 Amendments of Material Contracts; Organizational Documents...........................104
9.14 Additional Negative Pledges..........................................................105
9.15 Other Indebtedness...................................................................105
9.16 Licenses, Etc........................................................................105
9.17 Limitations..........................................................................105
ARTICLE X POWERS..................................................................................106
10.1 Appointment of Administrative Agent as Attorney-in-Fact..............................106
10.2 Limitation on Exercise of Power......................................................106
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES.........................................................107
11.1 Events of Default....................................................................107
11.2 Acceleration; Remedies...............................................................109
11.3. Conversion and Redenomination Certain Loans; Purchase of Risk Participations.......110
ARTICLE XII TERMINATION...........................................................................111
ARTICLE XIII THE AGENTS...........................................................................111
13.1 Appointment..........................................................................111
13.2 Delegation of Duties.................................................................112
13.3 Exculpatory Provisions...............................................................112
13.4 Reliance on Communications...........................................................112
13.5 Notice of Default....................................................................113
13.6 Non-Reliance on Agents and Other Lenders.............................................113
13.7 Indemnification......................................................................114
13.8 Agent in its Individual Capacity.....................................................114
5
13.9 Successor Agent......................................................................114
13.10 Collateral Matters..................................................................115
ARTICLE XIV MISCELLANEOUS.........................................................................117
14.1 Notices..............................................................................117
14.2 Right of Set-Off.....................................................................117
14.3 Benefit of Agreement.................................................................117
14.4 No Waiver; Remedies Cumulative.......................................................120
14.5 Payment of Expenses; Indemnification.................................................120
14.6 Amendments, Waivers and Consents.....................................................121
14.7 Defaulting Lender....................................................................121
14.8 Counterparts.........................................................................121
14.9 Headings.............................................................................122
14.10 Survival of Indemnification and Representations and Warranties......................122
14.11 Currency............................................................................122
14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE....................................122
14.13 Arbitration.........................................................................123
14.14 Waiver of Jury Trial................................................................124
14.15 Severability........................................................................124
14.16 Loan Entirety.......................................................................125
14.17 Binding Effect; Amendment and Restatement of Existing Credit Agreement;
Further Assurances..................................................................125
14.18 Confidentiality.....................................................................125
14.19 Judgment Currency...................................................................126
14.20 Maximum Rate........................................................................126
14.21 Concerning Joint and Several Liability of the U.S. Borrowers........................127
14.22 Concerning Joint and Several Liability of the Canadian Borrowers....................129
14.23 Nonliability of Agents and Lenders..................................................132
14.24 Independent Nature of Lenders' Rights...............................................132
14.25 Power of Attorney...................................................................132
6
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Guaranty Agreement
Exhibit C Form of Landlord Agreement
Exhibit D Form of Notice of Borrowing/Continuation/Conversion
Exhibit E [Intentionally Omitted]
Exhibit F Form of Revolving Credit Note
Exhibit G Form of Bankers' Acceptance Notice
Exhibit H-1 Form of U.S. Security Agreement
Exhibit H-2 Form of Canadian Security Agreement
Exhibit I-1 Form of Lockbox Agreement
Exhibit I-2 Form of Lockbox Letter
Exhibit J Form of Borrowing Base Certificate
Exhibit K Form of Solvency Certificate
Exhibit L Form of Compliance Certificate
Exhibit M Form of Assignment and Acceptance
Exhibit N Form of Joinder Agreement
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Eligible Inventory Locations
Schedule 1.1C Investments
Schedule 1.1D Liens
Schedule 5.1(n) Corporate Structure
Schedule 6.1 Jurisdictions of Organization
Schedule 6.2 Authorization
Schedule 6.9 Indebtedness
Schedule 6.10 Litigation
Schedule 6.15 Subsidiaries
Schedule 6.19 Hazardous Substances
Schedule 6.22 Collateral Locations
Schedule 6.23 Fictitious Business Names
Schedule 6.26(a) Inactive Subsidiaries
Schedule 6.26(b) Ownership Structure of Cott Beverages UK
Schedule 6.29 Trade Suppliers
Schedule 6.30 Key Members of Management
Schedule 7.6 Insurance
Schedule 9.12 Bank Accounts
Schedule 9.17 Limitations
Schedule 14.1 Addresses for Notices
Schedule of Fiscal Quarters
7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of August 19, 1999, among COTT
CORPORATION, a Canada corporation (the "Company"), its U.S. and Canadian
Subsidiaries identified as Subsidiary Borrowers on the signature pages hereto
and any additional U.S. or Canadian Subsidiaries of the Company which become
parties hereto in accordance with the terms hereof (collectively referred to as
the "Subsidiary Borrowers" or individually referred to as a "Subsidiary
Borrower") (hereinafter, the Company and the Subsidiary Borrowers are
collectively referred to as the "Borrowers" or individually referred to as a
"Borrower"), each of the financial institutions identified as Lenders on
Schedule 1.1A hereto (together with each of their successors and assigns,
referred to individually as a "Lender" and, collectively, as the "Lenders"),
FIRST UNION NATIONAL BANK ("First Union"), acting in the manner and to the
extent described in Article XIII hereof (in such capacity, the "Administrative
Agent") and NATIONAL BANK OF CANADA acting in the manner and to the extent
described in Article XIII hereof (in such capacity, the "Canadian Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a revolving credit facility to
provide for the working capital, letter of credit and general corporate needs of
the Borrowers; and
WHEREAS, upon the terms and subject to the conditions set forth herein, the
Lenders are willing to make loans and advances to the Borrowers;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrowers, the Lenders, the
Administrative Agent and the Canadian Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Acceptance Fee" means, in respect of a particular Bankers' Acceptance
accepted by a Canadian Lender, an amount equal to the product of (a) the
Applicable Percentage for Eurodollar Loans and Bankers' Acceptances as at the
date of acceptance of such Bankers' Acceptance; (b) the aggregate Face Amount of
such Bankers' Acceptance; and (c) a fraction (i) the numerator of which is the
number of days in the term of such Bankers' Acceptance, and (ii) the denominator
of which is the number of days in the then current calendar year.
8
"Accounts" means all of each Credit Party's "accounts" (as defined in the
UCC or the PPSA, as applicable), whether now existing or existing in the future,
and shall include (whether or not otherwise included in such definitions, and
without limiting the generality thereof), all (i) accounts receivable (whether
or not specifically listed on schedules furnished to the Administrative Agent),
including, without limitation, all accounts created by or arising from all of
each Credit Party's sales of goods or rendition of services made under any of
each Credit Party's trade names or styles, or through any of each Credit Party's
divisions; (ii) unpaid seller's rights (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom, (iii) rights to any goods represented by any of the foregoing,
including returned or repossessed goods; (iv) reserves and credit balances held
by each Credit Party with respect to any such accounts receivable or account
debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"Acknowledgment Agreements" means (i) the acknowledgment agreements,
substantially in the form of Exhibit A hereto, between each Credit Party's
warehousemen, fillers, packers, processors and mortgagees and the Administrative
Agent, in each case acknowledging and agreeing, among other things, (A) that
such warehousemen, fillers, packers, processors and mortgagees waive any Liens
on any of the property of any Credit Party and (B) to the collateral assignment
by each Credit Party to the Administrative Agent of each such Credit Party's
interest in the contracts with each of such warehousemen, fillers, packers,
processors and mortgagees and (ii) Landlord Agreements.
"Acquired Company" means any Person (or assets thereof) which is acquired
pursuant to an Acquisition.
"Acquisition" means the acquisition of (a) all of the capital stock of
another Person or (b) all or substantially all of the assets of another Person.
"Adjusted Eurodollar Rate" means the Eurodollar Rate, plus the Applicable
Percentage.
"Administrative Agent" means First Union National Bank, a national banking
association.
"Administrative Agent Fee Letter" means the letter agreement, dated as of
May 12, 1999, among the Company, the Administrative Agent and First Union
Capital Markets Corp., as amended, modified and replaced from time to time.
"Affiliate" of any Person means any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such
Person), controlled by or under direct or indirect common control with such
Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power (a) to vote twenty-five percent
(25%) or more of the securities having ordinary voting power for the election of
directors of such corporation or (b) to direct or cause direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agents" means the Administrative Agent and the Canadian Agent.
2
9
"Applicable BA Discount Rate" means with respect to any Canadian Lender
named on Schedule I to the Bank Act (Canada), as applicable to a Bankers'
Acceptance being purchased by such Lender on any day, the respective percentage
discount rate per annum for a Canadian Dollar bankers' acceptance for the term
and face amount comparable to the term and face amount of such Bankers'
Acceptance that appears on the Reuters Screen CDOR Page as of 10:00 a.m.,
Toronto, Ontario time, on the date of determination as reported by the Canadian
Agent; provided, however, that if on such day no rate appears on the Reuters
Screen CDOR Page as contemplated, the rate for such day shall be the average (as
calculated by the Canadian Agent) of the respective percentage discount rates
(expressed to two decimal places and rounded upward, if necessary, to the
nearest 1/100th of 1%) quoted to the Canadian Agent by each of the five largest
Canadian chartered banks named on Schedule I to the Bank Act (Canada) (each a
"Schedule I Reference Bank") as the percentage discount rate at which such
Schedule I Reference Bank would, in accordance with its normal practices, at or
about 10:00 a.m., Toronto, Ontario time, on such day, be prepared to purchase
bankers' acceptances accepted by such Schedule I Reference Bank having a term
and a face amount comparable to the term and face amount of such Bankers'
Acceptance.
"Applicable Percentage" means for Eurodollar Loans, Base Rate Loans,
Bankers' Acceptances, Letter of Credit Fees and Non-Use Fees, the appropriate
applicable percentages corresponding to the Leverage Ratio in effect as of the
most recent Calculation Date as shown below:
Applicable Percentage Applicable Applicable
Tier Leverage for Eurodollar Loans, Percentage for Base Percentage for
Levels Ratio Bankers' Acceptances Rate Loans Non-Use Fees
and Letter of Credit
Fees
------ ----- -------------------- ---------- ------------
1 > 5.0 to 1.0 2.25% 1.00% 0.50%
2 > 4.0 to 1.0, 2.00% 0.75% 0.50%
but < to 5.0
-
3 > 3.0 to 1.0, 1.75% 0.50% 0.375%
but < 4.0
-
4 < 3.0 to 1.0 1.50% 0.25% 0.375%
-
The Applicable Percentages shall be determined and adjusted quarterly on the
date (each a "Calculation Date") which is five (5) Business Days after the date
on which the Company provides the quarterly officer's certificate for each
fiscal quarter in accordance with the provisions of Section 7.1(c); provided,
however, that (i) the initial Applicable Percentages shall be based on Tier
Level 1 (as shown above) and shall remain at Tier Level 1 until the first
Calculation Date subsequent to June 30, 2000, and, thereafter, the Tier Level
shall be determined by the then current Leverage Ratio, and (ii) if the Company
fails to provide the officer's certificate to the Administrative Agent for any
fiscal quarter as required by and within the time
3
10
limits set forth in Section 7.1(c), the Applicable Percentages from the
applicable date of such failure shall be based on Tier Level 1 until five (5)
Business Days after an appropriate officer's certificate is provided, whereupon
the Tier Level shall be determined by the then current Leverage Ratio. Except as
set forth above, each Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Percentage shall be applicable to all existing Loans and Letters of
Credit as well as any new Loans made or Letters of Credit issued.
"Asset Disposition" means the disposition of any or all of the Accounts or
Inventory of a Credit Party whether by sale, lease, transfer or otherwise, other
than (a) sales of Inventory in the ordinary course of business and (b) transfers
of Accounts or Inventory among the Credit Parties or such other transfers of
Accounts or Inventory to other members of the Consolidated Cott Group if such
transfers are otherwise permitted by this Credit Agreement.
"BA Discount Proceeds" means proceeds in respect of any Bankers' Acceptance
to be purchased on any day under Section 2.5(b), in 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 one plus the product of:
(i) the Applicable BA Discount Rate (expressed as a decimal)
applicable to such Bankers' Acceptance; and
(ii) a fraction, the numerator of which is the number of days in
the term of such Bankers' Acceptance and the denominator of which is
the number of days in the then current calendar year;
with such product being rounded up or down to the fifth decimal place
and .000005 being rounded up to .00001.
"BA Documents" means with respect to any Bankers' Acceptance, such
documents and agreements as the Canadian Lenders accepting the same may require
in connection with the creation of such Bankers' Acceptance.
"BA Obligations" means all obligations of the Canadian Borrowers with
respect to Bankers' Acceptances created under the Canadian Revolving Loan
Commitment.
"Bankers' Acceptance" means a depository xxxx as defined in the Depository
Bills and Notes Act (Canada) in Canadian Dollars that is in the form of an order
signed by the Canadian Borrowers and accepted by a Canadian Lender pursuant to
this Credit Agreement or, for Lenders not participating in clearing services
contemplated in that Act, a draft or xxxx of exchange in Canadian Dollars
payable in Canada that is drawn in Canada by the Canadian Borrowers and accepted
by a
4
11
Canadian Lender pursuant to this Credit Agreement. Orders that become depository
bills, drafts and bills of exchange are sometimes collectively referred to in
this Credit Agreement as "orders".
"Bankruptcy Event" means, with respect to any Person, the occurrence of any
of the following with respect to such Person: (a) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of such Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its property or ordering
the winding up or liquidation of its affairs; or (b) any proceeding shall be
instituted against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property including, but not limited to, an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against a Person and any such proceeding or petition remains unstayed
and in effect for a period of sixty (60) consecutive days; or (c) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or any substantial
part of its property or make any general assignment for the benefit of
creditors; or (d) such Person shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts generally as
they become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.
"Base Rate Loans" means all Loans accruing interest based on the U.S. Base
Rate, the CA U.S. Base Rate or the Canadian Prime Rate.
"BCB" means BCB USA Corp., a Georgia corporation.
"Borrower" means any of the U.S. Borrowers or the Canadian Borrowers.
"Borrowers" means the U.S. Borrowers and the Canadian Borrowers.
"Borrowing Base Certificate" means such term as defined in Section 7.1(h).
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday in Charlotte, North Carolina, New York, New York or Toronto, Ontario or
a day on which banking institutions located in Charlotte, North Carolina, New
York, New York or Toronto, Ontario are authorized by law or other governmental
actions to close; except that in the case of Eurodollar Loans, a Business Day
shall also be a day on which dealings between banks are carried on in U.S.
dollar deposits in the London interbank Eurodollar market.
5
12
"CA U.S. Base Rate" means the higher of (a) the Federal Funds Rate plus
0.5% or (b) the CA U.S. Prime Rate; provided, however, that if, in the
reasonable judgment of the Canadian Agent, the Federal Funds Rate cannot be
determined, then the CA U.S. Prime Rate.
"CA U.S. Base Rate Loans" means Revolving Loans made by the Canadian
Lenders in U.S. Dollars accruing interest based on the CA U.S. Base Rate.
"CA U.S. Prime Rate" means, for any day, the fluctuating rate of interest
per annum publicly announced by the Canadian Agent as its "prime rate" or
"reference rate" for loans made in U.S. dollars, which rate is not necessarily
the best or lowest rate of interest offered for loans in U.S. dollars by the
Canadian Agent.
"Canadian Agent" or "CA" means National Bank of Canada.
"Canadian Base Rate Loans" means, collectively, CA U.S. Base Rate Loans and
Canadian Prime Rate Loans.
"Canadian Borrowers" means the Company and such other Persons organized
under the laws of Canada or any province thereof, and resident in Canada or any
province thereof, that become parties hereto pursuant to Joinder Agreements in
accordance with Section 7.11.
"Canadian Borrowing Base" means a U.S. dollar amount equal to the lesser of
(i) the sum of (a) 80% of the net book Accounts of the Canadian Credit Parties,
plus (b) 50% of the net book Inventory of the Canadian Credit Parties and (ii)
the sum of (A) an amount equal to 85% of Eligible Accounts Receivable of the
Canadian Credit Parties, plus (B) an amount equal to the sum of (1) an amount
equal to 50% of Eligible Inventory of the Canadian Credit Parties consisting of
raw materials (other than packaging raw materials), plus (2) an amount equal to
70% of Eligible Inventory of the Canadian Credit Parties consisting of finished
goods (up to a 120-day supply thereof), minus (iii) reserves established by the
Administrative Agent from time to time in its reasonable discretion.
Notwithstanding the foregoing, the amount of Eligible Inventory based on the
calculations set forth in clause (ii)(B) above shall not exceed 50% of the
aggregate Canadian Borrowing Base.
"Canadian Central Account - Cdn" means Account No. 6127, established and
maintained in the name of the Canadian Agent at its offices located at
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx, Transit No. 00521.
"Canadian Central Account - US" means Account Number 6860, established and
maintained in the name of the Canadian Agent at its offices located at
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx, Transit No. 00521.
"Canadian Central Accounts" means the Canadian Central Account - Cdn. and
the Canadian Central Account - US.
"Canadian Collateral" means any and all assets and rights and interests in
or to property of the Canadian Credit Parties pledged from time to time as
security for the Canadian Obligations
6
13
pursuant to the Security Documents whether now owned or hereafter acquired,
including, without limitation, all of the Accounts and Inventory of the Canadian
Credit Parties, any Chattel Paper, Documents or Instruments evidencing or
relating to such Accounts or Inventory, Deposit Accounts and all Proceeds
thereof, as defined in the Canadian Security Agreement.
"Canadian Credit Parties" means the Canadian Borrowers and all of their
Canadian Subsidiaries whether direct or indirect and whether now owned or
hereafter acquired, excluding 965646 Ontario Ltd., 000000 Xxxxxx Inc., 967979
Ontario Limited, 804340 Ontario Limited, Menu Foods Corporation, 2282214, Inc.,
973974 Ontario Limited and Menu Foods Limited.
"Canadian Dollars" and "C$" mean dollars in the lawful currency of Canada.
"Canadian Lenders" means National Bank of Canada, and such other Lenders
permitted under Canadian law to carry on business in Canada as may be added as
Canadian Lenders in accordance with the terms of this Agreement.
"Canadian Letter of Credit" means a Letter of Credit issued under the
Canadian LOC Subfacility, as referenced in Section 2.4(a).
"Canadian LOC Obligations" means LOC Obligations relating to Canadian
Letters of Credit.
"Canadian LOC Subfacility" means the Letter of Credit subfacility
established pursuant to Section 2.4.
"Canadian Local Account" means such term as defined in Section 3.2.
"Canadian Obligations" means the Obligations of the Canadian Borrowers.
"Canadian Prime Rate" means, for any day, the fluctuating rate of interest
per annum publicly announced by the Canadian Agent as its "prime rate" or
"reference rate" for loans made in Canadian dollars, which rate is not
necessarily the best or lowest rate of interest offered for loans in Canadian
dollars by the Canadian Agent.
"Canadian Prime Rate Loans" means Revolving Loans made by the Canadian
Lenders in Canadian Dollars accruing interest based on the Canadian Prime Rate.
"Canadian Revolving Loan Commitment" means $10,000,000 (U.S.), or its
equivalent as determined from time to time in Canadian Dollars, as such amount
may be reduced in accordance with Section 2.10, minus, to the extent that the
U.S. Borrowers have borrowed U.S. Revolving Loans in excess of $30,000,000 under
the U.S. Revolving Loan Commitment then in effect, an amount equal to such
excess.
"Canadian Revolving Loan Commitment Percentage" means, for each Canadian
Lender, the percentage identified as its Canadian Revolving Loan Commitment
Percentage opposite such
7
14
Canadian Lender's name on Schedule 1.1A as such percentage may be modified by
assignment in accordance with the terms of this Agreement.
"Canadian Revolving Loans" means the revolving loans made by the Canadian
Lenders to the Canadian Borrowers pursuant to Section 2.3.
"Canadian Security Agreement" means the Security Agreement, of even date
herewith, among the Canadian Agent, the Administrative Agent and the Canadian
Credit Parties, in the form attached hereto as Exhibit H-2.
"Canadian Unutilized Revolving Commitment" means, for any period, the
amount by which (a) the then applicable Canadian Revolving Loan Commitment
exceeds (b) the daily average sum for such period of the outstanding aggregate
principal amount of all Canadian Revolving Loans, Canadian LOC Obligations and
BA Obligations.
"Capital Expenditures" means any current expenditure by the Consolidated
Cott Group for fixed or capital assets as reflected on the financial statements
of the Consolidated Cott Group, as prepared in accordance with U.S. GAAP.
"Capital Stock" means (i) in the case of a corporation, capital stock, (ii)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other equity interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued directly or fully guaranteed
or insured by the United States of America or Canada or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America or Canada is pledged in support thereof) having maturities of
not more than one year from the date of acquisition, (b) U.S. or Canadian dollar
denominated time deposits and certificates of deposit of (i) any U.S. or
Canadian commercial bank of recognized standing having capital and surplus in
excess of $100,000,000 or (ii) any bank whose short-term commercial paper rating
from Standard & Poor's Corporation ("S&P") is at least A-1 or the equivalent
thereof or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at least P-1 or
the equivalent thereof (any such bank being an "Approved Bank"), in each case
with maturities of not more than one year from the date of acquisition, (c)
Bankers' Acceptances accepted by any Approved Bank, (d) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
U.S. or Canadian corporation to the extent that such paper or notes are rated
A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within one year of the date of
acquisition and (e) repurchase agreements with a bank or trust company or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America or Canada in which a Credit Party shall have a perfected first
priority security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations.
8
15
"Cash Taxes" means, for any applicable period of computation, the aggregate
of all taxes of the Consolidated Cott Group determined in accordance with
applicable law and U.S. GAAP applied on a consistent basis, to the extent the
same are paid in cash during such period.
"Casualty Loss" means such term as defined in Section 7.6.
"Change of Control" means the occurrence of any of the following events:
(a) the acquisition, directly or indirectly, whether voluntarily or by operation
of law, by any person (as such term in used in Section 13(d) of the Exchange
Act) of (i) beneficial ownership of a sufficient portion of the voting power of
the outstanding Voting Stock of the Company to elect a majority of the Board of
Directors of the Company (the "Board") (either immediately or upon the
expiration of their respective current terms) pursuant to a transaction that is
not approved by such Board as constituted immediately prior to the consummation
of such transaction or (ii) all or substantially all of the assets of the
Company or (b) the failure of the Company to own, directly or indirectly, 100%
of the outstanding shares of Capital Stock of the other Credit Parties.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" means collectively, the U.S. Collateral and the Canadian
Collateral.
"Commitments" means the U.S. Revolving Loan Commitment and the Canadian
Revolving Loan Commitment.
"Commitment Percentage" means, with respect to any Lender, at any time
after the Commitments have terminated, the percentage which such Lender's Credit
Exposure constitutes of the aggregate principal amount of all Loans, LOC
Obligations and BA Obligations then outstanding under this Credit Agreement.
"Commitment Termination Event" means such term as defined in Section 11.3.
"Company" has the meaning set forth in the introductory paragraph hereof.
"Consolidated Cott Group" means the Company and all of its consolidated
Subsidiaries whether direct or indirect and whether now owned or hereafter
acquired.
"Conversion Date" means such term as defined in Section 11.3.
"Cott Beverages UK" means Cott Beverages Limited, an English limited
liability company.
9
16
"Cott Beverages USA" means Cott Beverages USA, Inc., a Georgia corporation.
"Cott USA" means Cott USA Corp., a Georgia corporation.
"Credit Agreement" or "Agreement" means this credit agreement, dated as of
the date hereof, as the same may be modified, amended, extended, restated or
supplemented from time to time.
"Credit Documents" means this Credit Agreement, the Revolving Credit Notes,
the LOC Documents, the BA Documents, the Guaranty Agreements, the Security
Documents, the Subordination Agreement and all other documents and instruments
executed or delivered in connection therewith, as the same may be modified,
amended, extended, restated or supplemented from time to time.
"Credit Exposure" means such term as defined in the definition of Required
Lenders.
"Credit Parties" means, collectively, the U.S. Credit Parties and the
Canadian Credit Parties.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time, (a)
has failed to make a Loan or purchase a Participation Interest required pursuant
to the terms of this Agreement, (b) has failed to pay to the Administrative
Agent, the Canadian Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Agreement or (c) has become insolvent or has become subject
to a receiver, trustee or similar official.
"DOL" means the U.S. Department of Labor and any successor department or
agency.
"EBITDA" means, for any applicable period of computation, the sum of (i)
Net Income for such period, but excluding therefrom all extraordinary items of
income or loss, plus (ii) the aggregate amount of depreciation and amortization
charges made in calculating Net Income for such period, plus (iii) aggregate
Interest Expense for such period, plus (iv) the aggregate amount of all income
taxes reflected on the consolidated statements of income of the Consolidated
Cott Group for such period. The applicable period of computation, as of each
fiscal quarter end, shall be for the four (4) consecutive quarters ending as of
the date of determination, except that (a) for the fiscal quarter ending July 3,
1999, EBITDA shall be calculated for the two (2) consecutive fiscal quarters
then ending multiplied by two (2) and for the fiscal quarter ending October 2,
1999, EBITDA shall be calculated for the three (3) consecutive fiscal quarters
then ending multiplied by four thirds (4/3rds).
"Effective Date" means the date on which all of the conditions set forth in
Section 5.1 have been fulfilled or waived by the Lenders.
"Eligible Accounts Receivable" means the aggregate face amount of the
Credit Parties' Accounts that conform to the warranties contained herein, less
the aggregate amount of all
10
17
returns, discounts, claims, credits, charges (including warehousemen's charges)
and allowances of any nature (whether issued, owing, granted or outstanding),
and less the aggregate amount of all reserves for slow paying accounts, foreign
sales, xxxx and hold (or deferred shipment) transactions and the Lenders'
charges as set forth in this Credit Agreement. Unless otherwise approved in
writing by the Administrative Agent, no Account, without duplication, shall be
deemed to be an Eligible Account Receivable if:
(i) it arises out of a sale made by any Credit Party to an Affiliate;
or
(ii) the Account is unpaid more than ninety (90) days after the
original invoice date or more than sixty (60) days after the original
payment due date; or
(iii) such Account is from the same account debtor (or any affiliate
thereof) and fifty percent (50%) or more, in face amount, of all Accounts
from such account debtor (or any affiliate thereof) are due or unpaid more
than ninety (90) days after the original invoice date or sixty (60) days
after the original payment due date; or
(iv) (A) the account debtor is also a creditor of any Credit Party, to
the extent of the amount owed by such Credit Party to the account debtor,
(B) the account debtor has disputed its liability on, or the account debtor
has made any claim with respect to, such Account due from such account
debtor to such Credit Party, which has not been resolved or (C) the Account
otherwise is subject to any right of setoff by the account debtor, to the
extent of the amount of such setoff; or
(v) the Account is owing by an account debtor that has commenced a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of creditors, or
if a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to such account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or if any other petition or other application for relief
under the federal bankruptcy laws has been filed by or against the account
debtor, or if such account debtor has failed, suspended business, ceased to
be solvent, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs; or
(vi) the sale is to an account debtor outside the continental United
States or Canada, unless the sale is (A) on letter of credit, guaranty or
acceptance terms, or subject to credit insurance, in each case acceptable
to the Administrative Agent in its reasonable discretion (such Accounts
supported by guaranty or acceptance terms or credit insurance not to exceed
more than $5,000,000 of aggregate Eligible Accounts Receivable), or (B)
otherwise approved by and acceptable to the Administrative Agent in its
reasonable discretion; or
(vii) the sale to the account debtor is on a xxxx-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for repurchase or return;
or
11
18
(viii) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable Credit
Party duly assigns its rights to payment of such Account to the
Administrative Agent pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq.); or
(ix) the account debtor is the government of Canada or any department,
agency or instrumentality thereof to which Part VII of the Financial
Administration Act (Canada) applies, or the government of a province or
territory of Canada (or any department, agency or instrumentality thereof)
in which legislation is in force which limits or restricts the assignment
of Crown debts, unless the applicable Borrower has complied with the
provisions of such Part (or such legislation, as the case may be) in
respect of the assignment of such Account to the Administrative Agent; or
(x) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or its designee or the
services giving rise to such Account have not been performed by or on
behalf of the applicable Credit Party and accepted by the account debtor or
its designee or the Account otherwise does not represent a final sale; or
(xi) the Administrative Agent does not have a first priority,
perfected security interest in the Account.
"Eligible Assignee" means (a) any Lender or Affiliate or subsidiary of a
Lender and (b) any other commercial bank, financial institution, institutional
lender or "accredited investor" (as defined in Regulation D of the Securities
and Exchange Commission) with a net worth of at least $2,000,000,000.
"Eligible Inventory" means (i) the aggregate gross amount of each Credit
Party's Inventory, valued at the lower of cost (on a FIFO basis) or market,
which (A) is owned solely by such Credit Party and with respect to which such
Credit Party has good, valid and marketable title, (B) is stored on property
that is either (1) owned or leased by such Credit Party or (2) owned or leased
by a warehouseman that has contracted with such Credit Party to store Inventory
on such warehouseman's property or by a filler, processor or packer of such
Credit Party (provided that, with respect to Inventory stored on property leased
by such Credit Party at the locations set forth on Schedule 1.1B hereto, such
Credit Party shall have delivered in favor of the Administrative Agent, on or
prior to the Closing Date or within ninety (90) days following the Closing Date
(as noted in such Schedule), an Acknowledgment Agreement from the landlord of
such leased location, and, with respect to Inventory stored on property owned or
leased by a warehouseman, filler, processor or packer at the locations set forth
on Schedule 1.1B hereto, such Credit Party shall have delivered to the
Administrative Agent, on or prior to the Closing Date or within ninety (90) days
following the Closing Date (as noted in such Schedule), an Acknowledgment
Agreement executed by such warehouseman, filler, processor or packer); (C) is
subject to a valid, enforceable and first priority Lien in favor of the
Administrative Agent, except, with respect to Inventory stored at sites
described in clause (B)(2) above for normal and customary warehouseman, filler,
packer and processor charges); (D) is located in the United
12
19
States or Canada; and (E) is not obsolete or slow moving, and which otherwise
conforms to the warranties contained herein, less (ii) markdown reserves, less
(iii) any goods returned or rejected by such Credit Party's customers for which
a credit has not yet been issued and goods in transit to third parties (other
than to such Credit Party's agents, warehouses, fillers, processors or packers
that comply with clause (i)(B)(2) above), less (iv) damaged Inventory, less (v)
any Inventory that is a no charge or sample item, less (vi) packaging supplies,
including but not limited to returnable or reuseable containers, less (vii) a
reserve equal to the amount of all accounts payable of such Credit Party owed or
owing to any filler, packer or processor of such Credit Party, less (viii) any
reserves required by the Administrative Agent in its reasonable discretion for
special order goods and market value declines, and less (ix) any Inventory which
is held by a Credit Party pursuant to consignment, sale or return, sale on
approval or similar arrangement.
"Environmental Laws" means any current or future Requirement of Law of any
Governmental Authority applicable to the Credit Parties pertaining to (a) the
protection of health, safety, and the environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection or use
of surface water and groundwater or (d) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling of, or
exposure to, any hazardous or toxic substance or material and includes, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and
Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq.,
Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances Control
Act of 1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act, 49 USC
App. 1801 et seq., Occupational Safety and Health Act of 1970, as amended, 29
USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act
of 1974, as amended, 42 USC 300(f) et seq., Ontario Water Resources Act,
Canadian Environmental Protection Act, any analogous implementing or successor
law, and any amendment, rule, regulation, order, or directive issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated, which is
under common control with the U.S. Borrowers within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the U.S.
Borrowers and which is treated as a single employer under Sections 414(b) or (c)
of the Code.
"ERISA Event" means (a) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (b) the
13
20
withdrawal of the U.S. Borrowers or any ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (c) the distribution of a notice of intent to terminate or the
actual termination of a Single Employer Plan or Multi-Employer Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to
terminate or the actual termination of a Single Employer Plan or a Multiemployer
Plan by the PBGC under Section 4042 of ERISA; (e) the termination of, or the
appointment of a trustee to administer, any Single Employer Plan or
Multiemployer Plan pursuant to Section 4042 of ERISA; (f) the complete or
partial withdrawal of the U.S. Borrowers or any ERISA Affiliate from a
Multiemployer Plan; (g) the conditions for imposition of a Lien under Section
302(f) of ERISA exist with respect to any Single Employer Plan; or (h) the
adoption of an amendment to any Single Employer Plan requiring the application
of Section 307 of ERISA.
"Eurodollar Loans" means Loans accruing interest at the Adjusted Eurodollar
Rate. All Eurodollar Loans shall be made in U.S. dollars.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including continuations and conversions),
a per annum interest rate determined pursuant to the following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not a Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" means such terms as defined in Section 11.1.
"Face Amount" means, in respect of a Bankers' Acceptance, the amount
payable to the holder thereof at maturity.
"Federal Funds Rate" means, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve Bank
of New York, or if such rate is not released on any Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by the
Administrative Agent, of the quotations for the day of such
14
21
transactions, received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Statements" means such term as defined in Section 6.6.
"First Union" means First Union National Bank, having its principal office
in North Carolina, and its successors and permitted assigns.
"First Union Account" means the internal First Union concentration account
into which funds transferred from the First Union Cash Collateral Accounts will
be deposited and applied to the Obligations, established and maintained in the
name of the Administrative Agent at First Union.
"First Union Cash Collateral Accounts" means each of Cash Collateral
Account No. 2000007396304 and Cash Collateral Account No. 2000007396317,
established and maintained in the name of the U.S. Borrowers at First Union,
with the Administrative Agent named as secured party thereon.
"First Union Funding Account" means Fund Account No. 2080000070582,
established and maintained in the name of the U.S. Borrowers at First Union,
with the Administrative Agent named as secured party thereon.
"Fixed Charge Coverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of (i) EBITDA less Unfinanced Capital Expenditures to (ii)
total Fixed Charges. Except as otherwise provided herein, the applicable period
of computation shall be for the four (4) consecutive quarters ending as of the
date of determination.
"Fixed Charges" means, for any applicable period of computation, without
duplication, the sum of (i) all cash Interest Expense for the applicable period
plus (ii) all Cash Taxes paid during the applicable period plus (iii) cash
dividends paid by the Company for the period of four consecutive fiscal quarters
ending on such day plus (iv) all scheduled principal payments on long term
Funded Debt of the Consolidated Cott Group for the period of four consecutive
fiscal quarters beginning on such day (excluding optional prepayments on the
Senior Notes). The applicable period of computation shall be for the four (4)
consecutive quarters ending as of the date of determination, except that (a) for
the fiscal quarter ending July 3, 1999, the applicable period of computation
shall be for the two (2) consecutive fiscal quarters then ending and for the
fiscal quarter ending October 2, 1999, the applicable period of computation
shall be for the three (3) consecutive fiscal quarters then ending.
"Funded Debt" means, without duplication, the sum of (a) all Indebtedness
of the Consolidated Cott Group for borrowed money (other than purchase money
Indebtedness (as distinguished from capital lease obligations) incurred in
accordance with the terms of Section 9.1), (b) the principal portion of all
obligations of the Consolidated Cott Group under capital leases (including
capital leases incurred in accordance with the terms of Section 9.1), (c) all
commercial letters of credit and the maximum or face amount of all performance
and standby letters of credit issued or bankers' acceptance facilities created
for the account of a member of the Consolidated
15
22
Cott Group, including, without duplication, all unreimbursed draws thereunder,
(d) all Guaranty Obligations of the Consolidated Cott Group with respect to
Funded Debt of another Person, (e) all Funded Debt of another entity secured by
a Lien on any property of the Consolidated Cott Group, to the extent of the book
value of the property secured thereby, whether or not such Funded Debt has been
assumed by a member of the Consolidated Cott Group, (f) all Funded Debt of any
partnership or unincorporated joint venture to the extent a member of the
Consolidated Cott Group is legally obligated or has a reasonable expectation of
being liable with respect thereto, net of any assets of such partnership or
joint venture and (g) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product of a member of the Consolidated Cott Group
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with U.S. GAAP.
The $25,000,000 letter of credit issued in favor of First Union for the account
of Cott Beverages USA shall, to the extent terminated and/or reduced on or prior
to the Closing Date, be excluded from the calculation of Funded Debt
"Government Acts" means such term as defined in Section 2.2(k)(i).
"Governmental Authority" means any Federal, State, Provincial, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantor" means any U.S. Credit Party.
"Guaranty Agreements" means the Guaranty Agreement in the form attached
hereto as Exhibit B executed by the U.S. Borrowers with respect to the
obligations of the Canadian Borrowers and any future Guaranty Agreement executed
in accordance with the terms of this Agreement, as each such Guaranty Agreement
may be amended, modified or replaced from time to time.
"Guaranty Obligations" of any Person means any obligations (other than (a)
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection, (b) obligations arising under the Guaranty Agreements and
(c) obligations arising under guaranties by a Credit Party of another Credit
Party) guaranteeing or intended to guarantee any Indebtedness, leases, dividends
or other obligations of any other Person in any manner, whether direct or
indirect, and including, without limitation, any obligation, whether or not
contingent to, (i) purchase any such Indebtedness or other obligation or any
property constituting security therefor, (ii) advance or provide funds or other
support for the payment or purchase of such indebtedness or obligation or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements), (iii) lease
or purchase property, securities or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation, or (iv) otherwise assure
or hold harmless the owner of such Indebtedness or obligation against loss in
respect thereof.
"Hedging Agreements" means any Interest Rate Protection Agreement or other
interest rate protection agreement, foreign currency exchange agreement,
commodity purchase or option agreement or other interest or exchange rate or
commodity price hedging agreements
16
23
"Highest Lawful Rate" means, at any given time during which any Obligations
shall be outstanding hereunder, the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness under this Credit Agreement, under the
laws of the State of North Carolina (or the law of any other jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Credit Agreement and the other Credit Documents), or under applicable United
States or Canadian federal laws which may presently or hereafter be in effect
and which allow a higher maximum nonusurious interest rate than under North
Carolina or such other jurisdiction's law, in any case after taking into
account, to the extent permitted by applicable law, any and all relevant
payments or charges under this Credit Agreement and any other Credit Documents
executed in connection herewith, and any available exemptions, exceptions and
exclusions. Without limiting the generality of the foregoing, in relation to any
amount payable hereunder by any Canadian Borrower or to any Canadian Lender,
"Highest Lawful Rate" shall mean a rate of "interest" on the "credit advanced",
calculated in accordance with the definition of "criminal rate" (all such terms
being used herein as defined by section 347 of the Criminal Code of Canada or
any successor provision in force at the relevant time) equal to 59%.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person with respect to Funded Debt, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person to the extent of the value of such property
(other than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all obligations,
including without limitation intercompany items, of such Person issued or
assumed as the deferred purchase price of property or services purchased by such
Person which would appear as liabilities on a balance sheet of such Person, (e)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of Property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(f) all Guaranty Obligations of such Person, (g) the principal portion of all
obligations of such Person under (i) capital leases and (ii) any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with U.S. GAAP, (h) all payment obligations of such Person
in respect of Hedging Agreements, (i) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date, in cash or other property (other than shares of common
stock or the same class of preferred stock), (k) all other obligations which
would be shown as a liability on the balance sheet of such Person and (l) the
aggregate purchase price paid by third parties for the purchase of the accounts
receivable of such Person subject at such time to a sale of receivables (or
similar transaction) regardless of whether such transaction is effected without
recourse to such Person or in a manner that would not be reflected on the
balance sheet of such Person in accordance with U.S. GAAP. The Indebtedness of
any Person shall include the Indebtedness of any partnership or unincorporated
joint venture but
17
24
only to the extent such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto; provided, however,
Indebtedness shall not include (i) any accumulated provisions for deferred taxes
or deferred credits reflected as a liability on the balance sheet of such
Person, or (ii) any Indebtedness in respect of which moneys sufficient to pay
and discharge the same in full (either on the expressed date of maturity thereof
or on such earlier date as such indebtedness may be duly called for redemption
and payment) have been deposited with a depository, agency or trustee in trust
for the payment thereof.
"Interest Expense" means, for any period, all interest expense of the
Consolidated Cott Group for such period, net of interest income for such period,
all as determined in accordance with U.S. GAAP.
"Interest Payment Date" means (a) as to all Loans, other than Eurodollar
Loans, the last day of each month and (b) as to Eurodollar Loans, the last day
of each applicable Interest Period; provided, that if an Interest Payment Date
falls on a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case of an
Interest Period where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day.
"Interest Period" means, with respect to Eurodollar Loans, a period of one,
two, three or six month's duration, as the Borrowers may elect from time to
time, commencing, in each case, on the date of the borrowing (or continuation or
conversions thereof); provided, however, (a) if any Interest Period would end on
a day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond the Maturity Date and (c) where
an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to end,
such Interest Period shall end on the last Business Day of such calendar month.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity purchase or option
agreement or other interest or exchange rate or commodity price hedging
agreements or any other derivative product hedging arrangement between any
Borrower and any Lender, or any affiliate of a Lender.
"Inventory" means all of each Credit Party's inventory, including without
limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Credit Parties'
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale; and (iii) all goods returned to or repossessed by the Credit Parties.
"Investment" means, with respect to any Person, (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness or securities
or otherwise) of assets comprising a business, shares of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of another Person, (b) any deposit with, or advance, loan or other extension of
credit to, such other Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of business) or (c)
any other investment in such other Person, including without limitation, any
Guaranty Obligation for the benefit of such other Person.
18
25
"Irish Affiliate" means Cott International Financial.
"Issuing Lender" means (i) as to the U.S. LOC Subfacility, First Union and
(ii) as to the Canadian LOC Subfacility, National Bank of Canada.
"Issuing Lender Fee" means such term as defined in Section 4.5.
"Joinder Agreement" means the form of Joinder Agreement to be executed by
each new Borrower under the Credit Agreement pursuant to Section 7.11 hereof,
substantially in the form of Exhibit N hereto.
"Landlord Agreement" means a Landlord Lien Waiver Agreement, substantially
in the form of Exhibit C hereto, between a Credit Party's landlord and the
Administrative Agent acknowledging and agreeing, among other things, (i) that
such landlord waives any Liens on any of the property of such Credit Party and
(ii) to permit the Administrative Agent access to the property for the purposes
of exercising its remedies under the applicable Security Agreement.
"Lenders" means U.S. Lenders and Canadian Lenders.
"Leverage Ratio" means, as of the last day of any fiscal quarter, the ratio
of (a) total Funded Debt of the Consolidated Cott Group, as determined in
accordance with U.S. GAAP, to (b) EBITDA. Except as otherwise provided herein
(including, without limitation, in the definition of EBITDA), the applicable
period of computation shall be for the four (4) consecutive quarters ending as
of the date of determination.
"Letter of Credit" means (a) a Letter of Credit issued for the account of a
U.S. Borrower or one of its U.S. Subsidiaries by the Issuing Lender pursuant to
Section 2.2, as such Letter of Credit may be amended, modified, extended,
renewed or replaced and (b) a Letter of Credit issued for the account of a
Canadian Borrower or one of its Canadian Subsidiaries by the Issuing Lender
pursuant to Section 2.4 as such Letter of Credit may be amended, modified,
extended, renewed or replaced.
"Letter of Credit Fee" means such term as defined in Section 4.5.
"Lien" means any mortgage, pledge, hypothecation, collateral assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority, or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement filed under the Uniform Commercial
Code as adopted and in effect in the relevant jurisdiction, the PPSA, or other
similar recording or notice statute, and any lease in the nature thereof).
"Loans" means the Revolving Loans.
"LOC Documents" means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered thereunder, and any
other agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of
19
26
Credit) governing or providing for (a) the rights and obligations of the parties
concerned or at risk or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under all
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Lockbox Agreement" means such term as defined in Section 3.1.
"London Interbank Offered Rate" means, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
"Material Adverse Effect" means a material adverse effect, after taking
into account any applicable insurance (to the extent the provider of such
insurance has the financial ability to support its obligations with respect
thereto and is not disputing or refusing to acknowledge same), on (a) the
business, assets, operations or condition (financial or otherwise) of the
Consolidated Cott Group, taken as a whole, (b) the ability of (i) the U.S.
Borrowers to perform their material obligations under this Credit Agreement or
any of the other Credit Documents, (ii) the Canadian Borrowers to perform their
material obligations under this Credit Agreement or any of the other Credit
Documents, or (iii) the Credit Parties, taken as a whole, to perform their
material obligations under this Agreement or any of the other Credit Documents,
(c) the Collateral or (d) the validity or enforceability of this Agreement, any
of the other Credit Documents, or the rights and remedies of the Lenders
hereunder or thereunder taken as a whole.
"Material Contract" means any contract or other arrangement (other than any
of the Leases or the Credit Documents), whether written or oral, to which any
Credit Party is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
"Maturity Date" means August 19, 2002.
20
27
"Merchandise Returns" means any of the products manufactured and sold by
the Credit Parties that are returned.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan)
which the U.S. Borrowers or any ERISA Affiliate and at least one other employer
other than any U.S. Borrower or any ERISA Affiliate are contributing sponsors.
"Net Income" means, for any period, the net income after taxes of the
Consolidated Cott Group for such period, as determined in accordance with U.S.
GAAP.
"Net Proceeds" means all cash proceeds received in connection with an Asset
Disposition, net of (a) the actual cash costs incurred in connection with and
attributable to such Asset Disposition, (b) any tax liability attributable to
such transaction and (c) amounts applied to repayment of Indebtedness (other
than the Obligations) secured by a Permitted Lien on a disposed asset.
"Non-Use Fees" means such term as defined in Section 4.5.
"Notes" means the Revolving Credit Notes.
"Notice of Borrowing" means the request by a Borrower for a Revolving Loan
in the form of Exhibit D.
"Notice of Continuation/Conversion" means a request by (a) the U.S.
Borrowers to (i) continue an existing Eurodollar Loan, (ii) convert a U.S. Base
Rate Loan to a Eurodollar Loan, or (iii) convert a Eurodollar Loan to a U.S.
Base Rate Loan or (b) the Canadian Borrowers to (i) continue a maturing Bankers'
Acceptance to a new maturity date, (ii) convert a maturing Bankers' Acceptance
to a Canadian Prime Rate Loan, (iii) convert a Canadian Prime Rate Loan to a
Bankers' Acceptance, (iv) continue an existing Eurodollar Loan, (v) convert a CA
U.S. Base Rate Loan to a Eurodollar Loan or (vi) convert a Eurodollar Loan to a
CA U.S. Base Rate Loan, in the form of Exhibit D.
"Obligations" means the Loans, any other loans and advances or extensions
of credit made or to be made by any Lender to any Borrower, or to others for any
Borrower's account in each case pursuant to the terms and provisions of this
Credit Agreement, together with interest thereon (including interest which would
be payable as post-petition interest in connection with any bankruptcy or
similar proceeding) and, including, without limitation, any reimbursement
obligation or indemnity of the Borrowers on account of Letters of Credit and all
other LOC Obligations, all BA Obligations, and all indebtedness, fees,
liabilities, guarantees and obligations which may at any time be owing by any
Borrower or any other Credit Party to any Lender in each case pursuant to this
Credit Agreement or any other Credit Document, whether now in existence or
incurred by a Borrower or any other Credit Party from time to time hereafter,
whether unsecured or secured by pledge, Lien upon or security interest in any of
a Borrower's or other
21
28
Credit Party's assets or property or the assets or property of any other Person,
whether such indebtedness is absolute or contingent, joint or several, matured
or unmatured, direct or indirect and whether such Borrower or other Credit Party
is liable to such Lender for such indebtedness as principal, surety, endorser,
guarantor or otherwise. Obligations shall also include any other indebtedness
owing to any Lender by any Borrower or other Credit Party under this Credit
Agreement and the other Credit Documents, any Borrower's liability to any Lender
pursuant to this Credit Agreement as maker or endorser of any promissory note or
other instrument for the payment of money, any Borrower's or other Credit
Party's liability to any Lender pursuant to this Credit Agreement or any other
Credit Document under any instrument of guaranty or indemnity, or arising under
any guaranty, endorsement or undertaking which any Lender may make or issue to
others for any such Borrower's account pursuant to this Credit Agreement,
including any accommodation extended with respect to applications for Letters of
Credit, and all liabilities and obligations owing from any Borrower to any
Lender, or any affiliate of a Lender, arising under Interest Rate Protection
Agreements entered into for the purpose of hedging interest rate risk under this
Credit Agreement and the other Credit Documents.
"Participation Interest" means a participation in Letters of Credit or LOC
Obligations purchased pursuant to Section 2.2 or Section 2.4 or in Loans or BA
Obligations purchased pursuant to Section 4.6 or Section 11.3.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, and any successor thereof.
"Permitted Acquisition" means an Acquisition by any Credit Party that
(a)(i) has been consented to by the Administrative Agent and (ii) is not
financed with all or any part of the proceeds of any Loan or Bankers' Acceptance
made under this Credit Agreement or (b) complies with the following
requirements:
(i) the Acquired Company shall be (or shall own, directly or
indirectly, all of the Capital Stock of) an operating company that engages
in a line of business substantially similar to the line of business of the
Credit Parties engaged in on the Closing Date;
(ii) no Default or Event of Default shall exist immediately prior to
or after the consummation of the Acquisition;
(iii) immediately after giving effect to the Acquisition, at least
$5,000,000 shall be available to be loaned to the Borrowers under the
Commitments and the Total Borrowing Base;
(iv) the purchase price for any Acquired Company acquired during any
fiscal year, together with all other Acquisitions made pursuant to this
clause (b) in such fiscal year, shall not exceed $10,000,000 in the
aggregate; and
(v) the aggregate purchase price of all Acquisitions made pursuant to
this clause (b) in any fiscal year, together with all Capital Expenditures
made in such fiscal year, shall not exceed the Capital Expenditures limit
for such fiscal year set forth in Section 8.3
22
29
"Permitted Investments" means:
(a) cash and Cash Equivalents;
(b) money market investment programs that invest exclusively in Cash
Equivalents and that are classified as a current asset in accordance with
U.S. GAAP and that are administered by broker-dealers reasonably acceptable
to the Administrative Agent;
(c) Investments of a Credit Party into another Credit Party;
(d) loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses incidental to carrying on
the business of the Credit Parties, including, without, limitation,
relocation and other reasonable expenses associated with employee
compensation and perquisites;
(e) accounts receivable arising from the sale of goods and services in
the ordinary course of business of the Credit Parties;
(f) stock or securities received in settlement of debts (created in
the ordinary course of business) owing to a Credit Party;
(g) Investments existing on the Closing Date and set forth on Schedule
1.1C attached hereto;
(h) (i) in addition to loans to Cott Beverages UK existing as of the
Closing Date, on and after the Closing Date share capital investments and
loans up to $20,000,000 in the aggregate to Cott Beverages UK and (ii) in
addition to the share capital investments and loans described in the
immediately preceding clause (i), share capital investments and loans up to
$17,000,000 in the aggregate to the Cott Beverages UK made from the
proceeds of the sale of the Company's stock in Menu Foods Limited so long
as the proceeds of any such share capital investments and loans are applied
to repay outstanding indebtedness of Cott Beverages UK;
(i) loans to officers and employees of the Company to purchase the
Capital Stock of the Company in an amount up to $2,000,000 in the aggregate
at any time outstanding;
(j) transactions permitted pursuant to Sections 9.6 and 9.10;
(k) promissory notes issued as consideration in connection with asset
sales permitted hereunder; and
(l) such other Investments as the Administrative Agent may approve in
its reasonable discretion.
23
30
"Permitted Liens" means:
(a) Liens in favor of the Lenders pursuant to any Credit Document or
any Interest Rate Protection Agreement;
(b) Liens for taxes not yet due or Liens for taxes being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with U.S. GAAP have been established;
(c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmen's, mechanics',
warehousemen's, supplier's or vendor's and other like Liens provided that
such Liens secure only amounts not yet due and payable or if overdue are
being contested in good faith by appropriate actions or proceedings and
adequate reserves have been established;
(d) pledges or deposits made to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs;
(e) Liens arising from good faith deposits in connection with or to
secure performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of
business (other than obligations in respect of the payment of borrowed
money);
(f) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not impairing, in any material respect, the use of
such property for its intended purposes or interfering, in any material
respect, with the ordinary conduct of business of the Credit Parties;
(g) Liens securing purchase money indebtedness (it being understood
for the purposes of this Agreement that conditional sales contracts shall
constitute purchase money indebtedness) permitted by Section 9.1(d);
(h) Liens existing on property or assets of any Credit Party
as of the date of this Agreement and disclosed on Schedule 1.1D;
provided that the Liens set forth on Schedule 1.1D shall not extend to
or secure any Indebtedness other than any such Indebtedness outstanding
on the date hereof;
(i) financing statements filed in connection with operating leases
made in the ordinary course of business; and
(j) judgments and other similar Liens arising in connection with court
proceedings to the extent such judgments do not constitute Events of
Default; provided the execution or other enforcement of such Lien is
effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings.
24
31
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the U.S. Borrowers or
any ERISA Affiliate is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"PPSA" means the Personal Property Security Act in effect from time to time
in Ontario, Canada (or such other analogous statute in effect from time to time
in any other province of Canada, as applicable).
"Regulation U or X" means Regulation U or X, respectively, of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitute at least 51% of the aggregate Credit Exposure of
all Lenders at such time; provided, however, that Required Lenders shall be
comprised of at least two (2) Lenders and provided, further, that if any Lender
shall be a Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders at such time the aggregate principal amount of
Credit Exposure of such Lender at such time. For purposes of the preceding
sentence, the term "Credit Exposure" as applied to each Lender shall mean (a) at
any time prior to the termination of the Commitments, the sum of (i) the U.S.
Revolving Loan Commitment Percentage of such Lender multiplied times the U.S.
Revolving Loan Commitments, plus (ii) the Canadian Revolving Loan Commitment
Percentage of such Lender multiplied times the Canadian Revolving Loan
Commitments, and (b) at any time after the termination of the Commitments, the
sum of (i) the principal balance of outstanding Revolving Loans of such Lender,
plus (ii) the Face Amount of all Bankers' Acceptances created by such Lender
plus (iii) such Lender's Participation Interests in the face amount of
outstanding Letters of Credit. In determining each Lender's Credit Exposure as
set forth above, amounts denominated in Canadian Dollars shall be converted into
U.S. Dollars based on an exchange rate determined by the Administrative Agent in
accordance with its normal practices.
"Requirement of Law" means, as to any Person, the articles or certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to our binding upon such Person or to which any of its
property is subject.
"Restricted Payment" means (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the
25
32
Consolidated Cott Group, now or hereafter outstanding, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
member of the Consolidated Cott Group now or hereafter outstanding by such
member of the Consolidated Cott Group, except for any redemption, retirement,
sinking funds or similar payment payable solely in such shares of that class of
stock or in any class of stock junior to that class, (iii) any cash payment made
to redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any shares of any class
of Capital Stock of any member of the Consolidated Cott Group now or hereafter
outstanding or (iv) any payment to any Affiliate of any Credit Party except to
the extent otherwise expressly permitted in this Credit Agreement.
"Revolving Credit Notes" means the promissory notes of the Borrowers in
favor of each Lender evidencing the Revolving Loans and substantially in the
form of Exhibit F, as such promissory notes may be amended, modified,
supplemented or replaced from time to time.
"Revolving Loan Commitments" means the U.S. Revolving Loan Commitment and
the Canadian Revolving Loan Commitment.
"Revolving Loans" means the loans made pursuant to Section 2.1 and 2.3,
which may be U.S. Revolving Loans and/or Canadian Revolving Loans.
"Security Agreements" means the Canadian Security Agreement and the U.S.
Security Agreement.
"Security Documents" means, collectively, the Security Agreements, any
Acknowledgment Agreements and any Lockbox Agreement.
"Senior Financial Officers" means the Chief Executive Officer, Chief
Financial Officer, Controller and Treasurer of the Company or any other Credit
Party.
"Senior Management Members" means such term as defined in Section 6.30.
"Senior Officers" means each of the Senior Financial Officers and each
Senior Management Member of the Credit Parties.
"Senior Notes" means each of (i) the Senior Unsecured Notes due July 1,
2005, issued by the Company in the aggregate principal amount of $160,000,000
and (ii) the Senior Unsecured Notes due May 1, 2007, issued by the Company in
the aggregate principal amount of $125,000,000.
"Settlement Period" means such term as defined in Section 2.7(a) and (b).
"Shareholders' Equity" means, at any time, the consolidated shareowners'
equity of the Consolidated Cott Group at such time as determined in accordance
with U.S. GAAP; provided, however, that in determining Shareholders' Equity for
any purpose hereunder, the deduction for the foreign currency translation
adjustment shall be fixed at $25,200,000.
26
33
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" means, with respect to any Person as of a particular date, that
on such date (a) such Person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Person's assets would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair value of
the assets of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person and (e)
the present fair saleable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subordinated Affiliate Notes" means those certain subordinated promissory
notes, bearing various dates, in each case executed by Cott Beverages USA in
favor of the Irish Affiliate, in the aggregate outstanding principal amount of
$207,018,794 as of June 30, 1999, issued pursuant to that certain Loan
Agreement, dated as of August 19, 1997 between the Irish Affiliate and Cott
Beverages USA, as such promissory notes may be amended, modified, supplemented,
extended, renewed, refinanced or replaced from time to time.
"Subordinated Debt" means (i) the unsecured Indebtedness evidenced by the
Subordinated Affiliate Notes which is expressly subordinated and made junior to
the payment and performance in full of the Obligations pursuant to the
Subordination Agreement and (ii) any other unsecured debt of the Company which
is expressly subordinated and made junior to the payment and performance in full
of the Obligations and contains terms and conditions reasonably satisfactory to
the Required Lenders.
"Subordination Agreement" means the Subordination Agreement dated as of the
Closing Date among Cott Beverages USA, the Irish Affiliate and the Agent, as
amended, modified or supplemented from time to time.
"Subsidiary" of any Person means (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of the capital stock of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries of such Person, and (b) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries of such Person has more than 50% of the equity interest at any
time.
27
34
"Total Borrowing Base" means a U.S. dollar amount equal to the sum of the
U.S. Borrowing Base and the Canadian Borrowing Base.
"UCC" means such term as defined in Section 1.3.
"Unfinanced Capital Expenditures" means, for any period, all Capital
Expenditures not financed from proceeds of Funded Debt (other than Loans made
under this Agreement).
"U.S. Base Rate" means the higher of (a) the Federal Funds Rate plus 0.5%
or (b) the U.S. Prime Rate; provided, however, that if in the reasonable
judgment of the Administrative Agent the Federal Funds Rate cannot be determined
then the U.S. Prime Rate.
"U.S. Base Rate Loans" means any Loans accruing interest based on the U.S.
Base Rate.
"U.S. Borrowers" means Cott USA, Cott Beverages USA and BCB and such other
Persons organized under the laws of, and resident in, the United States that
become parties hereto pursuant to a Joinder Agreement in accordance with Section
7.11.
"U.S. Borrowing Base" means a U.S. dollar amount equal to the lesser of (i)
the sum of (a) 80% of the net book Accounts of the U.S. Credit Parties, plus (b)
50% of the net book Inventory of the U.S. Credit Parties and (ii) the sum of (a)
an amount equal to 85% of Eligible Accounts Receivable of the U.S. Credit
Parties, plus (b) an amount equal to the sum of (1) an amount equal to 50% of
Eligible Inventory of the U.S. Credit Parties consisting of raw materials (other
than packaging raw materials), plus (2) an amount equal to 70% of Eligible
Inventory of the U.S. Credit Parties consisting of finished goods (up to a
120-day supply thereof), minus (iii) reserves established by the Administrative
Agent from time to time in its reasonable discretion. Notwithstanding the
foregoing, the amount of Eligible Inventory based on the calculations set forth
in clause (ii)(B) above shall not exceed 50% of the aggregate U.S. Borrowing
Base.
"U.S. Collateral" means any and all assets and rights and interests in or
to property of the U.S. Credit Parties pledged from time to time as security for
the Obligations pursuant to the Security Documents whether now owned or
hereafter acquired, including, without limitation, all of the Accounts and
Inventory of the U.S. Credit Parties, any Chattel Paper, Documents or
Instruments evidencing or relating to such Accounts or Inventory, Deposit
Accounts and all Proceeds thereof, as defined in the U.S. Security Agreement.
"U.S. Credit Parties" means the U.S. Borrowers and all of their U.S.
Subsidiaries whether direct or indirect and whether now owned or hereafter
acquired.
"U.S. Dollar Equivalent" means such term as defined in Section 1.4.
"U.S. GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.2.
28
35
"U.S. Lenders" means the Lenders identified as such on Schedule 1.1A and
such other Lenders as may be added in accordance with the terms of this
Agreement.
"U.S. Letter of Credit" means a Letter of Credit issued under the U.S. LOC
Subfacility, as referenced in Section 2.2(a).
"U.S. Lockbox" means such term as defined in Section 3.1.
"U.S. Lockbox Account" means such term as defined in Section 3.1.
"U.S. Lockbox Bank" means such term as defined in Section 3.1.
"U.S. LOC Obligations" means LOC Obligations relating to U.S. Letters of
Credit.
"U.S. LOC Subfacility" means the Letter of Credit subfacility established
pursuant to Section 2.2.
"U.S. Obligations" means the Obligations of the U.S. Borrowers.
"U.S. Prime Rate" means the per annum rate of interest established from
time to time by the Administrative Agent at its principal office in Charlotte,
North Carolina (or such other principal office of the Administrative Agent as
communicated in writing to the Borrowers and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the U.S. Prime Rate shall
become effective as of 12:01 a.m. of the Business Day on which each change in
the U.S. Prime Rate is announced by the Administrative Agent. The U.S. Prime
Rate is a reference rate used by the Administrative Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor.
"U.S. Revolving Loan Commitment" means $30,000,000 (U.S.), as such amount
may be reduced in accordance with Section 2.10, plus, to the extent that the
Canadian Revolving Loan Commitment in effect at the time a U.S. Revolving Loan
is requested hereunder exceeds the outstanding Canadian Revolving Loans and LOC
Obligations, an amount equal to such excess.
"U.S. Revolving Loan Commitment Percentage" means, for each U.S. Lender,
the percentage identified as its U.S. Revolving Loan Commitment Percentage
opposite such U.S. Lender's name on Schedule 1.1A, as such percentage may be
modified by assignment in accordance with the terms of this Agreement.
"U.S. Revolving Loans" means the revolving loans made by the U.S. Lenders
to the U.S. Borrowers pursuant to Section 2.1.
"U.S. Security Agreement" means the Security Agreement, of even date
herewith, between the Administrative Agent and the U.S. Credit Parties, in the
form attached hereto as Exhibit H-1.
29
36
"U.S. Unutilized Revolving Commitment" means, for any period, the amount by
which (a) the then applicable U.S. Revolving Loan Commitment exceeds (b) the
daily average sum for such period of the outstanding aggregate principal amount
of all U.S. Revolving Loans plus the daily average balance of U.S. LOC
Obligations for such period.
"Voting Stock" means, with respect to any Person, Capital Stock issued by
such Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
1.2 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared in accordance with U.S. GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of U.S. GAAP applied on a basis consistent with those used in the
preparation of the latest annual or quarterly financial statements under Section
7.1 (or prior to the delivery of the first financial statements under Section
7.1 used in the preparation of the financial statements described in Section
6.6). In determining "pro forma" compliance with the financial covenants herein,
as required pursuant to any provision hereof, any Indebtedness incurred or asset
sale made or Acquisition completed shall be deemed to have been incurred, made
or completed, as the case may be, on the first day of the four fiscal quarters
most recently ended prior to such occurrence.
The Borrowers shall deliver to the Lenders at the same time as the delivery
of any annual or quarterly financial statement under Section 7.1, (a) a
description in reasonable detail of any material variation between the
application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the most recent preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the
paragraph above and (b) reasonable estimates of the difference between such
statements arising as a consequence thereof.
1.3 OTHER DEFINITIONAL PROVISIONS.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of North Carolina (the "UCC") shall
have the meanings given them in the UCC. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Credit Agreement shall
refer to the Credit Agreement as a whole and not to any particular provision of
this Credit Agreement, unless otherwise specifically provided. References in
this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.1 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing, computer
30
37
disk, e-mail and other means of reproducing words in a visible form. References
to any agreement or contract are to such agreement or contract as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof. References to any Person include the successors and permitted
assigns of such Person. References "from" or "through" any date mean, unless
otherwise specified, "from and including" or "through and including",
respectively. References to any times herein unless otherwise specified herein
shall refer to Eastern Standard or Daylight time, as from time to time in
effect.
1.4 DOLLAR EQUIVALENT PROVISIONS.
For the purpose of any provision of this Credit Agreement in which any
limitation, requirement, condition, event or circumstance is expressed by
reference to an amount in U.S. dollars: (a) any amount outstanding in Canadian
Dollars shall be converted to an amount in U.S. dollars (the "U.S. Dollar
Equivalent") based on an exchange rate as of the relevant date(s) determined by
the Canadian Agent in accordance with normal practices ; and (b) such U.S.
dollar amount shall be converted to an amount in Canadian Dollars (the "Canadian
Dollar Equivalent) based on an exchange rate as of the relevant date(s)
determined by the Canadian Agent in accordance with normal practices. The
Canadian Agent shall use the applicable noon or closing exchange rate of the
Bank of Canada as the basis for any such determinations.
ARTICLE II
THE REVOLVING LOANS
2.1 THE U.S. REVOLVING LOANS.
(a) U.S. Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each U.S. Lender agrees, severally and not
jointly, at any time and from time to time from the Effective Date to the
Maturity Date, to make revolving loans (each a "U.S. Revolving Loan" and
collectively, the "U.S. Revolving Loans") in U.S. dollars to the U.S.
Borrowers; provided, however, that (i) the aggregate amount of U.S.
Revolving Loans outstanding plus U.S. LOC Obligations outstanding at any
one time may not exceed the lesser of the U.S. Borrowing Base and the U.S.
Revolving Loan Commitment; (ii) the aggregate amount of U.S. Revolving
Loans outstanding plus Canadian Revolving Loans outstanding plus LOC
Obligations outstanding plus the aggregate Face Amount of Bankers'
Acceptances at any one time may not exceed the lesser of the Total
Borrowing Base and $40,000,000 (U.S.); and (iii) with regard to each
individual U.S. Lender, the U.S. Lender's pro rata share of outstanding
U.S. Revolving Loans plus U.S. LOC Obligations outstanding shall not exceed
such U.S. Lender's U.S. Revolving Loan Commitment Percentage of the U.S.
Revolving Loan Commitment. U.S. Revolving Loans shall consist of U.S. Base
Rate Loans or Eurodollar Loans (or a combination thereof) as the U.S.
Borrowers may request, and the U.S. Borrowers may borrow, repay and
reborrow in accordance with the terms hereof.
(b) Method of Borrowing for U.S. Revolving Loans.
31
38
(i) U.S. Base Rate Loans. By no later than 11:00 a.m., on the date of
the request, the applicable U.S. Borrower shall submit a Notice of
Borrowing to the Administrative Agent setting forth the amount requested,
the desire to have such Revolving Loan made as a U.S. Base Rate Loan and
complying in all respects with Section 5.2; provided, however, that certain
U.S. Base Rate Loans may be made without a Notice of Borrowing in
accordance with Section 2.7(a).
(ii) Eurodollar Loans. By no later than 11:00 a.m., three (3) Business
Days prior to the date of the requested Eurodollar Loan, the applicable
U.S. Borrower shall submit a Notice of Borrowing to the Administrative
Agent setting forth the amount thereof, the desire to have such Revolving
Loan made as a Eurodollar Loan, the Interest Period applicable thereto and
complying in all respects with Section 5.2.
2.2 U.S. LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require (so long as such terms and conditions do not impose any
financial obligation on or require any Lien not otherwise contemplated by this
Agreement to be given by any Credit Party or conflict with any obligation of, or
detract from any action which may be taken by, any Credit Party under this
Agreement), the Issuing Lender shall from time to time upon request issue, in
U.S. dollars, and the U.S. Lenders shall participate in, letters of credit (the
"U.S. Letters of Credit") for the account of the U.S. Borrowers or any of their
U.S. Subsidiaries, from the Effective Date until the Maturity Date, in a form
reasonably acceptable to the Issuing Lender; provided, however, that (i) the
aggregate amount of U.S. LOC Obligations shall not at any time exceed $3,000,000
(U.S.), (ii) the sum of the aggregate amount of U.S. LOC Obligations outstanding
plus U.S. Revolving Loans shall not exceed the lesser of the U.S. Borrowing Base
and the U.S. Revolving Loan Commitment, (iii) with respect to each individual
U.S. Lender, the U.S. Lender's pro rata share of outstanding U.S. Revolving
Loans plus its pro rata share of outstanding U.S. LOC Obligations shall not
exceed such U.S. Lender's Revolving Loan Commitment Percentage of the U.S.
Revolving Loan Commitment and (iv) the sum of U.S. Revolving Loans outstanding
plus Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus
the aggregate Face Amount of Bankers' Acceptances at any one time shall not
exceed the lesser of the Total Borrowing Base and $40,000,000 (U.S.). The
issuance and expiry date of each U.S. Letter of Credit shall be a Business Day.
Except as otherwise expressly agreed upon by all the U.S. Lenders, no U.S.
Letter of Credit shall have an original expiry date more than one year from the
date of issuance, or as extended, shall have an expiry date extending beyond the
Maturity Date, except that prior to the Maturity Date a U.S. Letter of Credit
may be issued or extended with an expiry date extending beyond the Maturity
Date, if and to the extent that the U.S. Borrowers shall provide cash collateral
to the Issuing Lender on the Maturity Date in an amount equal to the maximum
amount available to be drawn under such U.S. Letter of Credit and the Required
Lenders or the Issuing Lender shall not otherwise object. Each U.S. Letter of
Credit shall be either (x) a standby letter of
32
39
credit issued to support the obligations (including pension or insurance
obligations), contingent or otherwise, of a U.S. Borrower or any of its U.S.
Subsidiaries, or (y) a commercial letter of credit in respect of the purchase of
goods or services by a U.S. Borrower or any of its U.S. Subsidiaries in the
ordinary course of business. Each U.S. Letter of Credit shall comply with the
related LOC Documents.
(b) Notice and Reports. The request for the issuance of a U.S. Letter of
Credit shall be submitted to the Issuing Lender at least three (3) Business Days
prior to the requested date of issuance. The Issuing Lender will, at least
quarterly and more frequently upon request, provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the U.S. Letters
of Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary, the
face amount, and the expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the Administrative
Agent, promptly upon request, copies of the U.S. Letters of Credit.
(c) Participations. Each U.S. Lender, upon issuance of a U.S. Letter of
Credit, shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such U.S. Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, in each case in an
amount equal to its U.S. Revolving Loan Commitment Percentage of the obligations
under such U.S. Letter of Credit, and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to the Issuing Lender therefor and discharge when due, its U.S. Revolving
Loan Commitment Percentage of the obligations arising under such U.S. Letter of
Credit. Without limiting the scope and nature of each U.S. Lender's
participation in any U.S. Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed as required hereunder or under any such U.S.
Letter of Credit, each such U.S. Lender shall pay to the Issuing Lender its U.S.
Revolving Loan Commitment Percentage of such unreimbursed drawing in same day
funds on the day of notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) hereof. The obligation of
each U.S. Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the U.S. Borrowers or any other
U.S. Credit Party to reimburse the Issuing Lender under any U.S. Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any U.S. Letter of
Credit, the Issuing Lender will promptly notify the U.S. Borrowers. Unless the
U.S. Borrowers shall immediately notify the Issuing Lender of its intent to
otherwise reimburse the Issuing Lender, the U.S. Borrowers shall be deemed to
have requested a U.S. Revolving Loan made as a U.S. Base Rate Loan, in the
amount of the drawing as provided in subsection (e) hereof, the proceeds of
which will be used to satisfy the reimbursement obligations. The U.S. Borrowers
shall reimburse the Issuing Lender on the day of drawing under any U.S. Letter
of Credit either with the proceeds of a U.S. Revolving Loan obtained
33
40
hereunderor otherwise in same day funds as provided herein or in the LOC
Documents. If the U.S. Borrowers shall fail to reimburse the Issuing Lender as
provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the U.S. Base Rate, plus the sum of the
Applicable Percentage for Base Rate Loans and two percent (2%). Subject to
Section 2.2(k)(v), the U.S. Borrowers' reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of (but
without waiver of) any rights of set-off, counterclaim or defense to payment
that the applicable account party or the U.S. Borrowers may claim or have
against the Issuing Lender, the Administrative Agent, the U.S. Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation, any defense based on any failure of the applicable account
party, the U.S. Borrowers or any other U.S. Credit Party to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the U.S. Lenders of
the amount of any unreimbursed drawing and each U.S. Lender shall promptly pay
to the Administrative Agent for the account of the Issuing Lender, in Dollars
and in immediately available funds, the amount of such U.S. Lender's Revolving
Loan Commitment Percentage of such unreimbursed drawing. Such payment shall be
made on the day such notice is received by such U.S. Lender from the Issuing
Lender if such notice is received at or before 2:00 p.m., otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next succeeding the
day such notice is received. If such U.S. Lender does not pay such amount to the
Issuing Lender in full upon such request, such U.S. Lender shall, on demand, pay
to the Administrative Agent for the account of the Issuing Lender interest on
the unpaid amount during the period from the date the U.S. Lender received the
notice regarding the unreimbursed drawing until such U.S. Lender pays such
amount to the Issuing Lender in full at a rate per annum equal to, if paid
within two (2) Business Days of the date of drawing, the Federal Funds Rate and
thereafter at a rate equal to the U.S. Base Rate. Each U.S. Lender's obligation
to make such payment to the Issuing Lender, and the right of the Issuing Lender
to receive the same, shall be absolute and unconditional, shall not be affected
by any circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a U.S. Lender to the
Issuing Lender, such U.S. Lender shall, automatically and without any further
action on the part of the Issuing Lender or such U.S. Lender, acquire a
participation in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest thereon
and in the related LOC Documents, and shall have a claim against the U.S.
Borrowers and the other applicable U.S. Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the U.S. Borrowers
shall have requested, or been deemed to have requested, a U.S. Revolving Loan
borrowing to reimburse a drawing under a U.S. Letter of Credit, the
Administrative Agent shall give notice to the U.S. Lenders that a U.S. Revolving
Loan has been requested or deemed requested in connection with a drawing under a
U.S. Letter of Credit, in which case a U.S. Revolving Loan borrowing comprised
solely of U.S. Base Rate Loans (each such
34
41
borrowing, a "Mandatory Borrowing") shall be immediately made from all U.S.
Lenders (without giving effect to any termination of the Commitments pursuant to
Section 9.2) pro rata based on each U.S. Lender's respective U.S. Revolving Loan
Commitment Percentage and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each such U.S.
Lender hereby irrevocably agrees to make such U.S. Revolving Loans immediately
upon any such request or deemed request on account of each such Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the same such date notwithstanding (i) the amount of Mandatory Borrowing
may not comply with the minimum amount for borrowings of U.S. Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in Section
5.2 are then satisfied, (iii) whether a Default or Event of Default then exists,
(iv) the failure of any such request or deemed request for U.S. Revolving Loans
to be made by the time otherwise required hereunder, (v) the date of such
Mandatory Borrowing, or (vi) any reduction in the U.S. Revolving Loan Commitment
or any termination of the Commitments. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
U.S. Bankruptcy Code with respect to the U.S. Borrowers or any other U.S. Credit
Party), then each such U.S. Lender hereby agrees that it shall forthwith fund
(as of the date the Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the U.S. Borrowers on or after such date
and prior to such purchase) its Participation Interest in the outstanding U.S.
LOC Obligations; provided, further, that in the event any U.S. Lender shall fail
to fund its Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such U.S. Lender's unfunded
Participation Interest therein shall bear interest payable to the Issuing Lender
upon demand, at the rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Rate, and thereafter at a rate equal to the U.S. Base
Rate.
(f) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, a U.S. Letter of Credit
issued hereunder may contain a statement to the effect that such U.S. Letter of
Credit is issued for the account of a U.S. Subsidiary of a U.S. Borrower;
provided that notwithstanding such statement, such U.S. Borrower shall be the
actual account party for all purposes of this Agreement for such Letter of
Credit and such statement shall not affect the U.S. Borrowers' reimbursement
obligations hereunder with respect to such Letter of Credit.
(g) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any U.S. Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new U.S. Letter of Credit hereunder.
(h) Uniform Customs and Practices. The U.S. Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce
(Publication No. 500 or the most recent publication, the "UCP").
(i) Responsibility of Issuing Lender. It is expressly understood and agreed
that the obligations of the Issuing Lender hereunder to the U.S. Lenders are
only those expressly
35
42
set forth in this Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such condition
precedent has not been satisfied; provided, however, that nothing set forth in
this Section 2.2 shall be deemed to prejudice the right of any U.S. Lender to
recover from the Issuing Lender any amounts made available by such U.S. Lender
to the Issuing Lender pursuant to this Section 2.2 in the event that it is
determined by a court of competent jurisdiction that the payment with respect to
a U.S. Letter of Credit constituted gross negligence or willful misconduct on
the part of the Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict between this
Agreement and any LOC Document, this Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Agreement, the
U.S. Borrowers hereby agree to protect, indemnify, pay and save the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any U.S. Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
U.S. Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the U.S. Borrowers and the Issuing Lender, the U.S.
Borrowers shall assume all risks of the acts, omissions or misuse of any
U.S. Letter of Credit by the beneficiary thereof. The Issuing Lender shall
not be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any U.S. Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any U.S. Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the beneficiary of a
U.S. Letter of Credit to comply fully with conditions required in order to
draw upon a U.S. Letter of Credit; (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E) any
loss or delay in the transmission or otherwise of any document required in
order to make a drawing under a U.S. Letter of Credit or of the proceeds
thereof; and (F) any consequences arising from causes beyond the control of
the Issuing Lender, including, without limitation, any Government Acts.
None of the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
36
43
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any U.S. Letter of Credit
or the related certificates, if taken or omitted in good faith, shall not
put the Issuing Lender under any resulting liability to the U.S. Borrowers
or any U.S. Credit Party. It is the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify the
Issuing Lender against any and all risks involved in the issuance of the
U.S. Letters of Credit, all of which risks are hereby assumed by the U.S.
Borrowers, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future
Government Acts. The Issuing Lender shall not, in any way, be liable for
any failure by the Issuing Lender or anyone else to pay any drawing under
any U.S. Letter of Credit as a result of any Government Acts or any other
cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (k) is intended to limit the
reimbursement obligation of the U.S. Borrowers contained in this Section
2.2. The obligations of the U.S. Borrowers under this subsection (k) shall
survive the termination of this Agreement. No act or omission of any
current or prior beneficiary of a U.S. Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (k), the U.S. Borrowers shall have no obligation to indemnify
the Issuing Lender in respect of any liability incurred by the Issuing
Lender arising out of the gross negligence or willful misconduct of the
Issuing Lender, as determined by a court of competent jurisdiction. Nothing
in this Agreement shall relieve the Issuing Lender of any liability to the
U.S. Borrowers in respect of any action taken by the Issuing Lender which
action constitutes gross negligence or willful misconduct of the Issuing
Lender or a violation of the UCP or Uniform Commercial Code (as
applicable), as determined by a court of competent jurisdiction.
2.3 THE CANADIAN REVOLVING LOANS.
(a) Canadian Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each Canadian Lender agrees, severally and not
jointly, at any time and from time to time from the Effective Date to the
Maturity Date, to make revolving loans (each a "Canadian Revolving Loan"
and collectively, the "Canadian Revolving Loans") to the Canadian Borrowers
in Canadian Dollars or U.S. Dollars, as requested by the Canadian
Borrowers; provided, however, that (i) the aggregate amount of Canadian
Revolving Loans outstanding plus Canadian LOC Obligations outstanding plus
the aggregate Face Amount of Bankers' Acceptances at any one time may not
exceed the lesser of the Canadian Borrowing Base and the Canadian Revolving
Loan Commitment; (ii) the aggregate amount of U.S. Revolving Loans
outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations
outstanding plus the aggregate Face Amount of Bankers' Acceptances at any
one time may not exceed the lesser of the Total Borrowing Base and
$40,000,000 (U.S.); and (iii) with regard to each individual Canadian
Lender, the Canadian
37
44
Lender's pro rata share of Canadian Revolving Loans outstanding plus
Canadian LOC Obligations outstanding plus such Canadian Lender's pro rata
share of the aggregate Face Amount of Bankers' Acceptances at any one time
shall not exceed such Canadian Lender's Canadian Revolving Loan Commitment
Percentage of the Canadian Revolving Loan Commitment. Canadian Revolving
Loans shall consist of Canadian Base Rate Loans, Eurodollar Loans or the
creation of Bankers' Acceptances (or a combination thereof) as the Canadian
Borrowers may request and the Canadian Borrowers may borrow, repay and
reborrow in accordance with the terms hereof. All Canadian Revolving Loans
advanced on the Effective Date shall be Canadian Base Rate Loans and may
thereafter be converted to Eurodollar Loans in accordance with Section 4.1.
(b) Method of Borrowing for Canadian Revolving Loans.
(i) Canadian Base Rate Loans. By no later than 11:00 a.m.,
Toronto, Ontario time, on the date of the request, the applicable
Canadian Borrower shall submit a Notice of Borrowing to the Canadian
Agent setting forth the amount requested, the desire to have such
Revolving Loan made as a CA U.S. Base Rate Loan or a Canadian Prime
Rate Loan and complying in all respects with Section 5.2; provided,
however, that certain Canadian Base Rate Loans may be made without a
Notice of Borrowing in accordance with Section 2.7(b). All or any
portion of such CA U.S. Base Rate Loans may be converted into
Eurodollar Loans and all or any portion of such Canadian Prime Rate
Loans may be converted into Bankers' Acceptances, in each case, in
accordance with the terms of Section 4.1.
(ii) Eurodollar Loans. By no later than 11:00 a.m., Toronto,
Ontario time, three (3) Business Days prior to the date of the
requested Canadian Revolving Loan, the applicable Canadian Borrower
shall submit a Notice of Borrowing to the Canadian Agent setting forth
the amount thereof, the desire to have such Revolving Loan made as a
Eurodollar Loan, the Interest Period applicable thereto, and complying
in all respects with Section 5.2.
(iii) Bankers' Acceptances. In addition to Canadian Base Rate
Loans and Eurodollar Loans, the Canadian Revolving Loan Commitment may
be utilized by the creation of Bankers' Acceptances pursuant to
Section 2.5 hereof.
2.4 CANADIAN LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require (so long as such terms and conditions do not impose any
financial obligation on or require any Lien not otherwise contemplated by this
Agreement to be given by any Credit Party or conflict with any obligation of, or
detract from any action which may be taken by, any Credit Party under this
Agreement), the Issuing Lender shall from time to time upon request issue, in
U.S. Dollars or Canadian Dollars, and the Canadian Lenders shall participate in,
letters of credit (the "Canadian Letters of Credit") for the account of the
Canadian Borrowers or any of their Canadian Subsidiaries, from the Effective
Date until the
38
45
Maturity Date, in a form reasonably acceptable to the Issuing Lender; provided,
however, that (i) the aggregate amount of Canadian LOC Obligations shall not at
any time exceed $3,000,000 (U.S.), (ii) the sum of the aggregate amount of
Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding
plus the aggregate Face Amount of Bankers' Acceptances at any one time shall not
exceed the lesser of the Canadian Borrowing Base and the Canadian Revolving Loan
Commitment, (iii) with respect to each individual Canadian Lender, the Canadian
Lender's pro rata share of outstanding Canadian Revolving Loans plus its pro
rata share of outstanding Canadian LOC Obligations plus its pro rata share of
the Face Amount of Bankers' Acceptances outstanding shall not exceed such
Canadian Lender's Revolving Loan Commitment Percentage of the Canadian Revolving
Loan Commitment and (iv) the sum of U.S. Revolving Loans outstanding plus
Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus the
aggregate Face Amount of Bankers' Acceptances at any one time shall not exceed
the lesser of the Total Borrowing Base and $40,000,000 (U.S.). The issuance and
expiry date of each Canadian Letter of Credit shall be a Business Day. Except as
otherwise expressly agreed upon by all the Canadian Lenders, no Canadian Letter
of Credit shall have an original expiry date more than one year from the date of
issuance, or as extended, shall have an expiry date extending beyond the
Maturity Date, except that prior to the Maturity Date a Canadian Letter of
Credit may be issued or extended with an expiry date extending beyond the
Maturity Date, if and to the extent that the Canadian Borrowers shall provide
cash collateral to the Issuing Lender on the Maturity Date in an amount equal to
the maximum amount available to be drawn under such Canadian Letter of Credit
and the Required Lenders or the Issuing Lender shall not otherwise object. Each
Canadian Letter of Credit shall be either (x) a standby letter of credit issued
to support the obligations (including pension or insurance obligations),
contingent or otherwise, of the Canadian Borrowers or any of their Canadian
Subsidiaries, or (y) a commercial letter of credit in respect of the purchase of
goods or services by the Canadian Borrowers or any of their Canadian
Subsidiaries in the ordinary course of business. Each Canadian Letter of Credit
shall comply with the related LOC Documents.
(b) Notice and Reports. The request for the issuance of a Canadian Letter
of Credit shall be submitted to the Issuing Lender at least three (3) Business
Days prior to the requested date of issuance. The Issuing Lender will, at least
quarterly and more frequently upon request, provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the Canadian
Letters of Credit which are then issued and outstanding and any activity with
respect thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary, the
face amount, and the expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the Administrative
Agent, promptly upon request, copies of the Canadian Letters of Credit.
(c) Participations. Each Canadian Lender, upon issuance of a Canadian
Letter of Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Canadian Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Canadian Revolving Loan Commitment Percentage of the
obligations under such Canadian Letter of Credit, and
39
46
shall absolutely, unconditionally and irrevocably assume, as primary obligor and
not as surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Canadian Revolving Loan Commitment Percentage of the
obligations arising under such Canadian Letter of Credit. Without limiting the
scope and nature of each Canadian Lender's participation in any Canadian Letter
of Credit, to the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any such Canadian Letter of Credit, each such
Canadian Lender shall pay to the Issuing Lender its Canadian Revolving Loan
Commitment Percentage of such unreimbursed drawing in same day funds on the day
of notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Canadian Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Canadian Borrowers or any other Canadian Credit
Party to reimburse the Issuing Lender under any Canadian Letter of Credit,
together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Canadian Letter of
Credit, the Issuing Lender will promptly notify the Canadian Borrowers. Unless
the Canadian Borrowers shall immediately notify the Issuing Lender of their
intent to otherwise reimburse the Issuing Lender, the Canadian Borrowers shall
be deemed to have requested a Canadian Revolving Loan made as a Canadian Base
Rate Loan at the Canadian Prime Rate or the CA U.S. Prime Rate, as appropriate,
in the amount of the drawing as provided in subsection (e) hereof, the proceeds
of which will be used to satisfy the reimbursement obligations. The Canadian
Borrowers shall reimburse the Issuing Lender on the day of drawing under any
Canadian Letter of Credit either with the proceeds of a Canadian Revolving Loan
obtained hereunder or otherwise in same day funds as provided herein or in the
LOC Documents. If the Canadian Borrowers shall fail to reimburse the Issuing
Lender as provided hereinabove, the unreimbursed amount of such drawing shall
bear interest at a per annum rate equal to the Canadian Prime Rate or the CA
U.S. Prime Rate, as appropriate, plus the sum of the Applicable Percentage for
Base Rate Loans and two percent (2%). Subject to Section 2.4(k)(v), the Canadian
Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of (but without waiver of)
any rights of set-off, counterclaim or defense to payment the applicable account
party or the Canadian Borrowers may claim or have against the Issuing Lender,
the Administrative Agent, the Canadian Agent, the Canadian Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation, any defense based on any failure of the applicable account
party, the Canadian Borrowers or any other Canadian Credit Party to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the Canadian Lenders
of the amount of any unreimbursed drawing and each Canadian Lender shall
promptly pay to the Canadian Agent for the account of the Issuing Lender, in
immediately available funds, the amount of such Canadian Lender's Revolving Loan
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Canadian Lender from the Issuing
Lender if such notice is received at or before 2:00 p.m., otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next succeeding the
day such notice is received. If such
40
47
Canadian Lender does not pay such amount to the Issuing Lender in full upon such
request, such Canadian Lender shall, on demand, pay to the Canadian Agent for
the account of the Issuing Lender interest on the unpaid amount during the
period from the date the Canadian Lender received the notice regarding the
unreimbursed drawing until such Canadian Lender pays such amount to the Issuing
Lender in full at a rate per annum equal to, if paid within two (2) Business
Days of the date of drawing, the Federal Funds Rate and thereafter at a rate
equal to the Canadian Prime Rate for Loans made in Canadian Dollars or the CA
U.S. Prime Rate for Loans made in U.S. Dollars, as appropriate. Each Canadian
Lender's obligation to make such payment to the Issuing Lender, and the right of
the Issuing Lender to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and without regard to the
termination of this Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a Canadian
Lender to the Issuing Lender, such Canadian Lender shall, automatically and
without any further action on the part of the Issuing Lender or such Canadian
Lender, acquire a participation in an amount equal to such payment (excluding
the portion of such payment constituting interest owing to the Issuing Lender)
in the related unreimbursed drawing portion of the Canadian LOC Obligation and
in the interest thereon and in the related LOC Documents, and shall have a claim
against the Canadian Borrowers and the other Canadian Credit Parties with
respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Canadian
Borrowers shall have requested, or been deemed to have requested, a Canadian
Revolving Loan borrowing to reimburse a drawing under a Canadian Letter of
Credit, the Canadian Agent shall give notice to the Canadian Lenders that a
Canadian Revolving Loan has been requested or deemed requested in connection
with a drawing under a Canadian Letter of Credit, in which case a Canadian
Revolving Loan borrowing comprised solely of Canadian Base Rate Loans (each such
borrowing, a "Mandatory Borrowing") shall be immediately made from all Canadian
Lenders (without giving effect to any termination of the Commitments pursuant to
Section 9.2) pro rata based on each Canadian Lender's respective Canadian
Revolving Loan Commitment Percentage and the proceeds thereof shall be paid
directly to the Issuing Lender for application to the respective Canadian LOC
Obligations. Each such Canadian Lender hereby irrevocably agrees to make such
Canadian Revolving Loans immediately upon any such request or deemed request on
account of each such Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date notwithstanding
(i) the amount of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Canadian Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 5.2 are then satisfied, (iii)
whether a Default or Event of Default then exists, (iv) the failure of any such
request or deemed request for Canadian Revolving Loans to be made by the time
otherwise required hereunder, (v) the date of such Mandatory Borrowing, or (vi)
any reduction in the Canadian Revolving Loan Commitment or any termination of
the Commitments. In the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including, without limitation, as
a result of the commencement of a proceeding under the U.S. Bankruptcy Code (or
applicable Canadian bankruptcy law) with respect to
41
48
the Canadian Borrowers or any other Canadian Credit Party), then each such
Canadian Lender hereby agrees that it shall forthwith fund (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Canadian Borrowers on or after such date and prior to such
purchase) its Participation Interest in the outstanding Canadian LOC
Obligations; provided, further, that in the event any Canadian Lender shall fail
to fund its Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such Canadian Lender's unfunded
Participation Interest therein shall bear interest payable to the Issuing Lender
upon demand, at the rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Rate, and thereafter at a rate equal to the Canadian
Prime Rate, plus two percent (2%).
(f) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, a Canadian Letter of
Credit issued hereunder may contain a statement to the effect that such Canadian
Letter of Credit is issued for the account of a Canadian Subsidiary of the
Canadian Borrowers; provided that notwithstanding such statement, the Canadian
Borrowers shall be the actual account parties for all purposes of this Agreement
for such Letter of Credit and such statement shall not affect the Canadian
Borrowers' reimbursement obligations hereunder with respect to such Letter of
Credit.
(g) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Canadian Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Canadian Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Canadian Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce
(Publication No. 500 or the most recent publication, the "UCP"). ---
(i) Responsibility of Issuing Lender. It is expressly understood and agreed
that the obligations of the Issuing Lender hereunder to the Canadian Lenders are
only those expressly set forth in this Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.4 shall be deemed to prejudice the right of any
Canadian Lender to recover from the Issuing Lender any amounts made available by
such Canadian Lender to the Issuing Lender pursuant to this Section 2.4 in the
event that it is determined by a court of competent jurisdiction that the
payment with respect to a Canadian Letter of Credit constituted gross negligence
or willful misconduct on the part of the Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict between this
Agreement and any LOC Document, this Agreement shall govern.
42
49
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Agreement, the
Canadian Borrowers hereby agree to protect, indemnify, pay and save the
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Lender may incur or be subject
to as a consequence, direct or indirect, of (A) the issuance of any
Canadian Letter of Credit or (B) the failure of the Issuing Lender to honor
a drawing under a Canadian Letter of Credit as a result of any Government
Act.
(ii) As between the Canadian Borrowers and the Issuing Lender, the
Canadian Borrowers shall assume all risks of the acts, omissions or misuse
of any Canadian Letter of Credit by the beneficiary thereof. The Issuing
Lender shall not be responsible for: (A) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of any Canadian
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Canadian Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of a Canadian Letter of Credit to comply fully with
conditions required in order to draw upon a Canadian Letter of Credit; (D)
errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (E) any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under a Canadian Letter
of Credit or of the proceeds thereof; and (F) any consequences arising from
causes beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect, impair, or
prevent the vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Canadian Letter of
Credit or the related certificates, if taken or omitted in good faith,
shall not put the Issuing Lender under any resulting liability to the
Canadian Borrowers or any other Canadian Credit Party. It is the intention
of the parties that this Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks involved
in the issuance of the Canadian Letters of Credit, all of which risks are
hereby assumed by the Canadian Borrowers, including, without limitation,
any and all risks of the acts or omissions, whether rightful or wrongful,
as a result of any Government Act. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to pay
any drawing under any Canadian Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the Issuing
Lender.
43
50
(iv) Nothing in this subsection (k) is intended to limit the
reimbursement obligation of the Canadian Borrowers contained in this
Section 2.4. The obligations of the Canadian Borrowers under this
subsection (k) shall survive the termination of this Agreement. No act or
omission of any current or prior beneficiary of a Canadian Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (k), the Canadian Borrowers shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred by the
Issuing Lender arising out of the gross negligence or willful misconduct of
the Issuing Lender, as determined by a court of competent jurisdiction.
Nothing in this Agreement shall relieve the Issuing Lender of any liability
to the Canadian Borrowers in respect of any action taken by the Issuing
Lender which action constitutes gross negligence or willful misconduct of
the Issuing Lender or a violation of the UCP or Uniform Commercial Code (as
applicable), as determined by a court of competent jurisdiction.
2.5 BANKERS' ACCEPTANCES.
(a) Form.
(i) To facilitate the acceptance of Bankers' Acceptances hereunder,
the Canadian Borrowers hereby appoint each Canadian Lender as its attorney
to sign and endorse on its behalf, as and when considered necessary by such
Canadian Lender, an appropriate number of orders in the form prescribed by
such Canadian Lender.
(ii) Each Canadian Lender may, at its option, execute any order in
handwriting or by the facsimile or mechanical signature of any of its
authorized officers, and the Canadian Lenders are hereby authorized to
accept or pay, as the case may be, any order of the Canadian Borrowers
which purports to bear such a signature notwithstanding that any such
individual has ceased to be an authorized officer of such Canadian Lender.
Any such order or Bankers' Acceptance shall be as valid as if he or she
were an authorized officer at the date of issue of the order or Bankers'
Acceptance.
(iii) Any order signed by a Canadian Lender as attorney for the
Canadian Borrowers, whether signed in handwriting or by the facsimile or
mechanical signature of an authorized officer of a Canadian Lender, may be
dealt with by the Canadian Agent or any Canadian Lender to all intents and
purposes and shall bind the Canadian Borrowers as if duly signed and issued
by the Canadian Borrowers.
(iv) The receipt by the Canadian Agent of a notice under Section
2.5(d) requesting Bankers' Acceptances shall be each Canadian Lender's
sufficient authority to execute, and each Canadian Lender shall, subject to
the terms and conditions of this Credit Agreement, execute orders in
accordance with such
44
51
request, and the orders so executed shall thereupon be deemed to have been
presented for acceptance.
(b) Issuance. Subject to the terms and conditions hereof and of the BA
Documents executed in connection with the creation of each Banker's Acceptance
and any other terms and conditions which the Canadian Lenders may reasonably
require (so long as such terms and conditions do not impose any financial
obligation on or require any Lien (not otherwise contemplated by this Credit
Agreement) to be given by the Canadian Borrowers or any other Credit Party or
conflict with any obligation of, or detract from any action which may be taken
by, any Credit Party under this Agreement), each Canadian Lender agrees,
severally and not jointly, at any time and from time to time (from the Effective
Date to the Maturity Date or such earlier date on which the Canadian Revolving
Loan Commitment has been terminated as provided herein), to create Bankers'
Acceptances by accepting orders of the Canadian Borrowers presented to it for
acceptance equal to such Canadian Lender's Canadian Revolving Loan Commitment
Percentage of such Bankers' Acceptances as the Canadian Borrowers may request on
such date; provided, however, that (i) the sum of the aggregate Face Amount of
Bankers' Acceptances outstanding plus the aggregate amount of Canadian Revolving
Loans outstanding plus Canadian LOC Obligations outstanding shall not exceed the
Canadian Revolving Loan Commitment, (ii) with respect to each individual
Canadian Lender, such Lender's pro rata share of outstanding Canadian Revolving
Loans plus its pro rata share of outstanding Canadian LOC Obligations plus its
pro rata share of the Face Amount of Bankers' Acceptances outstanding shall not
exceed such Lender's Canadian Revolving Loan Commitment Percentage of the
Canadian Revolving Loan Commitment, and (iii) 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 larger multiple thereof, such Face Amount shall be increased or
reduced by the Canadian Agent in its discretion to the nearest multiple of
C$100,000. Upon the acceptance of any order of the Canadian Borrowers pursuant
hereto, the Canadian Borrowers shall pay to each of the applicable Canadian
Lenders, in advance, the Acceptance Fee. Forthwith after each request for
drawdown of, continuation of or conversion into Bankers' Acceptances, the
Canadian Agent shall notify each Canadian Lender of the amount of Bankers'
Acceptances to be accepted by such Canadian Lender. The Canadian Borrowers shall
as soon as practical deliver to the Canadian Agent a notice confirming the
issuance of Bankers' Acceptances and specifying the BA Discount Proceeds derived
therefrom. For greater certainty, with respect to each extension of credit by
way of Bankers' Acceptances, each Bankers' Acceptance shall have the same term
and, upon sale, each Bankers' Acceptance shall be discounted at the Applicable
BA Discount Rate.
(c) Requirements of Bankers' Acceptances. Each Bankers' Acceptance shall
comply with the related BA Documents and shall be executed by the Canadian
Borrowers and presented to the Canadian Lenders pursuant to such procedures as
are provided for in such BA Documents or as otherwise provided or required by a
Canadian Lender. The creation and maturity date of each Bankers' Acceptance
shall be a Business Day and no Bankers' Acceptance shall have a maturity date
later than the Maturity Date.
45
52
(d) Method of Requesting a Bankers' Acceptance. By no later than 11:00
a.m., Toronto, Ontario time, two Business Days prior to the date of the
requested Bankers' Acceptance, the Canadian Borrowers shall submit an
irrevocable notice, substantially in the form of Exhibit G, to the Canadian
Agent setting forth the aggregate amount of Bankers' Acceptances requested and
the maturity date of the requested Bankers' Acceptances which shall be from 30
up to 180 days, at the election of the Canadian Borrowers, and complying in all
respects with subsection 5.2.
(e) Safekeeping of Orders. Any executed orders to be used as Bankers'
Acceptances which are delivered to a Canadian Lender shall be held in
safekeeping with the same degree of care as if they were such Canadian Lender's
own property, and shall be kept at the place at which such orders are ordinarily
held by such Canadian Lender, provided that such Canadian Lender shall not be
deemed to be an insurer thereof.
(f) Maturity/Continuations. The Canadian Borrowers shall pay to the
Canadian Agent, and there shall become due and payable, at 1:00 p.m., Toronto,
Ontario time, on the maturity date for each Bankers' Acceptance an amount in
Canadian Dollars in same day funds equal to the Face Amount of such Bankers'
Acceptance (notwithstanding that any Canadian Lender which accepted any such
Bankers' Acceptance may be the holder thereof at maturity); provided, however,
that subject to Section 4.10 and provided that the Canadian Borrowers have, by
giving notice in accordance with Section 2.5(c) or Section 4.1, requested the
Canadian Lenders to accept its orders to replace all or a portion of outstanding
Bankers' Acceptances as they mature, each Canadian Lender shall, on the maturity
of such Bankers' Acceptances, accept the Canadian Borrowers' order(s) having an
aggregate Face Amount equal to such Canadian Lender's pro rata share of such new
Face Amount as will result in the aggregate BA Discount Proceeds, net of the
Acceptance Fees, of the new order(s) being equal to (or, due to the operation of
2.5(h), exceeding to the least extent possible) the aggregate Face Amount of the
matured Bankers' Acceptances or the portion thereof to be replaced.
(g) Repayments Prior to Maturity. Repayment of the Face Amount of a
Bankers' Acceptance may be made, prior to the maturity date thereof, by the
Canadian Borrowers to the Canadian Lender which has accepted such Bankers'
Acceptance, but the amount repaid shall be held on deposit by such Canadian
Lender until the maturity date of such Bankers' Acceptance. The Canadian
Borrowers shall be entitled to the benefit of any interest accruing on such
deposit, and on the maturity date of such Bankers' Acceptance, such Canadian
Lender shall apply such interest in payment of amounts owed by the Canadian
Borrowers hereunder. Any such repayment of the Face Amount of a Bankers'
Acceptance by the Canadian Borrowers to a Canadian Lender shall satisfy the
Canadian Borrowers' obligations under the Bankers' Acceptance so repaid, and
such Canadian Lender shall thereafter be solely responsible for the payment of
such Bankers' Acceptance.
(h) Minimum Amounts. Each request for Bankers' Acceptances shall be in a
minimum aggregate amount of C$1,000,000 and in an integral multiple of C$100,000
above such amount. The Face Amount of each Bankers' Acceptance created hereunder
shall be C$100,000 or any multiple thereof.
46
53
(i) Funding of Bankers' Acceptances.
(i) Subject to subsections (ii) and (iii) below, each Canadian
Lender shall, not later than 1:00 p.m., Toronto, Ontario time, on the
date of creation of Bankers' Acceptances, accept orders of the
Canadian Borrowers which are presented to it for acceptance in an
amount equal to each Canadian Lender's Canadian Revolving Loan
Commitment Percentage of the aggregate Face Amounts of Bankers'
Acceptances created on such date; provided, however, that if the Face
Amount of a Banker's Acceptance, which would otherwise be accepted by
a Canadian Lender, would not be C$100,000 or a larger multiple
thereof, such Face Amount shall be increased or reduced by the
Canadian Agent in its discretion to the nearest multiple of C$100,000.
Subject to the provisions hereof, the Canadian Agent shall be
responsible for making all necessary arrangements with each of the
Canadian Lenders with respect to the acceptance of Bankers'
Acceptances.
(ii) Each Canadian Lender shall transfer to the Canadian Agent
for value on such creation date immediately available Canadian Dollars
in an aggregate amount equal to the BA Discount Proceeds of all
Bankers' Acceptances accepted and sold or purchased by such Canadian
Lender on such date net of the applicable Acceptance Fee and net of
the amount required to pay any of its previously accepted Bankers'
Acceptances that are maturing on such date or its percentage of any
Canadian Revolving Loan that is being converted to Bankers'
Acceptances on such date.
(iii) Subject to subsection 4.10, in the sole judgment of a
Canadian Lender, if such Canadian Lender is unable to create a
Bankers' Acceptance in accordance with this Agreement, such Canadian
Lender shall give an irrevocable notice to such effect to the Canadian
Agent and the Canadian Borrowers prior to 11:00 a.m., Toronto, Ontario
time, on the date of the requested creation of the Bankers'
Acceptances. Such Canadian Lender shall make available to the Canadian
Borrowers prior to 1:00 p.m., Toronto, Ontario time, one Business Day
prior to the date of such requested Bankers' Acceptance, a Canadian
Dollar loan in a principal amount equal to the BA Discount Proceeds of
such Canadian Lender's pro rata share of the aggregate of the Face
Amounts of Bankers' Acceptances to be created on such date and all of
such Canadian Dollar loans to be made pursuant to this Section
2.5(i)(iii) on such date, such loan to be funded in the same manner as
the Bankers' Acceptances provided by the other Canadian Lenders. Such
loan shall have the same term as the Bankers' Acceptance for which it
is a substitute and shall bear such interest per annum throughout the
term thereof as shall permit such Canadian Lender to obtain the same
effective rate as if such Canadian Lender had accepted and purchased a
Bankers' Acceptance at the same Acceptance Fee and pricing at which
the Canadian Agent would have accepted and purchased such Bankers'
Acceptance on the bid side of the market at approximately 1:00 p.m.,
Toronto, Ontario time, on the date such loan is made. The Canadian
Borrowers hereby agree that if such loan is made by a Canadian Lender
interest shall be
47
54
payable in advance on the date of such loan by deducting the interest
payable in respect thereof from the principal amount of such loan.
The Canadian Agent shall promptly inform the Administrative Agent of
the creation of Bankers' Acceptances and the terms thereof. No Canadian
Lender shall be responsible for the failure or delay by any other Canadian
Lender in its obligation to create Bankers' Acceptances hereunder;
provided, however, that the failure of any Canadian Lender to fulfill its
Commitment hereunder shall not relieve any other Canadian Lender of its
Commitment hereunder.
2.6 MINIMUM AMOUNTS OF LOANS.
Revolving Loans consisting of less than $1,000,000 shall be made as Base
Rate Loans. Revolving Loans of $1,000,000 or more may be made as Base Rate Loans
or Eurodollar Loans, or a combination thereof, as the Borrowers may request;
provided that no more than five (5) Canadian Eurodollar Loans and five (5) U.S.
Eurodollar Loans shall be outstanding hereunder at any one time; and provided,
further, that Eurodollar Loans shall be in a minimum principal amount of at
least $1,000,000 and integral multiples of $500,000 in excess thereof. For the
purposes of this Section, (i) Eurodollar Loans with the same Interest Period
shall be considered as one Eurodollar Loan and (ii) Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar Loans,
even if they begin on the same date, although borrowings, conversions and
continuations may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period.
2.7 FUNDING OF LOANS TO BORROWERS.
(a) U.S. Revolving Loans.
(i) Upon receipt of a Notice of Borrowing requesting U.S. Revolving
Loans, the Administrative Agent shall promptly inform the U.S. Lenders as
to the terms thereof. Each U.S. Lender will make its pro rata share of each
U.S. Revolving Loan available to the Administrative Agent by 1:00 p.m.,
Charlotte, North Carolina time, on the date specified in the Notice of
Borrowing by deposit (in U.S. dollars) of immediately available funds at
the offices of the Administrative Agent at the address provided in Section
14.1, or at such other address as the Administrative Agent may designate in
writing. All U.S. Revolving Loans shall be made by the U.S. Lenders pro
rata on the basis of each U.S. Lender's U.S. Revolving Loan Commitment
Percentage. The amount of the U.S. Revolving Loans will then be made
available to the U.S. Borrowers by the Administrative Agent by crediting
the account of the U.S. Borrowers on the books of such office of the
Administrative Agent to the extent of the amount of such U.S. Revolving
Loans are made available to the Administrative Agent.
(ii) Because the U.S. Borrowers anticipate requesting borrowings of
U.S. Revolving Loans on a daily basis and repaying U.S. Revolving Loans on
a daily basis through the collection of Accounts and the proceeds of other
Collateral, resulting in the
48
55
amount of outstanding U.S. Revolving Loans fluctuating from day to day, in
order to administer the U.S. Revolving Loans in an efficient manner and to
minimize the transfer of funds between the Administrative Agent and the
U.S. Lenders, the U.S. Lenders hereby instruct the Administrative Agent,
and the Administrative Agent may (but is not obligated to) (A) make
available, on behalf of the U.S. Lenders, the full amount of all U.S.
Revolving Loans requested by the U.S. Borrowers (by telephone, followed by
written confirmation) without requiring that the U.S. Borrowers give the
Administrative Agent a written Notice of Borrowing with respect to such
borrowing and without giving each U.S. Lender prior notice of the proposed
borrowing, of such U.S. Lender's Revolving Loan Commitment Percentage
thereof and the other matters covered by the Notice of Borrowing and (B) if
the Administrative Agent has made any such amounts available as provided in
clause (A), upon repayment of U.S. Revolving Loans by the U.S. Borrowers,
apply such amounts repaid directly to the amounts made available by the
Administrative Agent in accordance with clause (A) and not yet settled as
described below; provided that the Administrative Agent shall not advance
funds as described in clause (A) above if the Administrative Agent has
actually received prior to such borrowing (1) an officer's certificate from
the Company or any U.S. Borrower pursuant to and in accordance with Section
7.1(f) that a Default or Event of Default is in existence, which Default or
Event of Default has not been cured or waived in accordance with the terms
hereof, or (2) a Notice of Borrowing with respect to such borrowing from
any U.S. Borrower wherein the certification provided therein states that
the conditions to the making of the requested U.S. Revolving Loans have not
been satisfied or (3) a written notice from any U.S. Lender that the
conditions to such borrowing have not been satisfied, which officer's
certificate, Notice of Borrowing or notice, in each case, shall not have
been rescinded.
Notwithstanding any provision in the immediately preceding paragraph
to the contrary, (x) each of the U.S. Borrowers hereby appoints the
Administrative Agent as its attorney-in-fact, and requests that the
Administrative Agent act for its benefit for the purpose of requesting U.S.
Revolving Loans pursuant to this Section 2.7(a)(ii), (y) the Administrative
Agent hereby agrees to act as attorney-in-fact and for the benefit of the
U.S. Borrowers for the purpose of this Section 2.7(a)(ii) and (z)
accordingly, unless the U.S. Borrowers shall withdraw such appointment or
at any time less than $5,000,000 is available to be borrowed by the U.S.
Borrowers under the U.S. Revolving Loan Commitment and the U.S. Borrowing
Base, all borrowings permitted to be made by the U.S. Borrowers pursuant to
this Section 2.7(a)(ii) shall be made by the Administrative Agent acting in
its capacity as attorney-in-fact for the U.S. Borrowers. The Lenders hereby
acknowledge and consent to the appointment of the Administrative Agent as
attorney-in-fact for the purpose of requesting U.S. Revolving Loans
pursuant to this Section 2.7(a)(ii). All other conditions to borrowings in
this Section 2.7(a)(ii) shall be fully applicable. The Administrative Agent
shall have the right (but not the obligation), prior to requesting any
borrowing hereunder on behalf of the U.S. Borrowers, to require that the
U.S. Borrowers certify in writing that no Event of Default exists at the
time of such borrowing.
49
56
Proceeds of U.S. Revolving Loans made pursuant to this Section
2.7(a)(ii) shall be transferred directly to the First Union Funding Account
and applied to the payment of control disbursement checks and other
appropriate charges to such account designated from time to time by the
U.S. Borrowers or as otherwise provided for herein and in the other Credit
Documents. Wire transfers on any Business Day from the First Union Funding
Account must be specifically requested by the U.S. Borrowers by telecopy by
no later than 1:00 P.M. (Eastern time) on such Business Day.
If the Administrative Agent advances U.S. Revolving Loans on behalf of
the U.S. Lenders, as provided in the immediately preceding paragraphs, the
amount of outstanding U.S. Revolving Loans and each U.S. Lender's U.S.
Revolving Loan Commitment Percentage thereof shall be computed weekly
rather than daily and shall be adjusted upward or downward on the basis of
the amount of outstanding U.S. Revolving Loans as of 5:00 P.M. on the
Business Day immediately preceding the date of each computation; provided,
however, that the Administrative Agent retains the absolute right at any
time or from time to time to make the aforedescribed adjustments at
intervals more frequent than weekly. The Administrative Agent shall deliver
to each of the U.S. Lenders after the end of each week, or such lesser
period or periods as the Administrative Agent shall determine, a summary
statement of the amount of outstanding U.S. Revolving Loans for such period
(such week or lesser period or periods being hereafter referred to as a
"Settlement Period"). If the summary statement is sent by the
Administrative Agent and received by the U.S. Lenders prior to 12:00 Noon
on any Business Day each U.S. Lender shall make the transfers described in
the next succeeding sentence no later than 3:00 P.M. on the day such
summary statement was sent; and if such summary statement is sent by the
Administrative Agent and received by the U.S. Lenders after 12:00 Noon on
any Business Day, each U.S. Lender shall make such transfers no later than
3:00 P.M. on the next succeeding Business Day. If in any Settlement Period,
the amount of a U.S. Lender's U.S. Revolving Loan Commitment Percentage of
the U.S. Revolving Loans is in excess of the amount of U.S. Revolving Loans
actually funded by such U.S. Lender, such U.S. Lender shall forthwith (but
in no event later than the time set forth in the next preceding sentence)
transfer to the Administrative Agent by wire transfer in immediately
available funds the amount of such excess; and, on the other hand, if the
amount of a U.S. Lender's U.S. Revolving Loan Commitment Percentage of the
U.S. Revolving Loans in any Settlement Period is less than the amount of
U.S. Revolving Loans actually funded by such U.S. Lender, the
Administrative Agent shall forthwith transfer to such U.S. Lender by wire
transfer in immediately available funds the amount of such difference. The
obligation of each of the U.S. Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by the
Administrative Agent.
Each of the Administrative Agent and the U.S. Lenders agree to xxxx
their respective books and records at the end of each Settlement Period to
show at all times the dollar amount of their respective U.S. Revolving Loan
Commitment Percentages of the outstanding U.S. Revolving Loans. Because the
Administrative Agent on behalf of the U.S. Lenders may be advancing and/or
may be repaid U.S. Revolving Loans prior to the time when the U.S. Lenders
will actually advance and/or be repaid U.S. Revolving Loans, interest with
respect to U.S. Revolving Loans shall be allocated by the Administrative
50
57
Agent to each U.S. Lender (including the Administrative Agent) in
accordance with the amount of U.S. Revolving Loans actually advanced by and
repaid to each U.S. Lender (including the Administrative Agent) during each
Settlement Period and shall accrue from and including the date such U.S.
Revolving Loans are advanced by the Administrative Agent to but excluding
the date such U.S. Revolving Loans are repaid by the U.S. Borrowers in
accordance with Section 4.3 or actually settled by the applicable U.S.
Lender as described in this Section 2.7(a)(ii). For purposes hereof, the
U.S. Revolving Loans shall be deemed paid as and to the extent set forth in
Section 3.1(b). All such U.S. Revolving Loans shall be made as U.S. Base
Rate Loans.
(b) Canadian Revolving Loans.
(i) Upon receipt of a Notice of Borrowing requesting a Canadian
Revolving Loan, the Canadian Agent shall promptly inform the Canadian
Lenders of the receipt thereof. Each Canadian Lender will make its pro rata
share of such Canadian Revolving Loan available to the Canadian Agent by
1:00 p.m., Toronto, Ontario time, on the date specified in the Notice of
Borrowing by deposit (in Canadian Dollars or U.S. dollars, as appropriate,
as requested by the Canadian Borrowers) of immediately available funds at
the office of the Canadian Agent at the address provided in Section 14.1.
All Canadian Revolving Loans shall be made by the Canadian Lenders pro rata
on the basis of each Canadian Lender's Canadian Revolving Loan Commitment
Percentage. The amount of the Canadian Revolving Loans will then be made
available to the applicable Canadian Borrower by the Canadian Agent by
crediting the account of such Canadian Borrower on the books of such office
of the Canadian Agent to the extent of the amount of such Canadian
Revolving Loan made available to the Canadian Agent.
(ii) Because the Canadian Borrowers anticipate requesting borrowings
of Canadian Revolving Loans on a daily basis and repaying Canadian
Revolving Loans on a daily basis through the collection of Accounts and the
proceeds of other Collateral, resulting in the amount of outstanding
Canadian Revolving Loans fluctuating from day to day, in order to
administer the Canadian Revolving Loans in an efficient manner and to
minimize the transfer of funds between the Canadian Agent and the Canadian
Lenders, the Canadian Lenders hereby instruct the Canadian Agent, and the
Canadian Agent may (but is not obligated to) (A) make available, on behalf
of the Canadian Lenders, the full amount of all Canadian Revolving Loans
requested by the Canadian Borrowers (by telephone, followed by written
confirmation) without requiring that the Canadian Borrowers give the
Canadian Agent a written Notice of Borrowing with respect to such borrowing
and without giving each Canadian Lender prior notice of the proposed
borrowing, of such Canadian Lender's Revolving Loan Commitment Percentage
thereof and the other matters covered by the Notice of Borrowing and (B) if
the Canadian Agent has made any such amounts available as provided in
clause (A), upon repayment of Canadian Revolving Loans by the Canadian
Borrowers, apply such amounts repaid directly to the amounts made available
by the Canadian Agent in accordance with clause (A) and not yet settled as
described below; provided that the Canadian Agent shall not advance funds
as described in clause (A) above if the Canadian Agent has actually
received prior to such borrowing (1) an officer's certificate from the
Company pursuant
51
58
to and in accordance with Section 7.1(f) that a Default or Event of Default
is in existence, which Default or Event of Default has not been cured or
waived in accordance with the terms hereof, or (2) a Notice of Borrowing
with respect to such borrowing from the Canadian Borrowers wherein the
certification provided therein states that the conditions to the making of
the requested Canadian Revolving Loans have not been satisfied or (3) a
written notice from any Canadian Lender that the conditions to such
borrowing have not been satisfied, which officer's certificate, Notice of
Borrowing or notice, in each case, shall not have been rescinded.
Notwithstanding any provision in the immediately preceding paragraph
to the contrary, (x) each of the Canadian Borrowers hereby appoints the
Canadian Agent as its attorney-in-fact, and requests that the Canadian
Agent act for its benefit for the purpose of requesting Canadian Revolving
Loans pursuant to this Section 2.7(b)(ii), (y) the Canadian Agent hereby
agrees to act as attorney-in-fact and for the benefit of the Canadian
Borrowers for the purpose of this Section 2.7(b)(ii) and (z) accordingly,
unless the Canadian Borrowers shall withdraw such appointment or at any
time less than $1,500,000 is available to be borrowed by the Canadian
Borrowers under the Canadian Revolving Loan Commitment and the Canadian
Borrowing Base, all borrowings permitted to be made by the Canadian
Borrowers pursuant to this Section 2.7(b)(ii) shall be made by the Canadian
Agent acting in its capacity as attorney-in-fact for the Canadian
Borrowers. The Lenders hereby acknowledge and consent to the appointment of
the Canadian Agent as attorney-in-fact for the purpose of requesting loans
pursuant to this Section 2.7(b)(ii). All other conditions to borrowings in
this Section 2.7(b)(ii) shall be fully applicable. The Canadian Agent shall
have the right (but not the obligation), prior to requesting any borrowing
hereunder on behalf of the Canadian Borrowers, to require that the Canadian
Borrowers certify in writing that no Event of Default exists at the time of
such borrowing.
Proceeds of Canadian Revolving Loans made pursuant to this Section
2.7(b)(ii) shall be transferred directly to the applicable Canadian Central
Account and applied to the payment of control disbursement checks and other
appropriate charges to such account designated from time to time by the
Canadian Borrowers or as otherwise provided for herein and in the other
Credit Documents. Wire transfers on any Business Day from the Canadian
Central Accounts must be specifically requested by the Canadian Borrowers
by telecopy by no later than 1:00 P.M. (Toronto, Ontario time) on such
Business Day.
If the Canadian Agent advances Canadian Revolving Loans on behalf of
the Canadian Lenders, as provided in the immediately preceding paragraphs,
the amount of outstanding Canadian Revolving Loans and each Canadian
Lender's Canadian Revolving Loan Commitment Percentage thereof shall be
computed weekly rather than daily and shall be adjusted upward or downward
on the basis of the amount of outstanding Canadian Revolving Loans as of
5:00 P.M. on the Business Day immediately preceding the date of each
computation; provided, however, that the Canadian Agent retains the
absolute right at any time or from time to time to make the aforedescribed
adjustments at intervals more frequent than weekly subject to the approval
of the Administrative Agent. The Canadian Agent shall deliver to each of
the Canadian Lenders after the end of each week, or such lesser period or
periods as the Canadian Agent shall determine, a summary
52
59
statement of the amount of outstanding Canadian Revolving Loans for such
period (such week or lesser period or periods being hereafter referred to
as a "Settlement Period"). If the summary statement is sent by the Canadian
Agent and received by the Canadian Lenders prior to 12:00 Noon on any
Business Day each Canadian Lender shall make the transfers described in the
next succeeding sentence no later than 3:00 P.M. on the day such summary
statement was sent; and if such summary statement is sent by the Canadian
Agent and received by the Canadian Lenders after 12:00 Noon on any Business
Day, each Canadian Lender shall make such transfers no later than 3:00 P.M.
on the next succeeding Business Day. If in any Settlement Period, the
amount of a Canadian Lender's Canadian Revolving Loan Commitment Percentage
of the Canadian Revolving Loans is in excess of the amount of Canadian
Revolving Loans actually funded by such Canadian Lender, such Canadian
Lender shall forthwith (but in no event later than the time set forth in
the next preceding sentence) transfer to the Canadian Agent by wire
transfer in immediately available funds the amount of such excess; and, on
the other hand, if the amount of a Canadian Lender's Canadian Revolving
Loan Commitment Percentage of the Canadian Revolving Loans in any
Settlement Period is less than the amount of Canadian Revolving Loans
actually funded by such Canadian Lender, the Canadian Agent shall forthwith
transfer to such Canadian Lender by wire transfer in immediately available
funds the amount of such difference. The obligation of each of the Canadian
Lenders to transfer such funds shall be irrevocable and unconditional and
without recourse to or warranty by the Canadian Agent.
Each of the Canadian Agent and the Canadian Lenders agree to xxxx
their respective books and records at the end of each Settlement Period to
show at all times the dollar amount of their respective Canadian Revolving
Loan Commitment Percentages of the outstanding Canadian Revolving Loans.
Because the Canadian Agent on behalf of the Canadian Lenders may be
advancing and/or may be repaid Canadian Revolving Loans prior to the time
when the Canadian Lenders will actually advance and/or be repaid Canadian
Revolving Loans, interest with respect to Canadian Revolving Loans shall be
allocated by the Canadian Agent to each Canadian Lender (including the
Canadian Agent) in accordance with the amount of Canadian Revolving Loans
actually advanced by and repaid to each Canadian Lender (including the
Canadian Agent) during each Settlement Period and shall accrue from and
including the date such Canadian Revolving Loans are advanced by the
Canadian Agent to but excluding the date such Canadian Revolving Loans are
repaid by the Canadian Borrowers in accordance with Section 4.3 or actually
settled by the applicable Canadian Lender as described in this Section
2.7(b)(ii). For purposes hereof, the Canadian Revolving Loans shall be
deemed paid as and to the extent set forth in Section 3.2(b). All such
Canadian Revolving Loans shall be made as Canadian Base Rate Loans.
(c) All Revolving Loans.
The Canadian Agent shall promptly inform the Administrative Agent and
the Administrative Agent shall promptly inform the Canadian Agent, by
telecopy, of the funding of any Revolving Loan and the terms thereof. No
Lender shall be responsible for the failure or delay by any other Lender in
its obligation to make Revolving Loans
53
60
hereunder; provided, however, that the failure of any Lender to fulfill its
Commitment hereunder shall not relieve any other Lender of its Commitment
hereunder. Unless the Administrative Agent or the Canadian Agent, as the
case may be, shall have been notified by any Lender prior to the date of
any Revolving Loan advance pursuant to a Notice of Borrowing that such
Lender does not intend to make available to the Administrative Agent or the
Canadian Agent, as the case may be, its portion of the Revolving Loan
advance to be made on such date, the Administrative Agent or the Canadian
Agent, as the case may be, may assume that such Lender has made such amount
available to the Administrative Agent or the Canadian Agent, as the case
may be, on the date of such Revolving Loan advance, and the Administrative
Agent or the Canadian Agent, as the case may be, in reliance upon such
assumption, may (in its sole discretion without any obligation to do so)
make available to the applicable Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative
Agent or the Canadian Agent, as the case may be, the Administrative Agent
or the Canadian Agent, as the case may be, shall be entitled to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's or, as
the case may be, the Canadian Agent's demand therefor, the Administrative
Agent or the Canadian Agent, as the case may be, will promptly notify the
applicable Borrower and such Borrower shall immediately pay such
corresponding amount to the Administrative Agent or the Canadian Agent, as
the case may be. The Administrative Agent or the Canadian Agent, as the
case may be, shall also be entitled to recover from such Lender or such
Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Administrative Agent or the Canadian Agent, as the case
may be, to such Borrower to the date such corresponding amount is recovered
by the Administrative Agent or the Canadian Agent, as the case may be, at a
per annum rate equal to the Federal Funds Rate.
2.8 TERM.
The obligation of the Lenders to make Revolving Loans and to issue Banker's
Acceptances shall expire at the Administrative Agent's close of business in
Charlotte, North Carolina on the Maturity Date or such earlier date if the
Commitments are terminated pursuant to Section 11.2. On the Maturity Date, the
entire outstanding principal balance of all amounts outstanding under the U.S.
Revolving Loan Commitment and the Canadian Revolving Loan Commitment, together
with accrued but unpaid interest and all other sums owing under this Agreement,
shall be due and payable in full, unless accelerated sooner pursuant to Section
11.2.
2.9 REVOLVING NOTES.
The Revolving Loans made by each Lender shall be evidenced by a duly
executed promissory note of the applicable Borrower, dated as of the Closing
Date, in an original principal amount equal to such Lender's U.S. Revolving Loan
Commitment or Canadian Revolving Loan Commitment, as applicable, and
substantially in the form of Exhibit F.
2.10 REDUCTION OF REVOLVING LOAN COMMITMENTS.
54
61
Upon at least three (3) Business Days' notice, (a) the Borrowers may, from
time to time, permanently reduce the Canadian Revolving Loan Commitment in whole
or in part; provided that, (i) such reduction must be in a minimum amount of
$1,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no
reduction shall be made which would reduce the Canadian Revolving Loan
Commitment to an amount less than the sum of Canadian Revolving Loans then
outstanding plus Canadian LOC Obligations outstanding plus the aggregate Face
Amount of Bankers' Acceptances; and (b) the U.S. Borrowers may from time to time
permanently reduce the U.S. Revolving Loan Commitment in whole or in part;
provided that, (i) such reduction must be in a minimum amount of $3,000,000 and
in integral multiples of $1,000,000 above such amount and (ii) no reduction
shall be made which would reduce the U.S. Revolving Loan Commitment to an amount
less than the sum of U.S. Revolving Loans then outstanding plus U.S. LOC
Obligations then outstanding. Notwithstanding anything above to the contrary,
once the Canadian Revolving Loan Commitment is reduced to $7,000,000 or the U.S.
Revolving Loan is reduced to $20,000,000, any subsequent permanent reduction of
the Revolving Loan Commitments must be done on a basis such that both the
Canadian Revolving Loan Commitment and the U.S. Revolving Loan Commitment reduce
simultaneously on a pro rata basis.
ARTICLE III
CASH MANAGEMENT ARRANGEMENTS
3.1 U.S. LOCKBOX ARRANGEMENTS.
(a) The U.S. Borrowers shall have each established and shall maintain
one or more lockboxes (each a "U.S. Lockbox") with financial institutions,
including First Union, selected by them and reasonably acceptable to the
Administrative Agent (each a "U.S. Lockbox Bank") and shall instruct all
account debtors on the Accounts of each U.S. Credit Party to remit all
payments to its respective U.S. Lockboxes. All amounts received by the U.S.
Credit Parties from any account debtor, in addition to all other cash
proceeds from the U.S. Collateral, shall be promptly deposited into the
applicable U.S. Lockbox Account (as defined below).
(b) Each U.S. Credit Party, the Administrative Agent and each U.S.
Lockbox Bank shall enter into three party agreements in the form of Exhibit
I-1 hereto (each a "Lockbox Agreement"), providing, among other things, for
the following:
(i) The U.S. Credit Parties will open and establish for the
benefit of the Administrative Agent on behalf of the U.S. Lenders an
account at each U.S. Lockbox Bank (each a "U.S. Lockbox Account").
(ii) All receipts held in the U.S. Lockboxes shall be remitted
daily to the appropriate U.S. Lockbox Account. All funds deposited
into the U.S. Lockbox Accounts on any Business Day shall be
transferred to the applicable First Union Cash Collateral Account. All
funds deposited into the First Union Cash Collateral Accounts on any
Business Day shall be transferred to the First
55
62
Union Account on such Business Day. All funds deposited on any
Business Day to the First Union Account shall be applied by the
Administrative Agent on the following Business Day to reduce the then
outstanding balance of the U.S. Revolving Loans and to pay accrued
interest thereon and to pay any other outstanding Obligations of the
U.S. Borrowers which are then due and payable hereunder; provided that
for the purpose of determining the availability of U.S. Revolving
Loans hereunder, such funds deposited into the First Union Account
shall be deemed to have reduced the outstanding U.S. Revolving Loans
on the Business Day such funds were deposited into such account. All
amounts received directly by the U.S. Credit Parties from any account
debtor, in addition to all other cash proceeds from the U.S.
Collateral, shall be held in trust by the U.S. Credit Parties and
promptly deposited into the applicable U.S. Lockbox Account or, if
made by wire transfer, directly to the First Union Cash Collateral
Account No. 2000007396317.
(iii) All funds deposited into the First Union Account shall
immediately become the property of the Administrative Agent, and the
U.S. Credit Parties shall obtain the agreement by the U.S. Lockbox
Banks to waive any offset rights against the funds so deposited. The
Administrative Agent assumes no responsibility for the U.S. Lockbox
arrangements, including without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by the U.S.
Lockbox Banks thereunder.
(iv) The U.S. Credit Parties may close U.S. Lockboxes and/or open
new U.S. Lockboxes with the prior written consent of the
Administrative Agent and subject to prior execution and delivery to
the Administrative Agent of Lockbox Agreements consistent with the
provisions of this Section 3.1(b) and in form and substance
satisfactory to the Administrative Agent.
(v) Notwithstanding the foregoing to the contrary, with respect
to U.S. Lockboxes and related Lockbox Accounts in existence prior to
the Closing Date, the U.S. Borrowers may, in lieu of entering into a
Lockbox Agreement, deliver a Lockbox Letter, countersigned by the
applicable U.S. Lockbox Bank.
(c) The U.S. Borrowers hereby authorize each U.S. Lender to charge
from time to time against any or all of the U.S. Credit Parties' accounts
with such U.S. Lender any of the Obligations which are then due and payable
by such U.S. Borrowers. Each U.S. Lender receiving any payment as a result
of charging any such account shall promptly notify the Administrative Agent
thereof and make such arrangements as the Administrative Agent shall
request to share the benefit thereof in accordance with Section 4.8.
3.2 CANADIAN COLLECTION AND PAYMENT ARRANGEMENTS.
(a) The Canadian Credit Parties shall have established and shall
maintain one or more accounts (each a "Canadian Local Account") with the
Canadian Agent, naming
56
63
the Administrative Agent as secured party. All amounts received by the
Canadian Credit Parties from any account debtor, in addition to all other
cash proceeds from the Canadian Collateral, shall be promptly deposited
into the applicable Canadian Local Account.
(b) All funds deposited into the Canadian Local Accounts on any
Business Day shall be credited to the applicable Canadian Central Account
(U.S. Dollars to be credited to the Canadian Central Account - US and
Canadian Dollars to be credited to the Canadian Central Account - Cdn). All
good funds credited on any Business Day to the Canadian Central Accounts
shall be applied by the Canadian Agent on the same Business Day to reduce
the then outstanding balance of the Canadian Revolving Loans and to pay
accrued interest thereon and to pay any other outstanding Obligations which
are then due and payable hereunder by the Canadian Borrowers; provided that
for the purpose of determining the availability of Canadian Revolving Loans
hereunder, such funds credited into the Canadian Central Accounts shall be
deemed to have reduced the outstanding Canadian Revolving Loans on the
Business Day such funds were credited to such account. All amounts received
directly by the Canadian Credit Parties from any account debtor, in
addition to all other cash proceeds from the Canadian Collateral, shall be
held in trust by the Canadian Credit Parties and promptly deposited into
the applicable Canadian Local Account.
(c) All funds deposited into the Canadian Local Account or the
Canadian Central Accounts shall immediately become the property of the
Canadian Agent for the benefit of the Administrative Agent on behalf of the
Lenders and the Canadian Agent, in its capacity as depository, hereby
waives any offset rights against the funds so deposited. The Agents assume
no responsibility for the Canadian collection and payment arrangements,
including, without limitation, any claim of accord and satisfaction or
release with respect to deposits accepted by the Canadian Agent, in its
capacity as depository.
(d) The Canadian Borrowers hereby authorize each Canadian Lender to
charge from time to time against any or all of the Canadian Credit Parties'
accounts with such Canadian Lender any of the Obligations which are then
due and payable by such Canadian Borrowers. Each Canadian Lender receiving
any payment as a result of charging any such account shall promptly notify
the Canadian Agent thereof and make such arrangements as the Agents shall
request to share the benefit thereof in accordance with Section 4.8.
3.3 MAINTENANCE OF ACCOUNT.
Each Agent shall maintain an account on its books in the name of the U.S.
Borrowers or the Canadian Borrowers, as applicable, in which such Borrowers will
be charged with all loans and advances made by the applicable Lenders to such
Borrowers or for such Borrowers' account, including the Revolving Loans, the LOC
Obligations, the BA Obligations and any other Obligations, including any and all
costs, expenses and attorney's fees which the Agents may incur, including,
without limitation, in connection with the exercise by or for the Lenders of any
of the rights or powers herein conferred upon the Agents (other than in
connection with any
57
64
assignments or participations by any Lender) or in the prosecution or defense of
any action or proceeding by or against any Borrower, any other Credit Party or
the Lenders concerning any matter arising out of, connected with, or relating to
this Credit Agreement or the Accounts, or any Obligations owing to the Lenders
by any Borrower. The Borrowers will be credited in accordance with Section 3.1
or 3.2 above, as applicable, with all amounts received by the Lenders from the
Borrowers or from others for the Borrowers' account, including, as above set
forth, all amounts received by the Agents in payment of Accounts. In no event
shall prior recourse to any Accounts or other Collateral be a prerequisite to an
Agent's right to demand payment of any Obligation upon its maturity. Further, it
is understood that the Agents shall have no obligation whatsoever to perform in
any respect any of the Credit Parties' contracts or obligations relating to the
Accounts.
3.4 STATEMENT OF ACCOUNT
After the end of each month the Agents shall send the applicable Borrowers
(directed to the Borrowers' Toronto, Ontario office in the case of the Canadian
Borrowers and to the Borrowers' San Antonio, Texas office in the case of the
U.S. Borrowers, with a copy to the Borrowers' Toronto, Ontario office) a
statement showing the accounting for the charges, loans, advances and other
transactions occurring between the Lenders and the applicable Borrowers during
that month. The monthly statements, absent manifest error, shall be deemed
correct and binding upon the applicable Borrowers and shall constitute an
account stated between the applicable Borrowers and the Lenders unless the
applicable Agent receives a written statement of the applicable Borrowers'
exceptions within thirty (30) days after same is mailed to the applicable
Borrowers.
58
65
ARTICLE IV
ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT
4.1 CONTINUATIONS AND CONVERSIONS.
(a) U.S. Borrowers. The U.S. Borrowers shall have the option, on any
Business Day, to continue an existing Eurodollar Loan into a subsequent
Interest Period, to convert a Base Rate Loan into a Eurodollar Loan or to
convert a Eurodollar Loan into a Base Rate Loan; provided, however, that
(i) each such continuation must be requested by the U.S. Borrowers pursuant
to a written Notice of Continuation/Conversion, in the form of Exhibit D,
in compliance with the terms set forth below and (ii) except as provided in
Section 4.11, Eurodollar Loans may be converted into Base Rate Loans only
on the last day of an Interest Period applicable thereto; (iii) Eurodollar
Loans may be continued and Base Rate Loans may be converted into Eurodollar
Loans only if no Default or Event of Default is in existence on the date of
continuation or conversion; and (iv) failure by the U.S. Borrowers to
properly continue a Eurodollar Loan at the end of an Interest Period shall
be deemed a conversion to a Base Rate Loan. Each continuation or conversion
must be requested by the U.S. Borrowers, directed to the Administrative
Agent at the address set forth on Schedule 1.1A hereto, no later than
11:00 a.m., (A) on the date of a requested conversion of a Eurodollar Loan
to a Base Rate Loan or (B) three (3) Business Days prior to the date of a
requested continuation of a Eurodollar Loan or conversion of a Base Rate
Loan to a Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which shall
set forth (x) whether the applicable U.S. Borrower wishes to continue or
convert such Loans and (y) if the request is to continue a Eurodollar Loan
or convert a Base Rate Loan to a Eurodollar Loan, the Interest Period
applicable thereto. The Administrative Agent shall give each U.S. Lender
notice as promptly as practicable of any such proposed extension or
conversion pursuant to this section.
(b) Canadian Borrowers.
(i) The Canadian Borrowers shall have the option, on any Business
Day, to continue an existing Eurodollar Loan into a subsequent
Interest Period, to convert a CA U.S. Base Rate Loan into a Eurodollar
Loan or to convert a Eurodollar Loan into a CA U.S. Base Rate Loan;
provided, however, that (A) each such continuation must be requested
by the Canadian Borrowers, directed to the Canadian Agent at the
address set forth on Schedule 1.1A hereto, pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit D, in
compliance with the terms set forth below and (B) except as provided
in Section 4.11, Eurodollar Loans may be converted into CA U.S. Base
Rate Loans only on the last day of an Interest Period applicable
thereto; (C) Eurodollar Loans may be continued and CA U.S. Base Rate
Loans may be converted into Eurodollar Loans only if no Default or
Event of Default is in existence on the date of continuation or
conversion; and (D) failure by the Canadian Borrowers to properly
continue a Eurodollar Loan at the end of an Interest Period shall be
deemed a conversion to a CA U.S. Base Rate Loan. Each
59
66
continuation or conversion must be requested by the Canadian Borrowers
no later than 11:00 a.m., Toronto, Ontario time, (x) on the date of a
requested conversion of a Eurodollar Loan to a Base Rate Loan or (y)
three (3) Business Days prior to the date of a requested continuation
of a Eurodollar Loan or conversion of a CA U.S. Base Rate Loan to a
Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Canadian Agent which shall
set forth (1) whether the Canadian Borrowers wish to continue or
convert such Loans and (2) if the request is to continue a Eurodollar
Loan or convert a CA U.S. Base Rate Loan to a Eurodollar Loan, the
Interest Period applicable thereto. The Canadian Agent shall give each
Canadian Lender notice as promptly as practicable of any such proposed
extension or conversion pursuant to this section.
(ii) The Canadian Borrowers shall have the option, on any
Business Day, to convert a Canadian Prime Rate Loan into a Bankers'
Acceptance, to continue a maturing Bankers' Acceptance in accordance
with Section 2.5 or to convert a maturing Bankers' Acceptance into a
Canadian Prime Rate Loan; provided, however, (A) each such
continuation or conversion must be requested by the Canadian Borrowers
pursuant to an irrevocable notice to the Canadian Agent, substantially
in the form of Exhibit D, in compliance with the terms set forth
below, (B) the Canadian Borrowers must comply with all the
requirements of Section 2.5, and (C) failure by the Canadian Borrowers
to properly continue a Bankers' Acceptance shall be deemed a
conversion to a Canadian Prime Rate Loan. Each continuation or
conversion must be requested by the Canadian Borrowers no later than
11:00 a.m., Toronto, Ontario time, (x) one Business Day prior to the
date of a requested conversion of a Bankers' Acceptance to a Canadian
Prime Rate Loan or (y) one Business Day prior to the date of a
requested continuation of a Bankers' Acceptance or conversion of a
Canadian Prime Rate Loan to a Bankers' Acceptance, in each case
pursuant to an irrevocable notice submitted to the Canadian Agent
which shall set forth (1) that the Loans to be continued or converted
are Canadian Prime Rate Loans, (2) whether the Canadian Borrowers wish
to continue or convert such Loans and (3) if the request is to
continue a Bankers' Acceptance or convert a Canadian Prime Rate Loan
to a Bankers' Acceptance, the maturity date applicable thereto. The
Canadian Agent shall give each Canadian Lender notice as promptly as
practicable of any such proposed continuation or conversion pursuant
to this Section.
4.2 INTEREST.
(a) Interest Rate. All U.S. Base Rate Loans shall accrue interest at
the U.S. Base Rate, plus the Applicable Percentage. All Canadian Prime Rate
Loans shall accrue interest at the Canadian Prime Rate, plus the Applicable
Percentage, payable in Canadian Dollars. All CA U.S. Base Rate Loans shall
accrue interest at the CA U.S. Base Rate, plus the Applicable Percentage,
payable in U.S. dollars. All Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate for the applicable Interest Period.
60
67
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing (but
not timely paid) hereunder or under the other Credit Documents (including
without limitation fees and expenses) shall bear interest, payable on
demand, at a per annum rate equal to the U.S. Base Rate, plus the sum of
the Tier Xxxxx 0 Xxxxxxxxxx Xxxxxxxxxx for Base Rate Loans and two percent
(2%) per annum; provided, that the default rate of interest set forth
herein shall apply in the case of an Event of Default other than an Event
of Default occurring under Section 11.1(a), (c)(i), (f) and (j) only at the
direction of the Required Lenders.
(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls on
a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding day.
(d) Computation of Interest. All computations of interest hereunder on
Eurodollar Loans and U.S. Base Rate Loans shall be made on the basis of the
actual number of days elapsed over a year of 360 days. All computations of
interest hereunder on all other Loans shall be made on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case
may be.
(e) Interest Act (Canada). Each Borrower hereby acknowledges that the
rate or rates of interest applicable to certain of the Loans and fees as
specified hereunder may be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed. For purposes of the Interest
Act (Canada), if interest computed on the basis of a 360-day year is
payable for any part of the calendar year, the equivalent yearly rate of
interest may be determined by multiplying the specified rate of interest by
the number of days (365 or 366) in such calendar year and dividing such
product by 360.
4.3 PLACE AND MANNER OF PAYMENTS.
All payments of principal, interest and fees in connection with the
Canadian Revolving Loans, BA Obligations and Canadian LOC Obligations shall be
made by the Borrowers to the Canadian Agent at its offices located at the
address set forth on Schedule 1.1A hereto on the date due by 2:00 p.m., Toronto,
Ontario time, (in Canadian Dollars or U.S. Dollars, as applicable) in
immediately available funds or by direct charge against the Canadian Revolving
Loan Commitment, if available, pursuant to Section 3.2(b) hereof, in each case,
without setoff, deduction, counterclaim or withholding of any kind. All other
payments of principal, interest, fees, expenses and other amounts to be made by
the Borrowers under this Agreement (including, but not limited to, the U.S.
Revolving Loans) shall be received not later than 2:00 p.m., Charlotte, North
Carolina time, on the date when due in U.S. Dollars and in immediately available
funds or by direct charge against the U.S. Revolving Loan Commitment, if
available, pursuant to Section 3.1(b) hereof, in each case, without setoff,
deduction, counterclaim or withholding of any kind, by the Administrative Agent
at its offices located at the address set forth on Schedule 1.1A hereto. A
Borrower shall, at the time it makes any payment under this Agreement, specify
to the Administrative Agent, or the
61
68
Canadian Agent as applicable, the Loans, Letters of Credit, fees or other
amounts payable by the Borrowers hereunder to which such payment is to be
applied (and in the event that it fails to specify, or if such application would
be inconsistent with the terms hereof, the Administrative Agent, or the Canadian
Agent as applicable, shall distribute such payment to the Lenders in the manner
described in Section 4.6). The Canadian Agent shall inform the Administrative
Agent and the Administrative Agent shall inform the Canadian Agent, by telecopy
as of the first Business Day of each month, of all principal, interest or fees
received from the Borrowers during the prior month, except for fees received
pursuant to Section 4.5(c). The Administrative Agent or the Canadian Agent, as
applicable, will distribute such payments to the applicable Lenders on the date
of receipt if any such payment is received prior to 2:00 p.m. (Charlotte, North
Carolina time or Toronto, Ontario time, as applicable); otherwise the
Administrative Agent or the Canadian Agent, as applicable, will distribute such
payment to the applicable Lenders on the next succeeding Business Day. The
Borrowers' obligations to the Lenders with respect to such payments shall be
discharged by making such payments to the applicable agent pursuant to this
Section 4.3 or if not timely paid or an Event of Default then exists, may be
added to the principal amount of the Revolving Loans outstanding. Whenever any
payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day.
4.4 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrowers shall have the right to
prepay Revolving Loans and Bankers' Acceptances in whole or in part from
time to time without premium or penalty; provided, however, that (i)
Eurodollar Loans may only be prepaid on three (3) Business Day's prior
written notice to the Administrative Agent or the Canadian Agent, as the
case may be, and any prepayment of Eurodollar Loans will be subject to
Section 4.14, (ii) each such partial prepayment of Eurodollar Loans shall
be in the minimum principal amount of $1,000,000, and (iii) that portion of
the Canadian Revolving Loan Commitment subject to the creation of a
Bankers' Acceptance may be prepaid prior to the maturity of such Bankers'
Acceptance only in accordance with Section 2.5(g). Amounts prepaid
hereunder shall be applied as the Borrowers may elect; provided, that (A)
if the U.S. Borrowers shall fail to specify a voluntary prepayment as to
the U.S. Revolving Loans then such prepayment shall be applied first to
U.S. Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities and (B) if the Canadian Borrowers shall fail to
specify a voluntary prepayment as to the Canadian Revolving Loans or
Bankers' Acceptances, then such prepayments shall be applied (1) in the
case of funds received in Canadian Dollars, to the Canadian Revolving Loans
and Banker's Acceptances (first to Canadian Prime Rate Loans and then to
Bankers' Acceptances in direct order of maturities) and (2) in the case of
funds received in U.S. Dollars, to the Canadian Revolving Loans (first to
CA U.S. Base Rate Loans and then to Eurodollar Loans, in direct order of
Interest Period maturities).
(b) Mandatory Prepayments.
62
69
(i) Revolving Loan Overadvance. If, at any time (A) the sum of
U.S. Revolving Loans outstanding plus Canadian Revolving Loans
outstanding plus LOC Obligations plus BA Obligations exceeds the
lesser of the Total Borrowing Base and $40,000,000; (B) the U.S.
Revolving Loans outstanding plus the U.S. LOC Obligations outstanding
exceed the lesser of the U.S. Borrowing Base and the U.S. Revolving
Loan Commitment; or (C) the Canadian Revolving Loans outstanding plus
Canadian LOC Obligations outstanding plus BA Obligations exceed the
lesser of the Canadian Borrowing Base and the Canadian Revolving Loan
Commitment, then the Borrowers (or the applicable Borrower) shall
immediately make a payment in an amount equal to the net deficiency.
Payments made under (A) shall be applied first pro rata to U.S. Base
Rate Loans and Canadian Base Rate Loans and then to Eurodollar Loans
(pro rata between those made under the Canadian Revolving Loan
Commitment and the U.S. Revolving Loan Commitment) in direct order of
Interest Period maturities and then to Bankers' Acceptances in direct
order of Interest Period maturities. Payments made under (B) shall be
applied first to U.S. Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. Payments made under (C)
shall be applied first to Canadian Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period maturities and
then to Bankers' Acceptances in direct order of Interest Period
maturities. Prepayments made on Bankers' Acceptances shall be made in
accordance with Section 2.5(g).
(ii) Asset Sales. Immediately upon the receipt by any Credit
Party of proceeds from any Asset Disposition, the Borrowers shall
prepay the Loans in an amount equal to 100% of the Net Proceeds of
such Asset Disposition (such prepayment to be applied as set forth in
Section 4.4(c) below).
(iii) Casualty Loss. To the extent of cash proceeds received in
connection with a Casualty Loss by any Credit Party, the Borrowers
shall prepay the Loans in an amount equal to one hundred percent
(100%) of such cash proceeds if the Administrative Agent shall have
elected to apply the proceeds realized from such Casualty Loss to the
prepayment of the Loans (such prepayment to be applied as set forth in
Section 4.4(c) below).
(c) Application of Certain Prepayments. All amounts required to prepay
Loans pursuant to Section 4.4(b)(ii) or (iii) above shall be applied (i)
for an Asset Disposition or Casualty Loss in connection with U.S.
Collateral, to the U.S. Revolving Loans (first to Base Rate Loans and then
to Eurodollar Loans in direct order of maturities) and (ii) for an Asset
Disposition or Casualty Loss in connection with the Canadian Collateral,
(A) in the case of proceeds received in Canadian Dollars, to the Canadian
Revolving Loans and Banker's Acceptances (first to Canadian Prime Rate
Loans and then to Bankers' Acceptances in direct order of maturities) and
(B) in the case of proceeds received in U.S. Dollars, to the Canadian
Revolving Loans (first to CA U.S. Base Rate Loans and then to Eurodollar
Loans, in direct order of maturities). All prepayments shall be subject to
Section 4.14. Payments on Loans denominated in U.S. Dollars shall be made
in U.S. Dollars and payments on Loans denominated in Canadian Dollars shall
be made in Canadian Dollars.
63
70
4.5 FEES.
(a) Non-Use Fees. In consideration of the Revolving Loan Commitments
being made available by the Lenders hereunder, (i) the U.S. Borrowers agree
to pay to the Administrative Agent, for the account of the U.S. Lenders, a
per annum fee equal to the Applicable Percentage for the Non-Use Fees
(calculated on the basis of the actual number of days elapsed in a 360 day
year) on the U.S. Unutilized Revolving Commitment and (ii) the Canadian
Borrowers agree to pay to the Canadian Agent, for the account of the
Canadian Lenders, a per annum fee equal to the Applicable Percentage for
the Non-Use Fees (calculated on the basis of the actual number of days
elapsed in a 365 or 366 day year, as the case may be) on the Canadian
Unutilized Revolving Commitment (collectively, the "Non-Use Fees"). The
accrued Non-Use Fees shall be due and payable monthly in arrears on the
last day of each calendar month (as well as on the Maturity Date and on any
date that a Revolving Loan Commitment is reduced) for the month then ending
(or portion thereof), beginning with the first of such dates to occur after
the Closing Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the issuance of
Letters of Credit hereunder, the U.S. Borrowers agree to pay to the
applicable Issuing Lender in respect of outstanding U.S. Letters of
Credit for the pro rata benefit of the U.S. Lenders (based on each
U.S. Lender's U.S. Revolving Loan Commitment Percentage of the U.S.
Revolving Loan Commitment (calculated on the basis of the actual
number of days elapsed in a 360 day year)) and, the Canadian Borrowers
agree to pay to the applicable Issuing Lender in respect of
outstanding Canadian Letters of Credit for the pro rata benefit of the
Canadian Lenders (based on each Canadian Lender's Canadian Revolving
Loan Commitment Percentage of the Canadian Revolving Commitment
(calculated on the basis of the actual number of days elapsed in a 365
or 366 day year, as the case may be)), an annual fee (the "Letter of
Credit Fee") equal to the Applicable Percentage for the Letter of
Credit Fee on the average daily maximum amount available to be drawn
under each such Letter of Credit from the date of issuance to the date
of expiration. The Letter of Credit Fee will be payable monthly in
arrears on the last day of each calendar month and on the Maturity
Date.
(ii) Issuing Lender Fee. In addition to the Letter of Credit Fees
payable pursuant to subsection (i) above, each of the Borrowers shall
pay to the applicable Issuing Lender for its own account, without
sharing by the other Lenders, a fee equal to one-eighth of one percent
(0.125%) per annum on the total sum of all Letters of Credit issued by
the Issuing Lender, such fee to be paid monthly in arrears on the last
day of each calendar month (as well as on the Maturity Date) (the
"Issuing Lender Fee").
64
71
(c) Administrative Fees. The U.S. Borrowers agree to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the U.S. Borrowers and the Administrative Agent in the
Administrative Agent Fee Letter.
(d) Authorization to Charge Account. The Borrowers hereby authorize
the Administrative Agent or the Canadian Agent, as the case may be, to
charge the Borrowers' Revolving Loan accounts with the amount of all
payments and fees due hereunder to the Lenders, the Administrative Agent,
the Canadian Agent and the Issuing Lender as and when such payments become
due. The Borrowers confirm that any charges which the applicable Agent may
so make to the Borrowers' Revolving Loan accounts as herein provided will
be made as an accommodation to the Borrowers and solely at the applicable
Agent's discretion.
4.6 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each creation of Bankers'
Acceptances, each payment or prepayment of principal of any Loan, each
payment of fees (other than the Issuing Lender Fee retained by each of the
Issuing Lenders for its own account and the administrative fees retained by
the Administrative Agent and the Canadian Agent for its own account), each
reduction of the U.S. Revolving Loan Commitment or the Canadian Revolving
Loan Commitment, and each conversion or continuation of any Loan, shall be
allocated pro rata among the relevant Lenders in accordance with the
respective U.S. Revolving Loan Commitment Percentages or Canadian Revolving
Loan Commitment Percentages, as applicable, of such Lenders; it being
understood that payments under the U.S. Revolving Loans shall be allocated
pro rata among the U.S. Lenders and payments under the Canadian Revolving
Loans shall be allocated pro rata among the Canadian Lenders (or, if the
Commitments of such Lenders have expired or been terminated, in accordance
with the respective principal amounts of the outstanding Loans, Bankers'
Acceptances and Participation Interests of such Lenders); provided that, if
any Lender shall have failed to pay its applicable pro rata share of any
Revolving Loan, then any amount to which such Lender would otherwise be
entitled pursuant to this subsection (a) shall instead be payable to the
Administrative Agent or the Canadian Agent, as applicable; provided
further, that in the event any amount paid to any Lender pursuant to this
subsection (a) is rescinded or must otherwise be returned by the
Administrative Agent or the Canadian Agent, as applicable, each Lender
shall, upon the request of the Administrative Agent or the Canadian Agent,
as applicable, repay to the Administrative Agent or the Canadian Agent, as
applicable the amount so paid to such Lender, with interest for the period
commencing on the date such payment is returned by the Administrative Agent
or the Canadian Agent, as applicable until the date the Administrative
Agent or the Canadian Agent, as applicable receives such repayment at a
rate per annum equal to, during the period to but excluding the date two
(2) Business Days after such request, the Federal Funds Rate, and
thereafter, the U.S. Base Rate plus two percent (2%) per annum; and
65
72
(b) Letters of Credit. Each payment of unreimbursed drawings in
respect of LOC Obligations shall be allocated to each U.S. Lender pro rata
in accordance with its U.S. Lender Revolving Loan Commitment Percentage or
to each Canadian Lender pro rata in accordance with its Canadian Lender
Revolving Loan Commitment Percentage, as appropriate; provided that, if any
Lender shall have failed to pay its applicable pro rata share of any
drawing under any Letter of Credit, then any amount to which such Lender
would otherwise be entitled pursuant to this subsection (b) shall instead
be payable to the Issuing Lender; provided further, that in the event any
amount paid to any Lender pursuant to this subsection (b) is rescinded or
must otherwise be returned by the Issuing Lender, each Lender shall, upon
the request of the Issuing Lender, repay to the Administrative Agent for
the account of the Issuing Lender the amount so paid to such Lender, with
interest for the period commencing on the date such payment is returned by
the Issuing Lender until the date the Issuing Lender receives such
repayment at a rate per annum equal to, during the period to but excluding
the date two (2) Business Days after such request, the Federal Funds Rate,
and thereafter, the U.S. Base Rate, plus two percent (2%) per annum.
4.7 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by an Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agents in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agents with
respect to the Collateral under or pursuant to the terms of the Security
Documents;
SECOND, to payment of any fees owed to an Agent or an Issuing Lender
hereunder or under any other Credit Document;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to the
Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the Loans
and to the payment or cash collateralization of the outstanding LOC
Obligations and BA Obligations, pro rata, as set forth below;
SIXTH, to all other Obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FIFTH" above;
66
73
SEVENTH, to all other Obligations which shall have become due and
payable and not repaid pursuant to clauses "FIRST" through "SIXTH" above;
and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, LOC
Obligations and BA Obligations held by such Lender bears to the aggregate then
outstanding Loans, LOC Obligations and BA Obligations) of amounts available to
be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above;
and (c) to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Administrative
Agent in a cash collateral account and applied (x) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of Credit
and (y) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH", "SIXTH" and "SEVENTH"
above in the manner provided in this Section 4.7 and in the Security Documents.
4.8 SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan or Bankers' Acceptance, unreimbursed drawing with respect to any LOC
Obligations or any other obligation owing to such Lender under this Agreement
through the exercise of a right of setoff, banker's lien or counterclaim, or
pursuant to a secured claim under Section 506 of the U.S. Bankruptcy Code (or
similar provision of the Canadian bankruptcy laws) or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Agreement, such Lender shall promptly pay in cash or purchase from the
other applicable Lenders a participation in such Loans, LOC Obligations, BA
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Agreement. The Lenders further agree among themselves that
if payment to a Lender obtained by such Lender through the exercise of a right
of setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each applicable Lender which shall have
shared the benefit of such payment shall, by payment in cash or a repurchase of
a participation theretofore sold, return its share of that benefit (together
with its share of any accrued interest payable with respect thereto) to each
Lender whose payment shall have been rescinded or otherwise restored. The
Borrowers agree that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan, LOC Obligation, BA
Obligation or other obligation in the amount of such participation. Except as
otherwise expressly provided in this Agreement, if any Lender or an Agent shall
fail to remit to an Agent or any other Lender an amount payable by such
67
74
Lender or such Agent to such Agent or such other Lender pursuant to this
Agreement on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to such Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 4.8 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 4.8 to share in the
benefits of any recovery on such secured claim.
4.9 CAPITAL ADEQUACY.
If, after the date hereof, any Lender has determined that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender, or its parent corporation, with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's (or parent corporation's) capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's (or parent corporation's) policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrowers, the Borrowers shall be
obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender on an after-tax basis (after taking into account
applicable deductions and credits in respect of the amount indemnified) for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
4.10 INABILITY TO DETERMINE INTEREST RATE OR CREATE BANKERS' ACCEPTANCES.
(a) If prior to the first day of any Interest Period, (i) the
Administrative Agent shall have determined in good faith (which
determination shall be conclusive and binding upon the Borrowers) 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, (ii) the Administrative Agent has received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders of making or maintaining their Eurodollar Loans during such
Interest Period, or (iii) U.S. Dollar deposits in the principal amounts of
the Eurodollar Loans to which such Interest Period is to be applicable are
not generally available in the London interbank market, the Administrative
Agent shall give telecopy or telephonic notice thereof to the Borrowers and
the Lenders as soon as practicable thereafter, and will also give prompt
written notice to the Borrowers when such conditions no longer exist. If
such notice is given, (A) any Eurodollar Loans requested to be made on the
first day of such Interest Period shall be made as Base Rate Loans, (B) any
Revolving Loans that were to have been converted on
68
75
the first day of such Interest Period to or continued as Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (C) each
outstanding Eurodollar Loan shall be converted, on the last day of the
then-current Interest Period thereof, to Base Rate Loans. Until such notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans
shall be made or continued as such, nor shall the Borrowers have the right
to convert Base Rate Loans to Eurodollar Loans.
(b) If the Canadian Agent determines in good faith, which
determination shall be final, conclusive and binding upon the Canadian
Borrowers absent manifest error, and notifies the Canadian Borrowers and
each of the Canadian Lenders that, by reason of circumstances affecting the
money market (i) there is no market for Bankers' Acceptances; or (ii) the
demand for Bankers' Acceptances is insufficient to allow the sale or
trading of the Bankers' Acceptances created and purchased hereunder, then,
(A) the right of the Canadian Borrowers to request a borrowing by
way of Bankers' Acceptances shall be suspended until the Canadian
Agent determines in good faith that the circumstances causing such
suspension no longer exist and the Canadian Agent so notifies the
Canadian Borrowers;
(B) any notice of requested Bankers' Acceptances which is
outstanding shall be canceled and the Bankers' Acceptance requested
therein shall not be made; and
(C) the Canadian Agent shall promptly notify the Canadian
Borrowers of the suspension of the Canadian Borrowers' right to
request a Bankers' Acceptance and of the termination of any such
suspension.
4.11 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Agreement, (a) such Lender
shall promptly give written notice of such circumstances to the Borrowers and
the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be suspended and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 4.14.
4.12 REQUIREMENTS OF LAW.
69
76
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, 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, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit or any Loans made or issued by it or its
obligation to make or issue any of the foregoing, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 4.13 and changes in taxes measured by
or imposed upon the overall net income, or franchise tax imposed in lieu of
such net income tax, of such Lender or its applicable lending office,
branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate or the Acceptance Fee in respect of Bankers'
Acceptances hereunder; or
(c) shall impose on such Lender any other condition (excluding any tax
of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender, acting reasonably, deems to be material, of
making, converting into, continuing or maintaining Loans or issuing or
participating in Letters of Credit or creating or accepting Bankers' Acceptances
or to reduce any amount receivable hereunder in respect thereof, then, in any
such case, upon notice to the Borrowers from such Lender, through either of the
Agents, in accordance herewith, the Borrowers shall be obligated to promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender on an after-tax basis (after taking into account applicable
deductions and credits in respect of the amount indemnified) for such increased
cost or reduced amount receivable, provided that, in any such case, the
Borrowers may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Administrative Agent at least one (1)
Business Day's notice of such election, in which case the Borrowers shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 4.14. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 4.12, it shall provide
prompt notice thereof to the Borrowers, through the Administrative Agent,
certifying (x) that one of the events described in this Section 4.12 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section 4.12 submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive and binding on the
70
77
parties hereto 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.
4.13 TAXES.
(a) Except as provided below in this Section 4.13, all payments made
by the Borrowers under this Agreement, any Notes and any documents relating
hereto 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 court, or governmental body, agency or other official,
including interest, penalties and liabilities with respect thereto
("Taxes"), excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any branch or
affiliate thereof, and all franchise taxes, branch taxes, taxes on doing
business or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under
the laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal executive
office is located, or any nation within which such jurisdiction is located
or any political subdivision thereof; or (ii) by reason of any connection
between the jurisdiction imposing such tax and such Lender, applicable
lending office, branch or affiliate other than a connection arising solely
from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Agreement or any Notes. If any
such non-excluded Taxes, ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to an Agent or any Lender hereunder or under any
Notes or other documents relating thereto, (A) the Borrowers shall withhold
and remit such Taxes to the relevant authority when and as due, (B) the
amounts so payable to an Agent or such Lender shall be increased to the
extent necessary to yield to an Agent or such Lender (after payment of all
Non-Excluded Taxes, including Non-Excluded Taxes in respect of additional
amounts payable hereunder) interest or any such other amounts payable
hereunder or under the Notes or any other document relating hereto at the
rates or in the amounts specified in this Agreement and any Notes,
provided, however, that the Borrowers shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to increase any
such amounts payable to any Lender that is not organized under the laws of
the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section 4.13 whenever
any Non-Excluded Taxes are payable by the Borrowers, and (C) as promptly as
possible thereafter the Borrowers shall send to such Agent for its own
account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrowers showing
prompt payment thereof. If the Borrowers fail to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrowers shall indemnify an Agent and any Lender for any
incremental Taxes, interest or penalties that may become payable by an
Agent or any Lender as a result of any such failure. If a Lender shall
change its office that makes or maintains a Loan hereunder, the Borrowers
shall not be required to pay any increased amounts to the Lender in respect
of any Non-Excluded Taxes pursuant to this
71
78
subsection 4.13 over and above any obligation to withhold or deduct any
amount with respect to such Non-Excluded Taxes that existed on the date the
Lender changed such office, unless the Lender changed the office at the
request of the Borrowers in which case the Borrower shall indemnify the
Lender in respect of such increased amounts. The agreements in this
subsection shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the U.S.
Borrowers under this Agreement or Notes to such Lender, deliver to the
U.S. Borrowers and the Administrative Agent (x) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that it is
entitled to receive payments under this Agreement and any Notes
without deduction or withholding of any United States federal income
taxes and (y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding tax;
(B) deliver to the U.S. Borrowers and the Administrative Agent
two further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the U.S. Borrowers; and
(C) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the U.S.
Borrowers or the Administrative Agent; or
(ii) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (A)
represent to the U.S. Borrowers (for the benefit of the U.S. Borrowers
and the Administrative Agent) that it is not a bank within the meaning
of Section 881(c)(3)(A) of the Internal Revenue Code, (B) agree to
furnish to the U.S. Borrowers, on or before the date of any payment by
the U.S. Borrowers, with a copy to the Administrative Agent, two
accurate and complete original signed copies of Internal Revenue
Service Form W-8, or successor applicable form certifying to such
Lender's legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions of Section
881(c) of the Internal Revenue Code with respect to payments to be
made under this Agreement and any Notes (and to deliver to the U.S.
Borrowers and the Administrative Agent two further copies of such form
on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the U.S. Borrowers or the Administrative Agent
for filing and completing such forms), and (C) agree, to the
72
79
extent legally entitled to do so, upon reasonable request by the U.S.
Borrowers, to provide to the U.S. Borrowers (for the benefit of the
U.S. Borrowers and the Administrative Agent) such other forms as may
be reasonably required in order to establish the legal entitlement of
such Lender to an exemption from withholding with respect to payments
under this Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such
Lender so advises the U.S. Borrowers and the Administrative Agent then such
Lender shall be exempt from such requirements. Each Person that shall
become a Lender or a participant of a Lender pursuant to Section 14.3
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required pursuant
to this subsection (b); provided that in the case of a participant of a
Lender, the obligations of such participant of a Lender pursuant to this
subsection (b) shall be determined as if the participant of a Lender were a
Lender except that such participant of a Lender shall furnish all such
required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
(c) If any such Taxes shall be or become applicable after the date of
this Agreement to such payments by the Borrowers to a Lender, such Lender
shall use reasonable efforts to make, fund or maintain the Loan or Loans,
as the case may be, through another lending office located in another
jurisdiction so as to reduce, to the fullest extent possible, the
Borrowers' liability hereunder, if the making, funding or maintenance of
such Loan or Loans through such other office does not, in the reasonable
judgment of the Lender, materially affect the Lender of such Loan. If the
Borrowers are required to make any additional payment to a Lender pursuant
to this Section 4.13, and any such Lender receives, or is entitled to
receive, a credit against, remission for, or repayment of, any tax paid or
payable by it in respect of, or calculated with reference to, the taxes
giving rise to such payment, such Lender shall, within a reasonable time
after it receives such credit, relief, remission or repayment, reimburse
the Borrowers the amount of any such credit, relief, remission or
repayment.
4.14 COMPENSATION.
The Borrowers promise to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by a Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans or in creating Bankers' Acceptances
after such Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by a Borrower in making any
prepayment of a Eurodollar Loan after such Borrower has given a notice thereof
in accordance with the provisions of this Agreement and (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto or the repayment of a Bankers' Acceptance prior to
its maturity date. Such indemnification may include an amount equal to (i) the
present value of the amount of interest which would have accrued on the amount
so prepaid, or not so borrowed,
73
80
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 the applicable
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 Eurodollar Loans provided
for herein (excluding, however, the Applicable Percentage included therein, if
any) minus (ii) the amount of interest (as reasonably determined by such Lender)
which 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. Such a certificate as to any amounts payable pursuant to this Section
4.14 submitted by a Lender, through the Administrative Agent to the Lenders,
shall be conclusive and binding in the absence of manifest error. The agreements
in this Section shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
4.15 REPLACEMENT LENDER.
If (a) any Lender has demanded compensation or indemnification pursuant to
Section 4.9, 4.12 or 4.13, (b) the obligation of any Lender to make Eurodollar
Loans has been suspended pursuant to Section 4.11 or (c) any Lender is a
Defaulting Lender, the Borrowers shall have the right, if no Default or Event of
Default then exists, to replace such Lender (the "Retiring Lender") with one or
more Eligible Assignees (each a "Replacement Lender" and, collectively, the
"Replacement Lenders") acceptable to the Administrative Agent. The replacement
of a Retiring Lender pursuant to this Section 4.15 shall be effective on the
tenth Business Day (the "Replacement Date") following the date of notice of such
replacement to the Retiring Lender and each other Lender through the
Administrative Agent, subject to the satisfaction of the following conditions:
(i) the Retiring Lender and the Replacement Lender shall have
satisfied the conditions to assignment and assumption set forth in Section
14.3 (with all fees payable pursuant to Section 14.3 to be paid by the
Borrowers) and, in connection therewith, the Replacement Lender(s) shall
pay:
(ii) to the Retiring Lender an amount equal in the aggregate to the
sum of (w) the principal of, and all accrued but unpaid interest on, all
outstanding Loans of the Retiring Lender, (x) all unpaid BA Obligations,
(y) all unpaid LOC Obligations, together with all accrued but unpaid
interest with respect thereto and (z) all accrued but unpaid fees owing to
the Retiring Lender pursuant to Section 4.5, and
(iii) to the Issuing Lenders an amount equal to the aggregate amount
owing by the Retiring Lender to the Issuing Lenders as reimbursement for
drawings under Letters of Credit, to the extent such amount was not
theretofore funded by such Retiring Lender; and
(iv) the Borrowers shall have paid to the Administrative Agent for the
account of the Retiring Lender an amount equal to all obligations owing to
the Retiring Lender by the Borrowers pursuant to this Agreement and the
other Credit Documents.
74
81
On the Replacement Date, each Replacement Lender shall become a Lender
hereunder, and the Retiring Lender shall cease to constitute a Lender hereunder;
provided that the provisions of this Agreement (including, without limitation,
the provisions of Sections 4.9, 4.12, 4.13, 4.14 and 14.5) shall continue to
govern the rights and obligations of a Retiring Lender with respect to any Loans
made, any Letters of Credit issued or participated in, any Bankers' Acceptances
issued or participated in or any other actions taken by such Retiring Lender
while it was a Lender.
In lieu of the foregoing, upon the express written consent of the Required
Lenders, the Borrowers shall have the right to terminate the Commitment of a
Retiring Lender in full. Upon payment by the Borrowers to the Administrative
Agent for the account of the Retiring Lender of an amount equal to the sum of
(A) the aggregate principal amount of all Loans, LOC Obligations and BA
Obligations held by the Retiring Lender and (B) all accrued interest, fees and
other amounts owing to the Retiring Lender hereunder, including, without
limitation, all amounts payable by the Borrower to the Retiring Lender under
Sections 4.9, 4.12, 4.13, 4.14 or 14.5, such Retiring Lender shall cease to
constitute a Lender hereunder; provided that the provisions of this Agreement
(including, without limitation, the provisions of Sections 4.9, 4.12, 4.13, 4.14
and 14.5) shall continue to govern the rights and obligations of a Retiring
Lender with respect to any Loans made, any Letters of Credit issued or
participated in, any Bankers' Acceptances issued or participated in or any other
actions taken by such Retiring Lender while it was a Lender.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Agreement is subject to
satisfaction of the following conditions (in form and substance acceptable to
the Administrative Agent):
(a) Executed Credit Documents. Receipt by the Administrative Agent of
duly executed copies of (i) this Agreement; (ii) the Revolving Credit
Notes; (iii) the Guaranty Agreements; (iv) the Security Agreements; and (v)
all other Credit Documents.
(b) No Default; Representations and Warranties. As of the Closing Date
(i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects.
(c) Opinion of Counsel. Receipt by the Administrative Agent of an
opinion, or opinions, in form and substance satisfactory to the
Administrative Agent and the Canadian Agent, addressed to the Agents on
behalf of the Lenders and dated as of the Closing Date, from U.S. and
Canadian legal counsel to the Credit Parties.
(d) Corporate Documents. Receipt by the Administrative Agent of the
following:
75
82
(i)Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Credit Party that is
a party to a Credit Document, certified to be true and complete as of
a recent date by the appropriate Governmental Authority of the state
or other jurisdiction of its incorporation and certified by a
secretary or assistant secretary as of the Closing Date to be true and
correct.
(ii) Resolutions. Copies of resolutions of the Board of Directors
of each Credit Party that is party to a Credit Document, approving and
adopting the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary as of the Closing Date
to be true and correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of each Credit Party that is a
party to a Credit Document, certified by a secretary or assistant
secretary as of the Closing Date to be true and correct and in force
and effect as of such date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Credit Party that is
a party to a Credit Document, certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in which
such Credit Party carries on business and is required by the laws of
such jurisdiction to be qualified therein to do so and (ii) where
applicable, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(e) Compliance with Financial Obligations. The Credit Parties shall be
in compliance with all existing material financial obligations owed to
third parties.
(f) Personal Property Collateral. The Administrative Agent shall have
received:
(i) searches of filings under the UCC and PPSA (or corresponding
local laws) in the jurisdiction of the chief executive office of each
Credit Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Administrative Agent's security interest in the Collateral, copies of
the financing statements on file in such jurisdictions and evidence
that no Liens exist other than Permitted Liens;
(ii) duly completed financing statements under the UCC and PPSA
(or corresponding local laws) for each appropriate jurisdiction as is
necessary, in the Administrative Agent's reasonable discretion, to
perfect the Administrative Agent's security interest in the
Collateral;
76
83
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Administrative Agent in order to perfect
the Administrative Agent's security interest in the Collateral;
(iv) all instruments and chattel paper in the possession of any
of the Credit Parties, together with allonges or assignments as may be
necessary or appropriate to perfect the Administrative Agent's
security interest in the Collateral to the extent required under the
Security Agreements; and
(v) duly executed consents as are necessary, in the
Administrative Agent's reasonable discretion, to perfect the Lenders'
security interest in the Collateral including, without limitation,
such Acknowledgment Agreements from lessors of real property as the
Administrative Agent may require.
(g) No Material Adverse Effect. No event shall have occurred since
January 2, 1999 that has had or could be reasonably expected to have a
Material Adverse Effect.
(h) Litigation. No litigation shall be pending or threatened which, in
the reasonable determination of the Administrative Agent, would have or
reasonably be expected to have a Material Adverse Effect.
(i) Consents and Approvals. Receipt by the Administrative Agent of
evidence that all material governmental, shareholder and third party
consents and approvals necessary or desirable in connection with the
execution and delivery of the Credit Documents and the consummation of the
transactions set forth therein.
(j) Officer's Certificate. The Administrative Agent shall have
received a certificate or certificates executed by a Senior Financial
Officer of the Company on behalf of the Credit Parties as of the Closing
Date stating that (A) each Credit Party is in compliance with all existing
material financial obligations, (B) all material governmental, shareholder
and third party consents and approvals, if any, with respect to the Credit
Documents and the other transactions contemplated thereby have been
obtained, (C) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to effect a member of the Consolidated Cott
Group or any other transaction contemplated by the Credit Documents, if
such action, suit, investigation or proceeding could have or could be
reasonably expected to have a Material Adverse Effect, and (D) immediately
after giving effect to this Agreement, the other Credit Documents and the
other transactions contemplated therein to occur on such date, (1) each
Credit Party is Solvent, (2) no Default or Event of Default exists, (3) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (4) the
Consolidated Cott Group is in compliance with each of the financial
covenants set forth in Article VIII.
(k) Priority of Liens. The Administrative Agent shall have received
satisfactory evidence that (i) subject to Permitted Liens, the
Administrative Agent, on
77
84
behalf of the applicable Lenders, holds a perfected, first priority Lien on
all applicable Collateral (subject to clause (i) above) and (ii) none of
the Collateral is subject to any other Liens other than Permitted Liens.
(l) Opening Borrowing Base Certificate. Receipt by each of the Agents
of a Borrowing Base Certificate as of the close of business on June 30,
1999, substantially in the form of Exhibit J and certified by a Senior
Financial Officer of the Company to be true and correct as of the Closing
Date.
(m) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the Credit
Parties evidencing general comprehensive liability and property insurance
meeting the requirements set forth in the Credit Documents, including,
without limitation, naming the Administrative Agent as loss payee on behalf
of the Lenders and each Lender as additional insured and copies of credit
insurance policies insuring foreign Accounts to be included as Eligible
Accounts Receivable.
(n) Corporate Structure. The corporate capital and ownership structure
of the Consolidated Cott Group shall be as described in Schedule 5.1(n).
(o) Other Indebtedness. Receipt by the Administrative Agent of
evidence that, after giving effect to the making of the Loans made on the
Closing Date, the Credit Parties shall have no Funded Debt other than the
Indebtedness under the Credit Documents and as disclosed on Schedule 6.9.
(p) Solvency Certificate. Receipt by the Administrative Agent of an
officer's certificate for each of the Credit Parties prepared by a Senior
Financial Officer of such Credit Party as to the financial condition,
solvency and related matters of such Credit Party, in each case after
giving effect to the initial borrowings under the Credit Documents, in
substantially the form of Exhibit K hereto.
(q) Sources and Uses; Payment Instructions. Receipt by the
Administrative Agent of (i) a statement of sources and uses of funds
covering all payments reasonably expected to be made by the Company in
connection with the transactions contemplated by the Credit Documents to be
consummated on the Closing Date, including an itemized estimate of all
fees, expenses and other closing costs and (ii) payment instructions with
respect to each wire transfer to be made by the Agents on behalf of the
Lenders or the Company or the Borrowers on the Closing Date setting forth
the amount of such transfer, the purpose of such transfer, the name and
number of the account to which such transfer is to be made, the name and
ABA number of the bank or other financial institution where such account is
located and the name and telephone number of an individual that can be
contacted to confirm receipt of such transfer.
(r) Subordinated Debt. Receipt by the Administrative Agent of duly
executed copies of the loan documentation and form of promissory note
evidencing the Subordinated Debt, in form and substance acceptable to the
Lenders in their reasonable discretion.
78
85
(s) Financial Statements. The Administrative Agent shall have received
the Financial Statements described in Section 6.6.
(t) Fees and Expenses. All fees and expenses required to be paid under
this Agreement on or prior to the Closing Date shall have been paid in
full.
(u) Due Diligence. The Administrative Agent shall have completed its
due diligence with respect to the Company and its Subsidiaries and their
review of management information systems (including Year 2000 compliance).
(v) Agent for Service of Process. The Administrative Agent shall have
received satisfactory evidence that CT Corporation System shall have been
appointed as agent for service of process in the State of North Carolina on
behalf of the Company.
(w) Other. The receipt by the Administrative Agent of such other
documents, agreements or information as reasonably requested by any Lender.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans or create Bankers' Acceptances, nor
shall the Issuing Lender be required to issue or extend a Letter of Credit,
unless:
(a) Notice. The applicable Borrower shall have delivered (i) in the
case of any Loan, a Notice of Borrowing, duly executed and completed, by
the time specified in Sections 2.1 or 2.3, as appropriate and (ii) in the
case of any Letter of Credit, the Issuing Lender shall have received an
appropriate request for issuance in accordance with the provisions of
Section 2.2 or 2.4, as applicable and (iii) in the case of a Bankers'
Acceptance, to the Canadian Agent, an appropriate notice in accordance with
Section 2.5;
(b) Representations and Warranties. The representations and warranties
made by a Credit Party in any Credit Document are true and correct in all
material respects at and as if made as of such date;
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have occurred any
Material Adverse Effect; and
(e) Availability. Immediately after giving effect to the making of a
Loan or the issuance of a Letter of Credit or the creation of a Bankers'
Acceptance, as the case may be, the Borrowers shall be in compliance with
Section 4.4(b)(i).
79
86
The delivery of each Notice of Borrowing and each request for a Letter of Credit
or Bankers' Acceptance shall constitute a representation and warranty by the
applicable Borrower of the correctness of the matters specified in subsections
(b), (c), (d) and (e) above.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrowers hereby represent and warrant to each Lender that:
6.1 ORGANIZATION AND GOOD STANDING.
Except as set forth on Schedule 6.1, each Credit Party resident in the
United States (i) is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation authorized to do
business in every jurisdiction where the failure to so qualify would have or
reasonably be expected to have a Material Adverse Effect, and (iii) has the
requisite corporate power and authority to own its properties and to carry on
its business as now conducted and as proposed to be conducted. Each Credit Party
resident in Canada (A) is a corporation duly incorporated or amalgamated and
validly subsisting under the laws of its jurisdiction of incorporation, (B) is
duly qualified and in good standing as a foreign corporation authorized to do
business in every jurisdiction where the failure to so qualify would have or
reasonably be expected to have a Material Adverse Effect and (C) has the
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted.
6.2 DUE AUTHORIZATION.
Except as set forth on Schedule 6.2, each Credit Party (a) has the
requisite corporate power and authority to execute, deliver and perform such of
the Credit Documents to which it is a party and to incur the obligations herein
and therein provided for, and (b) is duly authorized to, and has been authorized
by all necessary corporate action, to execute, deliver and perform such of the
Credit Documents to which it is a party.
6.3 NO CONFLICTS.
With respect to each Credit Party, neither the execution and delivery of
the Credit Documents, nor the consummation of the transactions contemplated
therein, nor performance of and compliance with the terms and provisions thereof
will (a) violate or conflict in any material respect with any material provision
of its articles or certificate of incorporation or bylaws, (b) violate,
contravene or conflict in any material respect with any material law, regulation
(including without limitation Regulation U or Regulation X), order, writ,
judgment, injunction, decree or permit applicable to it, (c) violate, contravene
or conflict in any material respect with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound,
80
87
or (d) result in or require the creation of any material Lien upon or with
respect to its properties except in favor of the Lenders.
6.4 CONSENTS.
No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or Governmental Authority or third party in
respect of any Credit Party is required in connection with the execution,
delivery or performance of this Agreement or any of the other Credit Documents
other than those consents which have been obtained and copies of which have been
delivered to the Administrative Agent.
6.5 ENFORCEABLE OBLIGATIONS.
This Agreement and the other Credit Documents have been duly executed and
delivered and constitute legal, valid and binding obligations of each Credit
Party (with regard to each agreement or instrument to which it is a party)
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy or insolvency laws or similar laws affecting creditors' rights
generally.
6.6 FINANCIAL CONDITION.
(a) The financial statements provided to the Lenders, consisting of
(i) an audited consolidated balance sheet of the Consolidated Cott Group,
together with related consolidated statements of income, stockholders'
equity and changes in financial position or cash flow for the fiscal years
1997 and 1998 and (ii) unaudited consolidated balance sheets of the
Consolidated Cott Group, together with related consolidated statements of
income, and consolidated statements of stockholders' equity and changes in
financial position or cash flow for the most recently ended fiscal quarter,
fairly present the financial condition and business operations of the
Consolidated Cott Group as of such respective dates (together, the
"Financial Statements"); such financial statements were prepared in
accordance with U.S. GAAP; and since January 2, 1999, there have occurred
no changes or circumstances which have had or are reasonably expected to
have a Material Adverse Effect.
(b) The financial statements delivered to the Lenders pursuant to
Sections 7.1(a) and (b) have been prepared in accordance with U.S. GAAP and
will present fairly the consolidated and consolidating (as applicable)
financial condition, results of operations and cash flows of the
Consolidated Cott Group as of such date and for such periods.
6.7 NO DEFAULT.
None of the Credit Parties is in default under any term of any indenture,
contract, lease, agreement, instrument or other commitment to which any of them
is a party or by which any of them is bound which default has had or could be
reasonably expected to have a Material Adverse Effect. None of the Credit
Parties knows of any dispute regarding any indenture, contract, lease,
81
88
agreement, instrument or other commitment which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default presently exists.
6.8 LIENS.
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. To the best knowledge of the
applicable Credit Party, no lessor, warehouseman, filler, processor or packer of
any such Credit Party has granted any Lien with respect to the Inventory
maintained by such Credit Party at the property of any such lessor,
warehousemen, filler, processor or packer. Upon the proper filing of financing
statements and the proper recordation of other applicable documents with the
appropriate filing or recordation offices in each of the necessary
jurisdictions, the security interests granted pursuant to the Credit Documents
constitute and shall at all times constitute valid and enforceable first, prior
and perfected Liens on the Collateral (other than Permitted Liens). The Credit
Parties are or will be at the time additional Collateral is acquired by them,
the absolute owners of the Collateral with full right to pledge, sell, consign,
transfer and create a Lien therein, free and clear of any and all Liens in favor
of third parties, except Permitted Liens. The Credit Parties will at their
expense warrant, until payment in full of the Obligations and termination of the
Commitments, and, at the Administrative Agent's request, defend the Collateral
from any and all Liens (other than Permitted Liens) of any third party. The
Credit Parties will not grant, create or permit to exist, any Lien upon the
Collateral, or any proceeds thereof, in favor of any third party (other than
Permitted Liens).
6.9 INDEBTEDNESS.
The Consolidated Cott Group has no Indebtedness (including without
limitation guaranty, reimbursement or other contingent obligations) except (a)
as disclosed in the Financial Statements referenced in Section 6.6, (b) as set
forth in Schedule 6.9, and (c) as otherwise permitted under the terms of this
Agreement.
6.10 LITIGATION.
Except as disclosed in Schedule 6.10, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of the Borrowers threatened, against any Credit Party which, if
adversely determined, would have or reasonably be expected to have a Material
Adverse Effect.
6.11 MATERIAL CONTRACTS.
No Credit Party is in default under any Material Contract which default
could reasonably be expected to have a Material Adverse Effect.
6.12 TAXES.
82
89
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid all
amounts of taxes shown thereon to be due (including interest and penalties) and
has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with U.S. GAAP. None of the Credit Parties is aware of any proposed
material tax assessments against it or any other Credit Party.
6.13 COMPLIANCE WITH LAW.
None of the Credit Parties has violated or failed to comply with any
statute, law, ordinance, regulation, rule or order of any foreign, federal,
state or local government, or any other Governmental Authority or any self
regulatory organization, or any judgment, decree or order of any court,
applicable to its business or operations except where the aggregate of all such
violations or failures to comply would not have or reasonably be expected to
have a Material Adverse Effect. The conduct of the business of each of the
Credit Parties is in conformity with all securities, commodities, energy, public
utility, zoning, building code, health, OSHA and environmental requirements and
all other foreign, federal, state and local governmental and regulatory
requirements and requirements of any self regulatory organizations, except where
such non-conformities could not reasonably be expected to have a Material
Adverse Effect. None of the Credit Parties has received any notice to the effect
that, or otherwise been advised that, it is not in compliance with, and none of
such Credit Parties has any reason to anticipate that any currently existing
circumstances are likely to result in the violation of any such statute, law,
ordinance, regulation, rule, judgment, decree or order which failure or
violation could reasonably be expected to have a Material Adverse Effect.
6.14 ERISA.
(a) Except as would not reasonably be expected to have a Material
Adverse Effect, during the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best of the Borrowers' or any ERISA Affiliate's knowledge, no
event or condition has occurred or exists as a result of which any ERISA
Event could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has occurred
with respect to any Single Employer Plan; (iii) each Plan, Single Employer
Plan and, to the best of the Borrowers' or any ERISA Affiliate's knowledge,
each Multiemployer Plan has been maintained, operated, and funded in
compliance in all material respects with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other applicable
federal or state laws; and (iv) no Lien in favor of the PBGC or a Single
Employer Plan has arisen or is reasonably likely to arise on account of any
Single Employer Plan.
(b) Except as set forth in the Financial Statements, the actuarial
present value of all "benefit liabilities" on a going concern basis,
whether or not vested, under each Single Employer Plan, as of the last
annual valuation date prior to the date on which this
83
90
representation is made or deemed made (determined, in each case, utilizing
the actuarial assumptions used in such Plan's most recent actuarial
valuation report), did not exceed as of such valuation date the fair market
value of the assets of such Plan.
(c) Except as would not reasonably be expected to have a Material
Adverse Effect, neither the Borrowers nor any ERISA Affiliate has incurred,
or, to the best of the Borrowers' or any ERISA Affiliate's knowledge, is
reasonably expected to incur, any withdrawal liability under ERISA with
respect to any Multiemployer Plan or Multiple Employer Plan. Except as
would not reasonably be expected to have a Material Adverse Effect, neither
Borrower nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if such Borrower or any such ERISA Affiliate were to
withdraw completely from all Multiemployer Plans and Multiple Employer
Plans as of the valuation date most closely preceding the date on which
this representation is made or deemed made. Neither Borrower nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated
(within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to
the best of the Borrowers' or any ERISA Affiliate's knowledge, reasonably
expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject the
Borrowers or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which the Borrowers or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability, except for any such prohibited transaction or breach which
would not reasonably be expected to have a Material Adverse Effect.
(e) Except as set forth in the Financial Statements, the Borrowers and
their ERISA Affiliates have no material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106. Each Plan which is a welfare plan
(as defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA
and Section 4980B of the Code apply has been administered in compliance in
all material respects with such sections.
(f) All Canadian benefit plans and Canadian pension plans and any
similar plans of the Canadian Borrowers and their Subsidiaries are duly
registered under the provisions of the Income Tax Act (Canada), have been
administered in accordance with such statute and no event has occurred
which would cause a loss of such registered status. All material
obligations of the Canadian Borrowers and their Subsidiaries (including
fiduciary and funding obligations) under such plans required to be
performed have been performed. There are no outstanding disputes concerning
the assets held in the funding media for such plans. All contributions or
premiums required to be made by the Canadian Borrowers or their
Subsidiaries to such plans have been made in a timely fashion in accordance
with the terms of such plans and applicable laws. Each of such plans is
fully
84
91
funded and there exists no going concern unfunded actuarial liabilities or
solvency deficiencies in respect of such plans.
6.15 SUBSIDIARIES.
Set forth in Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each member of the Consolidated Cott Group. Information on the
attached Schedule 6.15 includes a complete and accurate list of the jurisdiction
of incorporation of each member of the Consolidated Cott Group and the
percentage ownership interest of voting stock owned by the direct parent company
in each such member.
6.16 OWNERSHIP OF STOCK.
The outstanding capital stock and other equity interests of all Credit
Parties is validly issued, fully paid and non-assessable and is owned by the
Borrowers, directly or indirectly, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).
6.17 USE OF PROCEEDS; MARGIN STOCK.
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.10. None of such proceeds will be used for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U or
Regulation X, or for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry "margin stock" or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of Regulation U or Regulation X.
6.18 GOVERNMENT REGULATION.
No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940
or the Interstate Commerce Act, each as amended. In addition, none of the Credit
Parties is (a) an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, and is not controlled by
such a company, or (b) a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary"
or a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended. No director, executive officer or principal shareholder
of any Credit Party is a director, executive officer or principal shareholder of
any Lender. For purposes hereof, the terms "director", "executive officer" and
"principal shareholder" (when used with reference to any Lender) shall have the
meanings ascribed to them in Regulation O issued by the Board of Governors of
the Federal Reserve System.
6.19 HAZARDOUS SUBSTANCES.
Except as disclosed on Schedule 6.19 or except as would not reasonably be
expected to have a Material Adverse Effect, to the Borrowers' knowledge without
having undertaken any
85
92
environmental audit, all real property owned or leased by any Credit Party or on
which any Credit Party operates (the "Subject Property") is free from "hazardous
substances" "contaminants" or "pollutants" or similar substances as defined in
the applicable Environmental Laws in concentrations or amounts that require
cleanup under any Environmental Laws; no portion of the Subject Property is
subject to federal, provincial, state or local, complaint, investigation or, to
the Borrowers' knowledge without having undertaken any environmental audit,
liability under applicable Environmental Laws because of the presence of leaked
or spilled petroleum products, waste materials or debris, "PCB's" or PCB items
(as defined in 40 C.F.R. ss.763.3), underground storage tanks, "asbestos" (as
defined in 40 C.F.R. ss.763.63) or the past or present accumulation, spillage or
leakage of any such substance subject to regulation under the Environmental
Laws; and each Credit Party is in substantial compliance with all material
Environmental Laws applicable in connection with the operation of its
businesses, except to the extent that the failure to be in compliance would not
have or reasonably be expected to have a Material Adverse Effect; and no
Borrower knows of any complaint or investigation under Environmental Laws
regarding real property which it or any other Credit Party owns or leases or on
which it or any other Credit Party operates.
6.20 PATENTS, FRANCHISES, ETC.
Each Credit Party possesses or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights,
free of adverse claims, that are necessary for the operation of its respective
business as presently conducted and as proposed to be conducted. Each Credit
Party has obtained all material licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its respective
property and to the conduct of its business, except to the extent that the
failure to have obtained any such licenses, permits, franchises or other
governmental authorizations would not have or reasonably be expected to have a
Material Adverse Effect.
6.21 SOLVENCY.
Each Credit Party individually, and the Credit Parties as a whole, are and,
after consummation of this Agreement and after giving effect to all Indebtedness
incurred hereunder will be Solvent.
6.22 LOCATION OF ASSETS.
The Credit Parties' chief executive offices are set forth on Schedule 6.22
hereto, and the books and records of the Credit Parties and all chattel paper
and all records of accounts are located at the chief executive offices of the
Credit Parties or as otherwise noted on Schedule 6.22. All other locations where
the company keeps, stores or maintains any Collateral are set forth on Schedule
6.22 hereto. There is no jurisdiction in which any Credit Party has any
Collateral (except for Inventory held for shipment by third Persons, Inventory
in transit, Inventory held for processing by third Persons, or immaterial
quantities of Inventory) other than those jurisdictions listed on Schedule 6.22.
Schedule 6.22 is a true, correct and complete list of (i) the names and
addresses of each warehouseman, filler, processor and packer at which Inventory
is stored, (ii) the address of the chief executive offices of the Credit Parties
and (iii) the
86
93
address of all offices where records and books of account of the Credit Parties
are kept or where Collateral is kept, stored or maintained. None of the receipts
received by any of the Credit Parties from any warehouseman, filler, processor
or packer states that the goods covered thereby are to be delivered to bearer or
to the order of a named person or to a named person and such named person's
assigns. Each of the Credit Parties agrees to provide the Administrative Agent
with a revised Schedule 6.22 setting forth current principal places of business,
chief executive offices, and information concerning Inventory locations on a
quarterly basis at the time the financial statements described in Section 7.1(b)
are required to be delivered to the Administrative Agent and the Lenders.
6.23 D/B/A OR TRADE NAMES.
None of the Credit Parties has used any corporate, d/b/a or trade name
during the five (5) years preceding the date hereof, other than the corporate
name shown on its or such Subsidiary's Articles or Certificate of Incorporation
and as set forth on Schedule 6.23.
6.24 YEAR 2000 COMPLIANCE.
The Company has (a) initiated a review and assessment of all areas within
its and each of its Subsidiaries' businesses and operations (including those
affected by suppliers, vendors and customers) that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications may not
be able to recognize and properly perform date-sensitive functions after
December 31, 1999), (b) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (c) to date, implemented that plan in
accordance with that timetable. To date, the Borrowers have not become aware of
any reason to believe that the Year 2000 Problem could reasonably be expected to
have a Material Adverse Effect.
6.25 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best knowledge of the
Borrowers after diligent inquiry, threatened between any Credit Parties and any
of their respective employees, other than employee grievances arising in the
ordinary course of business which could not, in the aggregate, have a Material
Adverse Effect.
6.26 CERTAIN SUBSIDIARIES.
(a) Each of the Subsidiaries of the Borrowers listed on Schedule
6.26(a) hereto has no Accounts or Inventory and no ongoing business other
than as set forth in Schedule 6.26(a) hereto.
(b) Schedule 6.26(b) hereto sets forth the ownership structure above
Cott Beverages UK, and in the event that funds are transferred to Cott
Beverages UK in the form of share capital, such transfer of funds shall
occur through the chain of ownership as set forth on Schedule 6.26(b).
Other than the Indebtedness owed by Cott Beverages UK, there is no other
Funded Debt owed by Cott Corporation's subsidiaries residing in or formed
under the laws of the United Kingdom.
87
94
6.27 LABOR MATTERS.
None of the Credit Parties is engaged in any unfair labor practice. There
is (a) no material unfair labor practice complaint pending against any Credit
Party or, to the best knowledge of the Borrowers, threatened against any of
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements that has or
would reasonably be expected to have a Material Adverse Effect is so pending
against any Credit Party or, to the best knowledge of the Borrowers, threatened
against any of them, (b) no strike, labor dispute, slowdown or stoppage pending
against any Credit Party or, to the best knowledge of the Borrowers, threatened
against any of them, which would have or reasonably be expected to have a
Material Adverse Effect and (c) to the best of the knowledge of the Borrowers,
no union representation questions with respect to the employees of any of the
Credit Parties and no union organizing activities which would have or reasonably
be expected to have a Material Adverse Effect.
6.28 STATUS OF ACCOUNTS.
Each of the Accounts (other than Accounts owing from one Credit Party to
another Credit Party) is based on an actual and bona fide sale and delivery of
goods or rendering of services to customers, made by the Credit Parties in the
ordinary course of business; the goods and inventory being sold and the Accounts
created are exclusive property of the Credit Parties and are not and shall not
be subject to any Lien, consignment arrangement, encumbrance, security interest
or financing statement whatsoever, other than the Permitted Liens; and each of
the Credit Parties' customers have accepted the goods or services, owe and are
obligated to pay in cash the full amounts stated in the invoices according to
their terms, without any dispute, offset, defense or counterclaim that could
reasonably be expected to have, when aggregated with any such other disputes,
offsets, defenses or counterclaims, a Material Adverse Effect. Each of the
Credit Parties confirms to the Lenders that any and all taxes or fees relating
to its business, its sales, the Accounts or the goods relating thereto, are its
sole responsibility and that same will be paid by such Credit Party when due
(unless duly contested and adequately reserved for) and that none of said taxes
or fees is or will become a lien on or claim against the Accounts.
6.29 TRADE SUPPLIERS.
Attached hereto as Schedule 6.29 is a true, correct and complete list of
all of the suppliers who have sold goods to the Credit Parties during the fiscal
year ended January 2, 1999, for an amount representing five (5) percent or more
of the accounts of the Credit Parties payable for such year.
6.30 KEY MEMBERS OF MANAGEMENT.
Attached hereto as Schedule 6.30 is a true, correct and complete list of
the members of management of the Credit Parties who report to the Chief
Executive Officer of the Company as of the date hereof (collectively, the
"Senior Management Members").
88
95
6.31 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties in writing to the Administrative
Agent, the Canadian Agent, or any Lender for purposes of or in connection with
this Credit Agreement or any Credit Documents, or any transaction contemplated
hereby or thereby is or will be true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information not
misleading at such time. There is no fact now known to any Senior Officer of any
Credit Party which has, or would reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the Financial
Statements, or any certificate, opinion or other written statement made or
furnished by any Credit Party to the Administrative Agent.
ARTICLE VII
AFFIRMATIVE COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Loans, LOC Obligations and BA Obligations, together with
interest, fees and other Obligations hereunder, have been paid in full and the
Commitments and Letters of Credit hereunder shall have terminated that they will
do or cause to be done the following:
7.1 INFORMATION COVENANTS.
The Borrowers will furnish, or cause to be furnished, to the Administrative
Agent and each Lender:
(a) Annual Financial Statements. As soon as available and in any event
within one hundred forty (140) days after the close of each fiscal year of
the Consolidated Cott Group, a consolidated and consolidating balance sheet
of the Consolidated Cott Group as at the end of such fiscal year together
with related consolidated and consolidating statements of income,
shareholder's equity and of cash flows for such fiscal year, setting forth
in comparative form consolidated and consolidating figures for the
preceding fiscal year, all in reasonable detail and, in the case of the
consolidated financial statements, audited by independent certified public
accountants of recognized national standing and whose opinion shall be to
the effect that such consolidated financial statements have been prepared
in accordance with U.S. GAAP and shall not be limited as to the scope of
the audit or qualified as to the status of the Consolidated Cott Group as a
going concern. It is specifically understood and agreed that failure of the
annual financial statements to be accompanied by an opinion of such
accountants in form and substance as provided herein shall constitute an
Event of Default hereunder. The financial statements delivered pursuant to
this Section 7.1(a) will have been prepared in accordance with U.S. GAAP
and will present fairly the consolidated and consolidating financial
condition, results of operations and cash flows of the Consolidated Cott
Group as of the date thereof.
89
96
(b) Quarterly Financial Statements. As soon as available and in any
event within ninety (90) days after the end of each fiscal quarter (other
than the fourth fiscal quarter, in which case one hundred forty (140) days
after the end thereof) of each fiscal year of the Consolidated Cott Group,
a consolidated and consolidating balance sheet and statements of income and
of cash flows of the Consolidated Cott Group as at the end of such
quarterly period together with related consolidated statements of retained
earnings, shareholder's equity and of cash flows for such quarterly period
and for the portion of the fiscal year ending with such period, in each
case setting forth in comparative form figures for the corresponding period
of the preceding fiscal year, all in reasonable form and detail acceptable
to the Administrative Agent, and accompanied by a certificate of a Senior
Financial Officer of the Company as being true and correct and as having
been prepared in accordance with U.S. GAAP, subject to changes resulting
from audit and normal year-end audit adjustments. The financial statements
delivered pursuant to this Section 7.1(b) will have been prepared in
accordance with U.S. GAAP and will present fairly the consolidated and
consolidating financial condition, results of operations and cash flows of
the Consolidated Cott Group as of the date thereof.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and (b), a certificate of a
Senior Financial Officer of the Company substantially in the form of
Exhibit L to the effect that no Default or Event of Default exists, or if
any Default or Event of Default does exist specifying the nature and extent
thereof and what action the Borrowers propose to take with respect thereto.
In addition, such certificate shall (i) demonstrate compliance with the
financial covenants contained in Article VIII by calculation thereof as of
the end of each such fiscal period (including, without limitation,
calculation of the Leverage Ratio for purposes of calculating the
Applicable Percentage), (ii) contain information regarding expenditures
made by the Credit Parties as to Permitted Investments and Capital
Expenditures during the prior fiscal quarter, (iii) contain information
regarding the amount of loans made to Cott Beverages UK, the amount of
repurchases of the Capital Stock of the Company, the amount of repurchases
of the Senior Notes, and any payments to Subsidiaries other than Credit
Parties pursuant to Section 9.11 hereof, in each case during the prior
fiscal quarter and (iv) contain a representation that the Borrowers have
not become aware of any reason to believe that the Year 2000 Problem could
reasonably be expected to have a Material Adverse Effect.
(d) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants to
a member of the Consolidated Cott Group in connection with any annual,
interim or special audit of the books of the Consolidated Cott Group.
(e) SEC and Other Reports. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and material
reports to or from, the Securities and Exchange Commission, or any
successor agency, and copies of all financial statements, proxy statements,
notices and reports as the Consolidated Cott Group shall send to its
shareholders or to the holders of any other Indebtedness in their capacity
as such holders and (ii) upon the request of the Administrative Agent, all
material reports and written information to and from the United States
Environmental Protection Agency, or any state or
90
97
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters relating to
a member of the Consolidated Cott Group.
(f) Notices. Each Borrower will give written notice to the
Administrative Agent (i) immediately of the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Borrowers propose to take
with respect thereto, and (ii) promptly, but in any event within five (5)
Business Days, following the occurrence of any of the following with
respect to a Credit Party (A) the pendency or commencement of any
litigation, arbitral or governmental proceeding against such Credit Party
which, if adversely determined, would have or reasonably be expected to
have, a Material Adverse Effect, (B) any levy of an attachment, execution
or other process against the assets of a Credit Party having a value of
$500,000 or more, (C) the occurrence of an event or condition which shall
constitute a default or event of default under any Indebtedness of a member
of the Consolidated Cott Group in excess of $500,000, (D) any development
in the business or affairs of any member of the Consolidated Cott Group
which has resulted in, or which the Company reasonably believes may result
in, a Material Adverse Effect, (E) the institution of any proceedings
against a Credit Party with respect to, or the receipt of notice by such
Person of potential liability or responsibility for violation, or alleged
violation of any federal, state, provincial or local law, rule or
regulation, including but not limited to, Environmental Laws, the violation
of which would have or be reasonably expected to have a Material Adverse
Effect or (F) promptly, of any change in the name of any Credit Party.
(g) Annual Budget. Within thirty (30) days following the end of each
fiscal year, beginning with the fiscal year ending January 1, 2000, an
annual budget of the Consolidated Cott Group containing, among other
things, pro forma financial statements and projected loan usage and excess
availability under the Credit Agreement for the next fiscal year.
(h) Borrowing Base Certificate, etc. Not later than 12:00 Noon on the
30th day of each month (or if such day is not a Business Day, then on the
next succeeding Business Day) and within three (3) Business Days following
the date of any Asset Disposition or Casualty Loss in excess of $5,000,000,
the Borrowers shall deliver a borrowing base certificate (the "Borrowing
Base Certificate") in substantially the form of Exhibit J hereto, duly
completed and certified by a Senior Financial Officer of the Company
detailing the Eligible Accounts Receivable and Eligible Inventory of the
Credit Parties as of the last day of the immediately preceding calendar
month. In addition, on the 30th day of each month (or if such day is not a
Business Day, then on the next succeeding Business Day), the Company shall
furnish a written report to the Lenders setting forth (i) the accounts
receivable aged trial balance at the immediately preceding month end for
each account debtor, (ii) the accounts payable aging summary for the
immediately preceding month, (iii) an inventory summary as of the
immediately preceding month end and (iv) if for any such immediately
preceding month less than $5,000,000 shall be available to be loaned to the
Borrowers under the Commitments and
91
98
the Total Borrowing Base, a sales and cash receipt summary for such
immediately preceding month. Such aging reports shall indicate which
Accounts are current, up to 30, 30 to 60 and over sixty (60) days past due
and shall list the names of all applicable account debtors. The
Administrative Agent may, but shall not be required to, rely on each
Borrowing Base Certificate delivered hereunder as accurately setting forth
the available U.S. Borrowing Base and Canadian Borrowing Base for all
purposes of this Credit Agreement until such time as a new Borrowing Base
Certificate is delivered to the Administrative Agent in accordance
herewith; Borrowing Base Certificates may be prepared and submitted to the
Lenders, and upon the occurrence and during the continuation of an Event of
Default, the Administrative Agent may request delivery of Borrowing Base
Certificates, on a more frequent basis than monthly, provided that such
certificate shall comply with the requirements set forth elsewhere herein.
(i) Other Indebtedness. Promptly upon receipt thereof, the Credit
Parties shall deliver copies of all material notices delivered to the
Company or Cott Beverages USA or sent by the Company or Cott Beverages USA
with respect to Subordinated Debt or the Senior Notes, including, without
limitation, any notice of default (the Company and Cott Beverages USA
expressly agreeing to furnish all such notices by telecopy).
(j) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Consolidated Cott Group as the Administrative
Agent or the Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each Credit Party will do all things necessary to preserve and keep (and
will cause each of its Subsidiaries to keep) in full force and effect its
existence, franchises and authority, except for corporate reorganizations and
other similar transactions which would not have or reasonably be expected to
have a Material Adverse Effect.
7.3 BOOKS AND RECORDS.
The Credit Parties will keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of U.S.
GAAP. In addition, each Credit Party will maintain books and records pertaining
to the Collateral in such detail, form and scope as is consistent with good
business practice.
7.4 COMPLIANCE WITH LAW.
Each of the Credit Parties will comply with all material laws, rules,
regulations and orders of, and all applicable restrictions imposed by all
applicable Governmental Authorities applicable to it, including applicable
Environmental Laws if noncompliance would have or be reasonably likely to have a
Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
92
99
Each of the Credit Parties will pay and discharge (a) all material taxes,
assessments and governmental charges or levies imposed upon it or them, or upon
its or their capital, income or profits, or upon any of its or their properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, would give rise to a Lien or
charge upon any of its or their properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that there is no requirement to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with U.S. GAAP, unless the failure to make any such
payment (i) shall give rise to an immediate right to foreclosure on a Lien
securing such amounts or (ii) otherwise would have or reasonably be expected to
have a Material Adverse Effect.
7.6 INSURANCE; CASUALTY LOSS.
(a) Each of the Credit Parties will maintain comprehensive general
liability insurance covering third party property damage and insurance covering
the Collateral up to the replacement value thereof, with such insurance
companies, in such amounts and covering such risks as are at all times
satisfactory to the Administrative Agent in its commercially reasonable
judgment. The present coverage of the Credit Parties is outlined as to carrier,
policy number, expiration date, type and amount on Schedule 7.6 hereto. All
policies covering the Collateral are to name the applicable Credit Parties and
the Administrative Agent as loss payees in case of loss, as their interests may
appear, and are to contain such other provisions as the Administrative Agent may
reasonably require to fully protect such Agent's interest in the Collateral and
to any payments to be made under such policies. All comprehensive general
liability policies of the Credit Parties are to name the Administrative Agent
and each Lender as an additional insured. True copies of all original insurance
policies or certificates of insurance evidencing such insurance covering the
Collateral are to be delivered to the Administrative Agent on or prior to the
Closing Date, premium prepaid, with the loss payable endorsement in the
Administrative Agent's favor, and shall provide for not less than ten (10) days
prior written notice to the Administrative Agent, of the exercise of any right
of cancellation. In the event any Credit Party fails to respond in a timely and
appropriate manner (as determined by the Administrative Agent in its reasonable
discretion) with respect to collecting under any insurance policies required to
be maintained under this Section 7.6, the Administrative Agent shall have the
right, in the name of itself or any Credit Party, to file claims under such
insurance policies, to receive and give acquittance for any payments that may be
payable thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
(b) Each of the Credit Parties will provide written notice to the Lenders
of the occurrence of any of the following events within five (5) Business Days
after the occurrence of such event: any of the Collateral is (i) damaged or
destroyed, or suffers any other loss or (ii) is condemned, confiscated or
otherwise taken, in whole or in part, or the use thereof is otherwise diminished
so as to render impracticable or unreasonable the use of such Collateral for the
purpose to which such Collateral was used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise, and in
93
100
either case the amount of the damage, destruction, loss or diminution in value
of such Collateral is in excess of $500,000 (collectively, a "Casualty Loss").
Each Credit Party will diligently file and prosecute its claim or claims for any
award or payment in connection with a Casualty Loss. In connection with any
Casualty Loss, so long as no Event of Default then exists and at least
$5,000,000 shall be available to be loaned to the Borrowers under the
Commitments and the Total Borrowing Base, the Borrowers may, at their election
and in their sole discretion, either (A) apply the proceeds realized from such
Casualty Loss to payment of accrued and unpaid interest or outstanding principal
of the Revolving Loans in accordance with Section 4.4 hereof or (B) pay such
proceeds to the Credit Parties to be used to repair, replace or rebuild the
Collateral or portion thereof that was the subject of the Casualty Loss. In
connection with any loss on the Collateral after the occurrence and during the
continuation of an Event of Default, or in connection with any Casualty Loss if
less than $5,000,000 shall be available to be loaned to the Borrowers under the
Commitments and the Total Borrowing Base, the Credit Parties will pay to the
Administrative Agent, promptly upon receipt thereof, any and all insurance
proceeds and payments received by any of the Credit Parties on account of
damage, destruction or loss of all or any portion of the Collateral and the
Administrative Agent shall, at its election and in its sole discretion, either
(A) apply the proceeds realized from such loss to payment of accrued and unpaid
interest or outstanding principal of the Revolving Loans in accordance with
Section 4.4 hereof or (B) pay such proceeds to the Credit Parties to be used to
repair, replace or rebuild the Collateral or portion thereof that was the
subject of the loss. After the occurrence and during the continuance of an Event
of Default, (1) no settlement on account of any loss on the Collateral shall be
made without the consent of the Lenders and (2) the Administrative Agent may
participate in any such proceedings and the Credit Parties will deliver to the
Administrative Agent such documents as may be requested by the Administrative
Agent to permit such participation and will consult with the Administrative
Agent, its attorneys and agents in the making and prosecution of such claim or
claims. Each of the Credit Parties hereby irrevocably authorizes and appoints
the Administrative Agent its attorney-in-fact, after the occurrence and
continuance of an Event of Default, to collect and receive for any such award or
payment and to file and prosecute such claim or claims, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest, and
each of the Credit Parties shall, upon demand of the Administrative Agent, make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning any such award or payment to the Administrative Agent
for the benefit of the Lenders, free and clear of any encumbrances of any kind
or nature whatsoever.
7.7 MAINTENANCE OF PROPERTY.
Each of the Credit Parties will maintain and preserve its properties and
equipment used or necessary in its business (in whomever's possession as they
may be) in good repair, working order and condition, normal wear and tear
excepted (and having regard to their respective ages), and will make, or cause
to be made, in such properties and equipment from time to time all repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto as may be needed or proper, to the extent and in the manner customary
for companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
94
101
Each of the Credit Parties will perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound.
7.9 ERISA.
Upon the Company or any ERISA Affiliate obtaining knowledge thereof, the
Company will give written notice to the Administrative Agent promptly (and in
any event within five (5) Business Days) of: (a) any event or condition,
including, but not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a ERISA Event; (b) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Company or any ERISA Affiliate, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA); (c) the failure to make full
payment on or before the due date (including extensions) thereof of all amounts
which the Company or any ERISA Affiliate is required to contribute to each
Single Employer Plan or Multiemployer Plan pursuant to its terms and as required
to meet the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (d) any change in the funding status of any Single Employer
Plan that could have or be reasonably expected to have a Material Adverse
Effect; together, with a description of any such event or condition or a copy of
any such notice and a statement by a Senior Financial Officer of the Company
briefly setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed to be
taken by the Company or any ERISA Affiliate with respect thereto. Promptly upon
request, the Company shall furnish the Administrative Agent and the Lenders with
such additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to filed with
the DOL and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERISA).
All Canadian benefit plans and Canadian pension plans and any similar plans
applicable to the Canadian Borrowers and their Subsidiaries will, if required by
applicable law, be duly registered under the provisions of the Income Tax Act
(Canada), will be administered in accordance with such statute and no event will
be allowed to occur which would cause a loss of such registered status. All
material obligations of the Canadian Borrowers and their Subsidiaries (including
fiduciary and funding obligations) required to be performed in connection with
such plans and the funding media therefor will be performed, except where the
failure to perform such obligations would not have or reasonably be expected to
have a Material Adverse Effect. There will be no outstanding disputes concerning
the assets held in the funding media for such plans. All contributions or
premiums required to be made by the Canadian Borrowers or their Subsidiaries to
such plans will be made in a timely fashion in accordance with the terms of such
plans and applicable laws. Each of such plans will be fully funded and no going
concern unfunded actuarial liabilities or solvency deficiencies in respect of
such plans will be allowed to exist.
7.10 USE OF PROCEEDS.
The proceeds of the Loans hereunder will be used solely (a) for repayment
of certain amounts of existing Funded Debt of the Consolidated Cott Group to the
extent permitted under this
95
102
Agreement, (b) for general corporate and working capital purposes of each
Borrower in the ordinary course of business and (c) as otherwise permitted under
this Agreement.
7.11 ADDITIONAL SUBSIDIARIES.
Promptly, or in any event within thirty (30) days, upon any Person becoming
a direct or indirect Subsidiary of a Borrower, the Borrowers shall so notify the
Administrative Agent and the Canadian Agent and shall, (a) in the case of a
Person organized and resident in the United States cause (i) such Person to
become a U.S. Borrower hereunder pursuant to a Joinder Agreement, (ii) such
Person to execute a Guaranty Agreement in substantially the same form as the
Guaranty Agreements executed by the other Guarantors organized and resident in
the United States , (iii) the U.S. Collateral of such Person to be pledged to
the Lenders pursuant to a Security Agreement similar to those executed by the
U.S. Borrowers, (iv) such Person to execute Revolving Notes in favor of the U.S.
Lenders and (v) such Person to deliver such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 Financing Statements,
Acknowledgment Agreements, certified resolutions and other organizational and
authorizing documents of such Person and favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above), all in form,
content and scope reasonably satisfactory to the Administrative Agent and (b) in
the case of a Person organized and domiciled in Canada cause (i) such Person to
become a Canadian Borrower hereunder pursuant to a Joinder Agreement, (ii) the
Canadian Collateral of such Person to be pledged to the Lenders pursuant to a
Security Agreement similar to those executed by the Canadian Borrowers, (iii)
such Person to execute Revolving Notes in favor of the Canadian Lenders and (iv)
such Person to deliver such other documentation as the Administrative Agent or
the Canadian Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 Financing Statements (or their
equivalent under the laws of Canada), Acknowledgment Agreements, certified
resolutions and other organizational and authorizing documents of such Person
and favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably
satisfactory to the Administrative Agent.
7.12 AUDITS/INSPECTIONS.
Each of the Credit Parties agrees that the Administrative Agent or its
agents may enter upon the premises of any of the Credit Parties at any time and
from time to time, during normal business hours, upon reasonable notice and, on
and after the occurrence and during the continuation of an Event of Default
which continues and is continuing beyond the expiration of any grace or cure
period applicable thereto and which has not otherwise been waived by the
Administrative Agent, at any time at all, for the purpose of (a) enabling the
Administrative Agent's internal auditors or other designees to conduct field
examinations at such of the Credit Party `s expense, (b) inspecting the
Collateral, (c) inspecting and/or copying (at the Credit Parties' expense) any
and all records pertaining thereto, (d) discussing the affairs, finances and
business of any Credit Party or with any officers, employees and directors of
any Credit Party with its certified independent accountant and (e) verifying
Eligible Accounts Receivable and/or Eligible Inventory. The Lenders, in the
reasonable discretion of the Administrative Agent, may
96
103
accompany the Administrative Agent at their sole expense in connection with the
foregoing inspections. Notwithstanding the foregoing, ongoing field examinations
shall be conducted by the Administrative Agent's exam staff at the Credit
Parties' expense (which shall include out-of-pocket expenses) (i) prior to the
occurrence of an Event of Default and so long as there is at least $10,000,000
of excess availability under the Total Borrowing Base, no more than two times
per year and (ii) on and after the occurrence and during the continuation of an
Event of Default, at any time.
7.13 INVENTORY.
Within thirty (30) days after the end of each month, upon the request of
the Administrative Agent from time to time, the Credit Parties will provide to
the Administrative Agent written statements listing categories of Inventory in
reasonable detail as requested by the Administrative Agent. The Credit Parties
will conduct annually a physical count of their Inventory and will provide the
Administrative Agent with prior written notice indicating when the physical
count is to be performed, and a copy of such count will be promptly supplied to
the Administrative Agent accompanied by a report of the value (valued at FIFO)
of such Inventory; provided that the Credit Parties will conduct such a physical
count at such other times and as of such dates as the Administrative Agent shall
reasonably request during any period in which there is less than $10,000,000 of
excess availability under the Total Borrowing Base.
7.14 COLLATERAL RECORDS.
Each Credit Party agrees to maintain such books and records regarding
Accounts and the other Collateral as the Administrative Agent may reasonably
require, and agrees that such books and records will reflect the Lenders'
interest in the Accounts and such other Collateral. Each of the Credit Parties
agrees to afford the Administrative Agent thirty (30) days prior written notice
of any change in the location at which any Collateral valued in excess of
$450,000 is stored or maintained (other than Inventory held for shipment by
third Persons, Inventory in transit, Inventory held for processing by third
Persons or immaterial quantities of assets, equipment or Inventory) or in the
location of its chief executive office or place of business from the locations
specified in Schedule 6.22, and to execute in advance of such change, cause to
be filed and/or delivered to the Administrative Agent any financing statements
or other documents required by the Administrative Agent, all in form and
substance satisfactory to the Administrative Agent. Each of the Credit Parties
agrees to advise the Administrative Agent promptly, in sufficient detail, of any
material change relating to the type, quantity or quality of the Collateral or
any event which could reasonably be expected to have a Material Adverse Effect.
Each of the Credit Parties agrees to furnish any Lender with such other
information regarding its business affairs and financial condition as such
Lender may reasonably request from time to time.
7.15 SECURITY INTERESTS.
Each Credit Party will defend all or any portion of the Collateral against
all claims and demands of all Persons at any time claiming the same or any
interest therein, except where the amount of such Collateral is immaterial and
the failure to so defend such Collateral would not reasonably be expected to
have a Material Adverse Effect. Each Credit Party agrees to comply
97
104
with the requirements of all state, provincial and federal laws in order to
grant to the Lenders a valid and perfected first security interest in the
Collateral. The Administrative Agent is hereby authorized by each of the Credit
Parties, to the extent permitted by applicable law, to file any financing
statements covering the Collateral whether or not any Credit Party's signature
appears thereon. Each Credit Party agrees to do whatever the Administrative
Agent may reasonably request, from time to time, by way of: filing notices of
liens, financing statements, fixture filings and amendments, renewals and
continuations thereof; cooperating with the Administrative Agent's custodians;
keeping stock records; obtaining waivers from landlords and mortgagees and from
warehousemen, fillers, processors and packers and their respective landlords and
mortgagees; paying claims, which might if unpaid, become a Lien (other than a
Permitted Lien) on the Collateral; and performing such further acts as the
Administrative Agent may reasonably require in order to effect the purposes of
this Credit Agreement and the other Credit Documents. Any and all fees, costs
and expenses of whatever kind and nature (including any Taxes, reasonable
attorneys' fees or costs for insurance of any kind), which the Administrative
Agent may reasonably incur with respect to the Collateral or the Obligations: in
filing public notices; in preparing or filing documents; making title
examinations or rendering opinions; in protecting, maintaining, or preserving
the Collateral or its interest therein; in enforcing or foreclosing the Liens
hereunder, whether through judicial procedures or otherwise; or in defending or
prosecuting any actions or proceedings arising out of or relating to its
transactions with any of the Credit Parties under this Credit Agreement or any
other Credit Document, will be borne and paid by the Credit Parties. If same are
not promptly paid by the Credit Parties, the Administrative Agent may pay same
on the Credit Parties' behalf, and the amount thereof shall be an Obligation
secured hereby and due to the Administrative Agent on demand.
7.16 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
Upon the occurrence and during the continuation of an Event of Default, in
furtherance of the continuing assignment and security interest in the Accounts
of each of the Credit Parties granted pursuant to the Security Agreements, upon
the creation of Accounts, each of the Credit Parties will execute and deliver to
the Administrative Agent in such form and manner as the Administrative Agent may
reasonably require, solely for its convenience in maintaining records of
collateral, such confirmatory schedules of Accounts, and other appropriate
reports designating, identifying and describing the Accounts as the
Administrative Agent may require. In addition, upon the Administrative Agent's
request, upon the occurrence and during the continuation of an Event of Default,
each Credit Party will provide the Administrative Agent with copies of
agreements with, or purchase orders from, the customers of each of the Credit
Parties, and copies of invoices to customers, proof of shipment or delivery and
such other documentation and information relating to said Accounts and other
collateral as the Administrative Agent may reasonably require. Failure to
provide the Administrative Agent with any of the foregoing shall in no way
affect, diminish, modify or otherwise limit the security interests granted
herein. Each Credit Party hereby authorizes the Administrative Agent to regard
such Credit Party's printed name or rubber stamp signature on assignment
schedules or invoices as the equivalent of a manual signature by such Credit
Party's authorized officers or agents.
98
105
7.17 COLLECTION OF ACCOUNTS.
Unless an Event of Default has occurred and is continuing beyond the
expiration of the applicable grace or cure period, or has not otherwise been
waived by the Administrative Agent, each Credit Party may and will enforce,
collect and receive all amounts owing on the Accounts (subject to any amounts
that such Credit Party is required to rebate to the applicable account debtor
pursuant to any agreement between such Credit Party and such account debtor),
for the Lenders' benefit and on the Lenders' behalf but at the Credit Parties'
expense in accordance with the provisions of Section 3.1 or 3.2, as applicable;
such privilege shall terminate automatically, however, without notice to the
Credit Parties which is hereby expressly waived by the Credit Parties, upon the
occurrence of any Event of Default which occurs and continues beyond the
expiration of any applicable grace or cure period, or which has not otherwise
been waived by the Required Lenders. Any checks, cash, notes or other
instruments or property received by any Credit Party with respect to any
Accounts shall be held by such Credit Party in trust for the benefit of the
Lenders, separate from such Credit Party's own property and funds, and
immediately turned over to the Administrative Agent or the Canadian Agent, as
applicable, with proper assignments or endorsements. No checks, drafts or other
instruments received by an Agent shall constitute final payment unless and until
such instruments have actually been collected.
7.18 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Credit Party will notify the Administrative Agent promptly of any
matters materially affecting the value, enforceability or collectibility of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be required
as to any such matter that affects Accounts outstanding at any one time from any
account debtor, which affected Accounts have a value greater than $1,000,000, or
to the extent that the outcome of such matter could reasonably be expected to
have a Material Adverse Effect. Each Credit Party will issue credit memoranda
promptly (with duplicates to the Administrative Agent upon its request for same)
upon accepting returns or granting allowances, and may continue to do so until
the occurrence of an Event of Default which continues beyond the expiration of
the applicable grace or cure period, or which has not otherwise been waived by
the Required Lenders. After the occurrence and during the continuance of an
Event of Default, each Credit Party agrees that all returned, reclaimed or
repossessed merchandise or goods shall be set aside by such Credit Party, marked
with the Lenders' name and held by such Credit Party for the Lenders' account as
owner and assignee.
7.19 ACKNOWLEDGMENT AGREEMENTS.
Each Credit Party will use commercially reasonable efforts (which shall not
require any Credit Party to expend any material sums) to assist the
Administrative Agent in obtaining executed Acknowledgment Agreements from each
of the warehousemen, processors, packers, fillers, landlords and mortgagees with
whom such Credit Party conducts business from time to time or who have an
interest in any real property on which any of the Collateral is located (a) for
the Inventory locations noted as such on Schedule 1.1B hereto, on or prior to
the Closing Date,
99
106
(b) for the Inventory locations noted as such on Schedule 1.1B hereto, within
ninety (90) days from the Closing Date and (c) for Inventory locations acquired
or established after the Closing Date, within sixty (60) days from the date of
such acquisition or establishment.
7.20 TRADEMARKS.
Each Credit Party will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of trademarks,
service marks and other marks, trade names or other trade rights owned or
licensed by such Credit Party, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.
7.21 YEAR 2000 COMPLIANCE.
The Credit Parties shall take all action necessary to assure that the
Credit Parties' computer based systems are able to operate and effectively
process data including dates on and after January 1, 2000. At the request of the
Administrative Agent, the Credit Parties shall provide the Lenders with
assurance acceptable to the Administrative Agent, acting reasonably, of the
Credit Parties' Year 2000 compatibility.
ARTICLE VIII
FINANCIAL COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Loans, LOC Obligations and BA Obligations, together with
interest, fees and other Obligations hereunder, have been paid in full and the
Commitments and Letters of Credit hereunder shall have terminated that they will
do or cause to be done the following:
8.1 LEVERAGE RATIO.
The Consolidated Cott Group shall maintain a Leverage Ratio of no greater
than 6.0 to 1.0 as of the last day of each fiscal quarter.
8.2 FIXED CHARGE COVERAGE RATIO.
The Consolidated Cott Group shall maintain a Fixed Charge Coverage Ratio of
not less than (a) 0.7 to 1.0 as of the last day of each fiscal quarter occurring
on or prior to January 1, 2000, (b) 0.8 to 1.0 as of the last day of each fiscal
quarter occurring on or prior to December 30, 2000, (c) 0.9 to 1.0 as of the
last day of each fiscal quarter occurring on or prior to December 29, 2001 and
(d) 1.0 to 1.0 as of the last day of each fiscal quarter occurring thereafter.
8.3 CAPITAL EXPENDITURES.
The Consolidated Cott Group shall not make Consolidated Capital
Expenditures in excess of $35,000,000 during the fiscal year ending January 1,
2000 and $50,000,000 in any
100
107
fiscal year thereafter; provided, however, that (a) the amount expended in any
fiscal year for any Permitted Acquisition shall not reduce the Capital
Expenditure limit for such fiscal year and (b) the proceeds of any asset sale
permitted hereunder or of any casualty loss under any insurance policy, the
proceeds of which are permitted to be applied by the Credit Parties under
Section 7.6 hereof, to the extent such proceeds are applied to replace or
rebuild any such assets or affected property, shall not be included in the
calculation of Consolidated Capital Expenditures for the purpose of determining
compliance with this Section 8.3. The Borrowers may seek an increase to the
limitations on Consolidated Capital Expenditures set forth herein by requesting
the consent of the Required Lenders to any such increase.
8.4 MINIMUM SHAREHOLDERS' EQUITY.
The consolidated Shareholders' Equity of the Consolidated Cott Group shall
be greater than or equal to (a) $115,000,000, plus (b) a cumulative amount,
determined at the end of each fiscal year, commencing with the fiscal year
ending January 1, 2000, equal to 75% of Net Income earned by the Consolidated
Cott Group during each such fiscal year (with no reductions for any losses
incurred during any fiscal year).
ARTICLE IX
NEGATIVE COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement is
in effect and until the Loans, LOC Obligations and BA Obligations, together with
interest, fees and other Obligations hereunder, have been paid in full and the
Commitments, Letters of Credit and Bankers' Acceptances hereunder shall have
terminated that it will do or cause to be done the following:
9.1 INDEBTEDNESS.
The Credit Parties will not contract, create, incur, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness arising under this Agreement and the other Credit
Documents or any Interest Rate Protection Agreement;
(b) Indebtedness existing as of the Closing Date as referenced in
Section 6.9 (and renewals, refinancings or extensions thereof, in whole or
in part, on terms and conditions substantially the same as such existing
Indebtedness and in a principal amount not in excess of that outstanding as
of the date of such renewal, refinancing or extension);
(c) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business including, to the
extent not current, accounts payable and accrued expenses that are subject
to bona fide dispute;
101
108
(d) purchase money Indebtedness (including capital leases) incurred by
the Credit Parties to finance the purchase of fixed assets; provided that
(i) the total of all such Indebtedness for all of the Credit Parties taken
together shall not exceed an aggregate principal amount of $10,000,000 at
any one time outstanding (including any such Indebtedness referred to in
subsection (b) above); (ii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(e) unsecured Indebtedness owing from one Credit Party to another
Credit Party;
(f) the guaranty by one Credit Party of another Credit Party's
Indebtedness, to the extent such Indebtedness is permitted hereunder;
(g) Subordinated Debt; and
(h) other Indebtedness, so long as (i) such Indebtedness is not
secured by any of the Collateral; (ii) no Default or Event of Default shall
exist immediately prior to or after the incurrence of such Indebtedness;
(iii) the Borrowers shall be in pro forma compliance with all financial
covenants contained in Article VIII hereof; (iv) the documentation
evidencing such Indebtedness shall not contain covenants which are more
restrictive than the covenants contained herein; and (v) immediately after
the incurrence of such Indebtedness, at least $5,000,000 shall be available
to be loaned to the Borrowers under the Commitments and the Total Borrowing
Base.
9.2 LIENS.
No Credit Party shall contract, create, incur, assume or permit to exist
any Lien with respect to any of the Collateral, whether now owned or after
acquired, except for Permitted Liens.
9.3 NATURE OF BUSINESS.
No Credit Party shall substantively alter the character of its business
from that conducted as of the Closing Date.
9.4 CONSOLIDATION OR MERGER.
No Credit Party shall enter into any transaction of merger or consolidation
or dissolve, liquidate, or wind up its affairs other than the merger or
consolidation of a Subsidiary of a Borrower into such Borrower or into another
Subsidiary of such Borrower; provided that a merger or consolidation to effect a
Permitted Acquisition shall be permitted; and provided, further, that if any
such merger involves a Borrower such Borrower shall be the surviving entity.
102
109
9.5 SALE OR LEASE OF ASSETS.
The Credit Parties will not convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business or assets whether now owned or hereafter acquired, including,
without limitation, inventory, receivables, equipment, real property interests
(whether owned or leasehold), and securities, other than (a) any inventory sold
or otherwise disposed of in the ordinary course of business; (b) the sale,
lease, transfer or other disposal by a Credit Party of any or all of its assets
to another Credit Party; (c) the sale of the Company's stock in Menu Foods
Limited (or the direct holding company thereof); and (d) any other sale, lease,
transfer or other disposal of the assets of a Credit Party so long as such sale,
lease, transfer or other disposal would not have or reasonably be expected to
have a Material Adverse Effect (for purposes hereof, a sale, lease, transfer or
other disposal of all or substantially all of the assets of a Credit Party would
be deemed to have Material Adverse Effect).
9.6 ACQUISITIONS.
The Credit Parties will not make any Acquisitions other than Permitted
Acquisitions.
9.7 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not enter into any transaction or series of
transactions (other than transactions between the Credit Parties), whether or
not in the ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate except (i) upon terms and conditions that would be
obtainable in a comparable arm's-length transaction with a Person other than an
Affiliate, (ii) employment arrangements, payment of directors' fees, and
transactions pursuant to employees' and directors' stock option plans, each in
the ordinary course of business and (iii) transactions permitted pursuant to
Sections 9.4, 9.5, or 9.11.
9.8 OWNERSHIP OF SUBSIDIARIES.
The Credit Parties will not sell, transfer or otherwise dispose of, any
shares of capital stock of any of their Subsidiaries who are Credit Parties, or
permit any of their Subsidiaries who are Credit Parties to issue, sell or
otherwise dispose of, any shares of capital stock of any of their Subsidiaries,
except to other Credit Parties.
9.9 FISCAL YEAR.
The Credit Parties will not change any of their respective fiscal years
without the prior written consent of the Required Lenders, which consent shall
not be unreasonably denied or delayed, with appropriate modification of the
financial covenants to give effect to the partial year resulting therefrom.
9.10 INVESTMENTS.
The Credit Parties will not make any Investments except for Permitted
Investments.
103
110
9.11 RESTRICTED PAYMENTS.
The Credit Parties will not make a Restricted Payment, other than (a)
dividends, distributions or other payments from any Subsidiary to any Borrower
or from any Credit Party to another Credit Party, (b) dividends payable solely
in the same class of Capital Stock of the Company, (c) dividends, distributions
or other payments applied to the payment of the Subordinated Affiliate Note to
the extent any such payments are permitted to be made pursuant to Section 9.15
hereof, (d) with the consent of the Required Lenders, which consent shall not be
unreasonably withheld, payments to repurchase the Company's Capital Stock, (e)
loans to officers and employees of the Company to purchase the Capital Stock of
the Company and such other purposes as permitted by Section 9.10, (f) redemption
payments on account of the Convertible Participating Voting Second Preferred
Shares, Series 1, with the consent of the Required Lenders, which consent shall
not be unreasonably withheld, and (g) any dividend, distribution or other
payment to any Subsidiary (other than a Credit Party) so long as a matching
payment, net of applicable dividend and/or withholding taxes, is simultaneously
made by one or more Subsidiaries (other than a Credit Party) to a Credit Party
(for purposes hereof, "simultaneously" shall mean the period from the time such
initial payment is made to any such Subsidiary and including up to one week
thereafter), and the Administrative Agent shall have received prior written
notice of such payment describing in reasonable detail such payment, including,
without limitation, the Credit Party payor, the Subsidiary payee, the Subsidiary
payor and the Credit Party payee and the purpose of such payment; provided,
however, that in each case described under clauses (c), (d), (e), (f) and (g)
hereof, immediately before and after giving effect to such dividend,
distribution or other payment, no Event of Default shall exist and the Company
shall be in compliance with the terms and provisions of the indenture for the
Senior Notes.
9.12 NO ADDITIONAL BANK ACCOUNTS.
The Credit Parties will not open, maintain or otherwise have any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any Person,
other than the accounts set forth on Schedule 9.12 hereto and, after the Closing
Date, such other accounts so long as each such account is subject to a tri-party
lockbox or other blocked account agreement satisfactory to the Administrative
Agent. All such checking, savings or other accounts of the Credit Parties shall
be under the sole dominion and control of the Administrative Agent in accordance
with Section 3.1 or 3.2, as the case may be.
9.13 AMENDMENTS OF MATERIAL CONTRACTS; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not, without the prior written consent of the
Administrative Agent, amend, modify, cancel or terminate or permit the
amendment, modification, cancellation or termination of any of the Material
Contracts or the Articles or Certificate of Incorporation or other equivalent
organizational document of any of the Credit Parties, except where such
amendment, modification, cancellation or termination would not reasonably be
expected to have a Material Adverse Effect.
104
111
9.14 ADDITIONAL NEGATIVE PLEDGES.
The Credit Parties will not create or otherwise cause or suffer to exist or
become effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the
Administrative Agent and the Lenders) on the creation or existence of any Lien
upon the assets of any Credit Party, other than Permitted Liens or (ii) any
contractual obligation which may restrict or inhibit the Administrative Agent's
rights or ability to sell or otherwise dispose of the Collateral or any part
thereof after the occurrence of an Event of Default.
9.15 OTHER INDEBTEDNESS.
The Credit Parties will not effect or permit any change in or amendment to
any document or instrument pertaining to the subordination, if any, terms of
payment or required prepayments of any Subordinated Debt or the Senior Notes,
effect or permit any change in or amendment to any document or instrument
pertaining to the covenants or events of default of any Subordinated Debt or the
Senior Notes if the effect of any such change or amendment is to make such
covenants or events of default more restrictive, give any notice of optional
redemption or optional prepayment or offer to repurchase under any such document
or instrument, or, directly or indirectly, make any payment of principal of or
interest on or in redemption, retirement or repurchase of any Subordinated Debt
or the Senior Notes, except for (a) payments of principal of and interest on the
Subordinated Debt to the extent not prohibited by the Subordination Agreement
and so long as any such payments are promptly transferred from the Irish
Affiliate to the Company and (b) (i) the scheduled payments required by the
terms of the documents and instruments evidencing Senior Notes and permitted by
the provisions of the documents and instruments evidencing the Senior Notes and
(ii) the redemption of any or all of the principal amount of the Senior Notes so
long as no Default or Event of Default exists or would exist as a result of such
redemption and immediately after giving affect thereto, at least $5,000,000 is
available to be loaned to the Borrowers under the Commitments and the Total
Borrowing Base.
9.16 LICENSES, ETC.
The Credit Parties will not enter into licenses of, or otherwise restrict
the use of, any patents, trademarks or copyrights which would prevent any Credit
Party from selling, transferring, encumbering or otherwise disposing of any such
patent, trademark or copyright, except where such license or restriction would
not reasonably be expected to have a Material Adverse Effect.
9.17 LIMITATIONS.
Except as set forth on Schedule 9.17 hereto, the Credit Parties will not,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Credit Party to (a) pay dividends or make any
other distribution on any of its Capital Stock, (b) pay any Indebtedness owed to
another Credit Party, (c) make loans or advances to another Credit Party or (d)
transfer any of its property to any other Credit Party, except for encumbrances
or restrictions
105
112
existing under or by reason of (i) customary non-assignment provisions in any
lease governing a leasehold interest, (ii) any agreement or other instrument of
a Person existing at the time it becomes a Subsidiary of a Borrower; provided
that such encumbrance or restriction is not applicable to any other Person, or
any property of any other Person, other than such Person becoming a Subsidiary
of a Borrower and was not entered into in contemplation of such Person becoming
a Subsidiary of a Borrower and (iii) this Credit Agreement and the other Credit
Documents.
ARTICLE X
POWERS
10.1 APPOINTMENT OF ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT.
Each Borrower hereby irrevocably authorizes and appoints the Administrative
Agent, or any Person or agent the Administrative Agent may designate, as such
Borrower's attorney-in-fact, at the Borrowers' cost and expense, to exercise,
subject to the limitations set forth in Section 10.2, all of the following
powers, which being coupled with an interest, shall be irrevocable until all of
the Obligations to the Lenders have been paid and satisfied in full and all of
the Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all in the
name of the Administrative Agent, the Lenders or such Borrower, as the case
may be, any and all checks, notes, drafts, and other documents or
instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to such
Borrower and to notify postal authorities to change the address for
delivery thereof to such address as the Administrative Agent may designate;
(c) To request at any time from customers indebted on Accounts, in the
name of such Borrower or a third party designee of the Administrative
Agent, information concerning the Accounts and the amounts owing thereon;
(d) To give customers indebted on Accounts notice of the Lenders'
interest therein, and/or to instruct such customers to make payment
directly to the Administrative Agent for such Borrower's account; and
(e) To take or bring, in the name of the Administrative Agent, the
Lenders or such Borrower, all steps, actions, suits or proceedings deemed
by the Administrative Agent necessary or desirable to enforce or effect
collection of the Accounts.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set forth
in subparagraphs (b), (d) and (e) above may only be exercised by the
Administrative Agent on and
106
113
after the occurrence and during the continuation of an Event of Default which
has not otherwise been waived by the Administrative Agent. The powers set forth
in subparagraphs (a) and (c) above may be exercised by the Administrative Agent
at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. Any Borrower shall default in the payment when due of
(i) any principal owing hereunder, under any of the Credit Documents or in
connection herewith or (ii) any interest, fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith and the failure to pay any such interest, fees or other amounts
shall continue for a period of three (3) or more days following receipt by
such Borrower of a notice of default from the Administrative Agent, or any
Lender, or if cured, any subsequent failure to pay such interest, fees or
other amounts shall occur and continue for a period of three (3) or more
days;
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the Credit
Documents, or in any written statement or certificate delivered pursuant
hereto or thereto shall prove untrue in any material respect on the date as
of which it was made or deemed to have been made;
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term
condition or agreement contained in Section 7.1(f)(i), Article VIII or
Article IX, or
(ii) default in the due performance or observance of any term or
condition in Section 7.1(a), (b) or (c) and such default shall remain
unremedied for a period of ten (10) Business Days after the earlier of
a Credit Party becoming aware of such default or notice thereof given
by the Administrative Agent.
(iii) default in the due performance or observance of any term,
covenant or agreement (other than those referred to in subsections
(a), (b), (c)(i) or (c)(ii) of this Section 11.1) contained in this
Agreement and such default shall continue unremedied for a period of
thirty (30) days after the earlier of a Credit Party becoming aware of
such default or notice thereof given by the Administrative Agent;
000
000
(x) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) any Credit Document shall fail to be in full force and effect
or to give an Agent and/or the Lenders the rights, powers and privileges
purported to be created thereby;
(e) Guaranties. Any Guarantor or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under a
Guaranty Agreement;
(f) Bankruptcy, etc. The occurrence of any Bankruptcy Event with
respect to a Credit Party;
(g) Defaults under Other Agreements. With respect to any Funded Debt
in excess of $1,000,000 (other than Funded Debt outstanding under this
Agreement) or the Subordinated Debt or the Senior Notes, (i) a Credit Party
shall (A) default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness, or
(B) default in the observance or performance relating to such Indebtedness
or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or permit, the holder or holders of such Indebtedness (or trustee or agent
on behalf of such holders) to cause (determined without regard to whether
any notice or lapse of time is required), any such Indebtedness to become
due prior to its stated maturity; or (ii) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity
thereof;
(h) Judgments. One or more judgments or decrees shall be entered
against a Credit Party involving a liability of $1,000,000 or more in the
aggregate (to the extent not paid or fully covered by insurance (subject to
payment of the applicable deductible) provided by a carrier who, upon
request, has not denied coverage) and any such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal within
thirty (30) days from the entry thereof;
(i) ERISA. The occurrence of any of the following events or
conditions, if the result could have or be reasonably expected to have a
Material Adverse Effect: (A) any "accumulated funding deficiency," as such
term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Single Employer
Plan, or any lien shall arise on the assets of a Borrower or any ERISA
Affiliate in favor of the PBGC or a Single Employer Plan; (B) a ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (C) a ERISA
Event shall occur with respect to a Multiemployer Plan or Multiple Employer
Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (1) the termination of such Plan for purposes of Title
IV of ERISA, or (2) any Borrower or any ERISA Affiliate incurring any
liability in connection with a withdrawal from,
108
115
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan; or
(D) any prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject any Borrower or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to
which any Borrower or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability;
(j) Ownership. There shall occur a Change of Control; or
(k) Subordinated Debt. The subordination provisions in any agreement
relating to Subordinated Debt shall, in whole or in part, terminate, cease
to be effective or cease to be legally valid, binding and enforceable as to
any holder of the Subordinated Debt.
11.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter, the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrowers, take any of the following actions
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against any Credit Party, except as otherwise specifically
provided for herein:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other indebtedness
or obligations of any and every kind owing by the Borrowers to any of the
Lenders hereunder to be due whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers.
(c) Cash Collateral. Direct the Borrowers to pay (and the Borrowers
agree that upon receipt of such notice, or upon the occurrence of an Event
of Default under Section 11.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
security for the LOC Obligations in respect of subsequent drawings under
all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding. Accrued interest on the cash collateral account shall be for
the account of the Borrowers, subject to the prior payment in full in cash
of all of the Obligations.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents or at law, including,
without limitation, the Guaranty Agreements and the Security Agreements,
and all rights of set-off.
109
116
Notwithstanding the foregoing, if an Event of Default specified in Section
11.1(f) shall occur, then the Commitments shall automatically terminate and
all Loans, all reimbursement obligations under Letters of Credit, all
accrued interest in respect thereof, all accrued and unpaid fees and other
indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or
other action by the Agents or the Lenders which notice or other action is
expressly waived by the Borrowers.
11.3. CONVERSION AND REDENOMINATION CERTAIN LOANS; PURCHASE OF RISK
PARTICIPATIONS.
(a) Conversion and Redenomination of Loans. Notwithstanding anything
herein to the contrary, upon a termination of the Commitments following the
occurrence of an Event of Default (a "Commitment Termination Event"), (i)
all outstanding Loans denominated in Canadian Dollars or bearing interest
at a rate other than the U.S. Base Rate shall be redenominated and/or
converted into U.S. Base Rate Loans denominated in Dollars and (ii) all BA
Obligations and LOC Obligations owed to a Lender in Canadian Dollars shall
be redenominated into BA Obligations and LOC Obligations owed in Dollars,
in each case on and with effect from the soonest practicable date following
the Commitment Termination Event as determined by the Administrative Agent
(the "Conversion Date") and at the Bank of Canada published noon exchange
rate or closing exchange rate (whichever is closer to the time of payment)
in effect as of such Conversion Date. The Borrowers hereby agree to pay to
the Administrative Agent, for the pro rata benefit of the Lenders, on the
Conversion Date any amounts owing pursuant to Section 4.14 as a result of
any such conversion occurring prior to the end of an Interest Period. The
Administrative Agent will promptly notify the Borrowers and the Lenders of
any such redenomination and conversion following a Commitment Termination
Event.
(b) Purchase of Risk Participations. Each Lender hereby agrees that
it shall forthwith purchase, as of the Conversion Date (but adjusted for
any payments received from a Borrower on or after such date and prior to
such purchase), from the other Lenders such Participation Interests in the
outstanding Loans, LOC Obligations and BA Obligations (whether or not such
Loans, LOC Obligations and BA Obligations have been redenominated or
converted pursuant to Section 11.3(a)) as shall be necessary to cause each
such Lender to share in all Loans, LOC Obligations and BA Obligations
ratably based upon its Commitment Percentage with respect to Participation
Interests in all Loans, LOC Obligations and BA Obligations (determined
before giving effect to any termination of the Commitments), provided that
(1) all interest and fees payable on a Loan, LOC Obligation or BA
Obligation shall be for the account of the Lender that originally extended
such Loan or issued or participated in the related Letters of Credit or
Bankers' Acceptances, as the case may be, until the date as of which the
respective Participation Interest is purchased and (2) if any purchase of a
Participation Interest required to be made pursuant to this sentence is not
made on the Conversion Date, then at the time such purchase is actually
made the purchasing Lender shall be required to pay to the selling Lender,
to the extent not paid to such selling Lender by the applicable Borrower in
accordance with the terms of this Credit Agreement, interest on the
principal amount of the Participation Interest purchased for each day from
and including the day
110
117
upon which such purchase of the Participation Interest would otherwise have
occurred to but excluding the date of actual payment for the purchase of
such Participation Interest, at the rate equal to the Federal Funds Rate.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement, the
Commitments made hereunder shall terminate on the Maturity Date and all then
outstanding Loans shall be immediately due and payable in full and all
outstanding Letters of Credit shall immediately terminate. Unless sooner
demanded in accordance with this Agreement, all Obligations shall become due and
payable as of any termination hereunder or under Article XI and, pending a final
accounting, the Administrative Agent may withhold, or cause to be withheld, any
balances in the Borrowers' Loan accounts, in an amount sufficient, in the
Administrative Agent's reasonable discretion, to cover all of the Obligations,
whether absolute or contingent, unless supplied with a satisfactory indemnity to
cover all of such Obligations. All of the Agents' and the Lenders' rights, liens
and security interests shall continue after any termination until all
Obligations have been paid and satisfied in full.
ARTICLE XIII
THE AGENTS
13.1 APPOINTMENT.
Each Lender hereby designates and appoints First Union as Administrative
Agent and National Bank of Canada, as Canadian Agent to act as specified herein
and the other Credit Documents, and each such Lender hereby authorizes the
Agents as the agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated by the terms hereof
and of the other Credit Documents, together with such other powers as are
reasonably incidental thereto, including, without limitation, holding all
Collateral and all payments of principal, interest, fees, charges and expenses
received pursuant to this Credit Agreement or any other Credit Document for the
benefit of the Lenders. Notwithstanding any provision to the contrary elsewhere
herein and in the other Credit Documents, the Agents shall not have any duties
or responsibilities, except those expressly set forth herein and therein, 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 of the other Credit Documents, or shall otherwise exist against
the Agents. The provisions of this Article are solely for the benefit of the
Agents and the Lenders and none of the members of the Consolidated Cott Group
shall have any rights as a third party beneficiary of the provisions hereof. In
performing its functions and duties under this Agreement and the other Credit
Documents, the Agents shall act solely as agent of the Lenders and do not assume
and shall not be deemed to have assumed any obligation or relationship of agency
or
111
118
trust with or for the Borrowers or any other member of the Consolidated Cott
Group. Notwithstanding any provision to the contrary in this Agreement or any of
the other Credit Documents, the Canadian Agent shall not take or omit to take
any discretionary action under this Agreement or any of the other Credit
Documents without the prior authorization of the Administrative Agent.
13.2 DELEGATION OF DUTIES.
The Agents may execute any of their respective duties hereunder or under
the other Credit Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agents shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected with reasonable care.
13.3 EXCULPATORY PROVISIONS.
Each of the Agents or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any member of the Consolidated Cott Group
contained herein or in any of the other Credit Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by an Agent under or in connection herewith or in connection with the other
Credit Documents, or enforceability or sufficiency therefor of any of the other
Credit Documents, or for any failure of any of the Borrowers to perform its
obligations hereunder or thereunder. An Agent shall not be responsible to any
Lender for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement, or any of the other Credit
Documents or for any representations, warranties, recitals or statements made
herein or therein or made by the Borrowers or any member of the Consolidated
Cott Group in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by an Agent to the Lenders or
by or on behalf of the Consolidated Cott Group to an Agent or any Lender or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Consolidated Cott Group. The Agents are not
trustees for the Lenders and owe no fiduciary duty to any of the Lenders.
13.4 RELIANCE ON COMMUNICATIONS.
The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers or any of the other members of the
Consolidated Cott Group, independent accountants
112
119
and other experts selected by the Administrative Agent with reasonable care).
Each of the Agents may deem and treat the Lenders as the owner of its respective
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the appropriate Agent
in accordance with Section 14.3(b). Each of the Agents shall be fully justified
in failing or refusing to take any action under this Agreement or under any of
the other Credit Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Each Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or under any of the other Credit Documents
in accordance with a request of the Required Lenders (or to the extent
specifically provided in Section 14.6, all the Lenders) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders (including their successors and assigns).
13.5 NOTICE OF DEFAULT.
An Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless such Agent has received
notice from a Lender or a member of the Consolidated Cott Group referring to the
Credit Document, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that an Agent receives such a
notice, such Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders.
13.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.
Each Lender expressly acknowledges that neither of the Agents nor any of
their officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, First Union Capital Markets Corp. ("FUCMC"); it
being understood that each reference to affiliate in this Section 13.6 shall
include FUCMC) has made any representations or warranties to it and that no act
by an Agent or any affiliate thereof hereinafter taken, including any review of
the affairs of the Consolidated Cott Group, shall be deemed to constitute any
representation or warranty by an Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon the Agents or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Consolidated Cott Group 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 the Agents or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Consolidated Cott Group. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agents
hereunder, the Agents shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
assets, property, financial or other conditions,
113
120
prospects or creditworthiness of the Consolidated Cott Group which may come into
the possession of an Agent or any of its respective officers, directors,
employees, agents, attorneys-in-fact or affiliates.
13.7 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 Commitments, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against an Agent in its respective capacity as such in any way relating to or
arising out of this Agreement or the other Credit 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 an 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
resulting from the gross negligence or willful misconduct of an Agent. If any
indemnity furnished to an Agent for any purpose shall, in the opinion of such
Agent, acting reasonably, be insufficient or become impaired, such Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The agreements
in this Section shall survive the payment of the Obligations and all other
amounts payable hereunder and under the other Credit Documents.
13.8 AGENT IN ITS INDIVIDUAL CAPACITY.
The Agents and their respective affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrowers or
any other member of the Consolidated Cott Group as though such Agents were not
agents hereunder. With respect to the Loans made, the Agents shall have the same
rights and powers under this Agreement as any Lender and may exercise the same
as though they were not agents hereunder, and the terms "Lender" and "Lenders"
shall include the Administrative Agent and the Canadian Agent in their
individual capacities.
13.9 SUCCESSOR AGENT.
An Agent may, at any time, resign upon twenty (20) days' written notice to
the Lenders. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent or Canadian Agent, as the case
may be. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within thirty (30) days after
the notice of resignation, then the retiring Agent shall select a successor
Agent provided that such successor is a Lender hereunder or a commercial bank
organized or licensed under the laws of the United States of America or any
State thereof or of Canada, as applicable, and has a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent or Canadian Agent, as the case may be, hereunder by a
successor, such successor Administrative Agent or Canadian Agent, as the case
may be, shall
114
121
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent or Canadian Agent, as the case
may be, and the retiring Administrative Agent or Canadian Agent, as the case may
be, shall be discharged from its duties and obligations as Administrative Agent
or Canadian Agent, as the case may be, as appropriate, under this Agreement and
the other Credit Documents and the provisions of this Section 13.9 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Agent under this Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs each of the Agents to enter
into the Security Documents for the benefit of the Lenders. Each Lender
authorizes and directs the Administrative Agent to make such changes to the
form of Acknowledgment Agreement attached hereto as Exhibit A as it deems
necessary from time to time in order to obtain any Acknowledgment Agreement
from any landlord, warehouseman, filler, packer, processor, mortgagee or
any other party who has an interest in any real property where Collateral
is located with respect to any Credit Party. Each Lender also authorizes
and directs each of the Agents to review and approve all agreements
regarding the lockboxes and the lockbox accounts (including the Lockbox
Agreements) on such terms as the Agents deem necessary. Each Lender hereby
agrees, and each holder of any Note by the acceptance thereof will be
deemed to agree, that, except as otherwise set forth herein, any action
taken by the Required Lenders or each of the Lenders, as applicable, in
accordance with the provisions of this Credit Agreement or the Security
Documents, and the exercise by the Required Lenders or each of the Lenders,
as applicable, of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Lenders. The Administrative Agent and, with the
prior approval of the Administrative Agent, the Canadian Agent, is hereby
authorized on behalf of all of the Lenders, without the necessity of any
notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or
Security Document which may be necessary or appropriate to perfect and
maintain perfected the security interest in and liens upon the Collateral
granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Administrative Agent and, with
the prior approval of the Administrative Agent, the Canadian Agent, at its
option and in its discretion, to release any Lien granted to or held by
either such Agent upon any Collateral (i) upon termination of the
Commitments and payment in cash and satisfaction of all of the Obligations
(including the LOC Obligations) at any time arising under or in respect of
this Credit Agreement or the Credit Documents or the transactions
contemplated hereby or thereby, (ii) constituting property being sold or
disposed of upon receipt of the proceeds of such sale by an Agent if the
applicable Credit Party certifies to such Agent that the sale or
disposition is made in compliance with Section 9.5 (and such Agent may rely
conclusively on any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless
such release is required to be approved by all of the Lenders hereunder.
Upon request by an Agent at any time,
115
122
the Lenders will confirm in writing such Agent's authority to release
particular types or items of Collateral pursuant to this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to
in writing by the Required Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
applicable Credit Party, the Administrative Agent and, with the prior
approval of the Administrative Agent, the Canadian Agent, shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to the
Administrative Agent for the benefit of the Lenders herein or pursuant
hereto upon the Collateral that was sold or transferred; provided that (i)
such Agent shall not be required to execute any such document on terms
which, in such Agent's opinion, acting reasonably, would expose such Agent
to liability or create any obligation or entail any consequence other than
the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations
or any Liens upon (or obligations of such Credit Party in respect of) all
interests retained by such Credit Party, including, without limitation, the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral. In the event of any sale or transfer of Collateral, or any
foreclosure with respect to any of the Collateral, the Administrative Agent
and, with the prior approval of the Administrative Agent, the Canadian
Agent, shall be authorized to deduct all of the expenses reasonably
incurred by such Agent from the proceeds of any such sale, transfer or
foreclosure.
(d) Neither Agent shall have any obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is owned by
the Credit Parties or is cared for, protected or insured or that the liens
granted to either such Agent herein or pursuant hereto have been properly
or sufficiently or lawfully created, perfected, protected or enforced or
are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to
either such Agent in this Section 13.10 or in any of the Security
Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the
Administrative Agent and, with the prior approval of the Administrative
Agent, the Canadian Agent, may act in any manner it may deem appropriate,
in its reasonable discretion, given either such Agent's own interest in the
Collateral as one of the Lenders and that either such Agent shall have no
duty or liability whatsoever to the Lenders, except for its gross
negligence or willful misconduct.
(e) The Administrative Agent hereby authorizes and appoints the
Canadian Agent as the Administrative Agent's attorney-in-fact, to exercise
all of the powers granted to the Canadian Agent in subsections (b) and (c)
of this Section 13.10 on behalf of the Administrative Agent in its capacity
as collateral agent under the Canadian Security Agreement.
116
123
ARTICLE XIV
MISCELLANEOUS
14.1 NOTICES.
Except as otherwise expressly provided herein, all notices, requests and
other communications shall have been duly given and shall be effective (a) when
delivered by hand, (b) when transmitted via telecopy (or other facsimile
device), (c) the Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address or telecopy numbers set forth on Schedule 14.1 attached hereto, or
at such other address as such party may specify by written notice to the other
parties hereto; provided, however, that if any notice is delivered on a day
other than a Business Day, or after 5:00 P.M. (Eastern time) on any Business
Day, then such notice shall not be effective until the next Business Day; and
provided further, that notices of default shall be effective only upon delivery
by hand or by a reputable national overnight air courier service (unless a
telecopy notice of default is sent and receipt is confirmed by telephone or
telecopy by a Senior Management Member or Senior Financial Officer of the
Company, in which case such notice of default shall be effective upon receipt).
14.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuation of an Event of Default, each Lender is authorized at
any time and from time to time, without presentment, demand, protest or other
notice of any kind (all of which rights being hereby expressly waived), to
set-off and to appropriate and apply any and all deposits (general or special)
and any other indebtedness at any time held or owing by such Lender (including,
without limitation branches, agencies or Affiliates of such Lender wherever
located) to or for the credit or the account of a Credit Party against
obligations and liabilities of a Credit Party to such Lender hereunder, under
the Notes, the other Credit Documents or otherwise, irrespective of whether such
Lender shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Lender subsequent thereto. Each Credit Party hereby agrees that any
Person purchasing a participation in the Loans and Commitments hereunder
pursuant to Section 14.3(c) may exercise all rights of set-off with respect to
its participation interest as fully as if such Person were a Lender hereunder.
14.3 BENEFIT OF AGREEMENT.
(a) Generally. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that a Borrower may not assign and transfer
any of its interests without prior written consent of the Lenders; and
provided further that the rights of each Lender to transfer, assign or
117
124
grant participations in its rights and/or obligations hereunder shall be
limited as set forth in this Section 14.3.
(b) Assignments. Subject to the consent of the Borrowers (provided,
however, that no consent shall be required during the existence and
continuation of an Event of Default) and of the Administrative Agent, which
consent shall not be unreasonably withheld, each Lender may assign all or a
portion of its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Exhibit M to one or more Eligible
Assignees; provided that any such assignment shall be in a minimum
aggregate amount of $5,000,000 of the Commitments and in integral multiples
of $1,000,000 above such amount and that each such assignment shall be of a
constant, not varying, percentage of all of the assigning Lender's rights
and obligations under this Agreement. Any assignment hereunder shall be
effective upon satisfaction of the conditions set forth in the preceding
sentence and delivery to the Administrative Agent of written notice of the
assignment together with a transfer fee of $3,500 (or with respect to an
assignment of the Canadian Revolving Loan Commitment, a transfer fee of
$1,750) payable to the Administrative Agent for its own account; provided
that any assignment of the Canadian Revolving Loan Commitment shall require
delivery of written notice of the assignment to the Canadian Agent together
with a transfer fee of $1,750 payable to the Canadian Agent for its own
account. Upon the effectiveness of any such assignment, the assignee shall
become a "Lender" for all purposes of this Agreement and the other Credit
Documents and, to the extent of such assignment, the assigning Lender shall
be relieved of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. Along such lines, the Borrowers agree
that upon effectiveness of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the assigning Lender
and to the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note (but
with notation thereon that it is given in substitution for and replacement
of the original Note or any replacement notes thereof). In addition to the
assignments permitted under this Section 14.3(b), any Lender may (without
notice to the Borrowers, the Administrative Agent or any other Lender and
without payment of any fee) (i) assign and pledge all or any portion of its
Loans and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank and (ii) assign all or any portion of its rights under this
Agreement and its Loans and its Notes to an Affiliate. No such assignment,
as set forth in the preceding sentence, shall release the assigning Lender
from its obligations hereunder.
By executing and delivering an assignment agreement in accordance with this
Section 14.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (i) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and the assignee warrants that it is an
Eligible Assignee; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, any of the
other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value
118
125
of this Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any member of the Consolidated Cott Group or the
performance or observance by any member of the Consolidated Cott Group of
any of its obligations under this Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee
confirms that it has received a copy of this Agreement, the other Credit
Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Agents, such assigning Lender 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 decisions in taking or not taking
action under this Agreement and the other Credit Documents; (vi) such
assignee appoints and authorizes the Agents to take such action on its
behalf and to exercise such powers under this Agreement or any other Credit
Document as are delegated to the Agents by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's rights, obligations or
rights and obligations hereunder; provided that (i) such selling Lender
shall remain a "Lender" for all purposes under this Agreement (such selling
Lender's obligations under the Credit Documents remaining unchanged) and
the participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or
waiver relating to this Agreement or the other Credit Documents except to
the extent any such amendment or waiver would (A) reduce the principal of
or rate of interest on or fees in respect of any Loans in which the
participant is participating, (B) postpone the date fixed for any payment
of principal (including extension of the Maturity Date but excluding any
mandatory prepayment), interest or fees in which the participant is
participating, or (C) release all or substantially all of the guaranties or
the collateral (except as expressly provided in the Credit Documents)
supporting any of the Loans or Commitments in which the participant is
participating, and (iii) sub-participations by the participant (except to
an affiliate, parent company or affiliate of a parent company of the
participant) shall be prohibited. In the case of any such participation,
the participant shall not have any rights under this Agreement or the other
Credit Documents (the participant's rights against the selling Lender in
respect of such participation to be those set forth in the participation
agreement with such Lender creating such participation) and all amounts
payable by the Borrowers hereunder shall be determined as if such Lender
had not sold such participation, provided, however, that such participant
shall be entitled to receive additional amounts under Sections 4.9 through
4.14; provided that such participant shall not be entitled to receive any
amount greater than such selling Lender would have received had such Lender
not sold such participation.
119
126
14.4 NO WAIVER; REMEDIES CUMULATIVE.
The Borrowers hereby waive due diligence, demand, presentment and protest
and any notices thereof as well as notice of nonpayment. No failure or delay on
the part of an Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrowers or any other Credit Party and an Agent or any Lender shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Agents or any
Lender would otherwise have. No notice to or demand on the Borrowers in any case
shall entitle the Borrowers or any other Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
14.5 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to: (a) pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent and FUCMC in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of Xxxxx & Xxx
Xxxxx, PLLC, special counsel to the Agents as well as Canadian counsel to the
Agents) and any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Borrowers under this Agreement or any other Credit
Party under the other Credit Documents and of the Administrative Agent and the
Lenders in connection with enforcement of the Credit Documents and the documents
and instruments referred to therein (including, without limitation, in
connection with any such enforcement, the reasonable fees and disbursements of
counsel for the Administrative Agent and each of the Lenders); (ii) pay and hold
each of the Lenders harmless from and against any and all claims for
Non-Excluded Taxes as set forth in Section 4.13 and hold each of the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such
Lender) to pay such Non-Excluded Taxes; and (iii) indemnify each Agent, FUCMC
and each Lender, its officers, directors, employees, representatives and agents
from and hold each of them harmless against any and all losses, liabilities,
claims, damages or expenses incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of, any investigation, litigation
or other proceeding (whether or not any Agent, FUCMC or Lender is a party
thereto) related to the entering into and/or performance of any Credit Document
or the use of proceeds of any Loans (including other extensions of credit)
hereunder or the consummation of any other transactions contemplated in any
Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent they relate to disputes solely between
or among the Lenders (excluding First Union acting in its capacity as
Administrative Agent or National Bank of Canada acting in its capacity as
Canadian Agent) or they are incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified).
120
127
14.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither the amendment or waiver of any provision of this Credit Agreement
or any other Credit Document, nor the consent to any departure by any Borrower
or other Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, or if the Lenders shall
not be parties thereto, by the parties thereto and consented to by the Required
Lenders, and each such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall unless in writing and signed by all
the Lenders, do any of the following: (a) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (b) except as
otherwise expressly provided in this Credit Agreement, reduce the principal of,
or interest on, any Note or any Letter of Credit reimbursement obligations or
any fees hereunder, (c) postpone any date fixed for any payment in respect of
principal of, or interest on, any Note or any Letter of Credit reimbursement
obligations or any fees hereunder, (d) change the percentage of the Commitments,
or any minimum requirement necessary for the Lenders or the Required Lenders to
take any action hereunder, (e) amend or waive this Section 14.6, or change the
definition of Required Lenders, (f) release any Borrower or any Guarantor, (g)
except as otherwise expressly provided in this Credit Agreement, and other than
in connection with the financing, refinancing, sale or other disposition of any
asset of the Credit Parties permitted under this Credit Agreement, release any
Liens in favor of the Lenders on any material portion of the Collateral or (h)
increase the advance rates used to calculate the Borrowing Base and, provided,
further, that no amendment, waiver or consent affecting the rights or duties of
the Agents or the Issuing Lender under any Credit Document shall in any event be
effective, unless in writing and signed by the Agents and/or the Issuing Lender,
as applicable, in addition to the Lenders required hereinabove to take such
action. Notwithstanding any of the foregoing to the contrary, the consent of the
Borrowers shall not be required for any amendment, modification or waiver of the
provisions of Article XIII (other than the provisions of Section 13.9). In
addition, the Borrowers and the Lenders hereby authorize the Administrative
Agent to modify this Credit Agreement by unilaterally amending or supplementing
Schedule 1.1A from time to time in the manner requested by the Borrowers, the
Agents or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrowers
and each Lender.
14.7 DEFAULTING LENDER.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then it shall not be entitled to vote on any matter requiring the consent
of the Required Lenders or to object to any matter requiring the consent of all
the Lenders; provided, however, that all other benefits and obligations under
the Credit Documents shall apply to such Defaulting Lender.
14.8 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
where so executed and delivered shall be an original, but all of which shall
constitute one and the same
121
128
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart. Delivery of an executed
counterpart by telecopy shall be as effective as delivery of a manually executed
counterpart hereto and shall constitute a representation that an original
executed counterpart will be provided.
14.9 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
14.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Agreement, the
making of the Loans, the issuance of the Letters of Credit, and the repayment of
the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.
14.11 CURRENCY.
The use of term "dollars" or "Dollars" or the symbol "$" or "U.S. $" in the
Credit Documents shall mean a reference to lawful money of the United States of
America unless specifically indicated otherwise.
14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to
this Credit Agreement or any other Credit Document shall be brought in the
courts of the State of North Carolina in Mecklenburg County or of the
United States for the Western District of North Carolina, and, by execution
and delivery of this Credit Agreement, each of the Borrowers hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Borrowers further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to it at the address set out for notices pursuant to Section 14.1, such
service to become effective three (3) days after such mailing. Nothing
herein shall affect the right of the Administrative Agent or any Lender to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Borrower in any other
jurisdiction.
(b) Each of the Borrowers hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit
122
129
Document brought in the courts referred to in subsection (a) above and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) The Company hereby irrevocably appoints CT Corporation System,
which currently maintains a North Carolina office situated at 000
Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, as its agent to receive
service of process or other legal summons for purposes of any legal action
or proceeding. So long as the Company has any obligation under this Credit
Agreement or any of the Credit Documents, it will maintain a duly appointed
agent in North Carolina for the service of such process or summons, and if
it fails to maintain such an agent, any such process or summons may be
served by mailing a copy thereof by registered mail, or a form of mail
substantially equivalent thereto, addressed to it at its address as
provided for notices hereunder.
14.13 ARBITRATION.
(a) Notwithstanding the provisions of Section 14.12 to the contrary,
upon demand of any party hereto, whether made before or after institution
of any judicial proceeding, any dispute, claim or controversy arising out
of, connected with or relating to this Credit Agreement and other Credit
Documents ("Disputes") between or among parties to this Credit Agreement
shall be resolved by binding arbitration as provided herein. Institution of
a judicial proceeding by a party does not waive the right of that party to
demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from Credit
Documents executed in the future, or claims arising out of or connected
with the transaction reflected by this Credit Agreement.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA") and Title 9 of the U.S. Code.
All arbitration hearings shall be conducted in Charlotte, North Carolina. A
hearing shall begin within ninety (90) days of demand for arbitration and
all hearings shall be concluded within one hundred twenty (120) days of
demand for arbitration. These time limitations may not be extended unless a
party shows cause for extension and then no more than a total extension of
sixty (60) days. The expedited procedures set forth in Rule 51 et seq. of
the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any
Dispute. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys selected from the Commercial Financial
Dispute Arbitration Panel of the AAA. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of
general jurisdiction, state or federal, of the state where the hearing will
be conducted or if such person is not available to serve, the single
arbitrator may be a licensed attorney. The parties hereto do not waive
applicable Federal or state substantive law except as provided herein. A
judgment upon the award may be entered in any court having jurisdiction.
Notwithstanding the foregoing, this arbitration provision does not apply to
disputes under or related to Hedging Agreements.
123
130
(b) Notwithstanding the preceding binding arbitration provisions, the
Administrative Agent, the Lenders and the Borrowers agree to preserve,
without diminution, certain remedies that the Administrative Agent on
behalf of the Lenders may employ or exercise freely, independently or in
connection with an arbitration proceeding or after an arbitration action is
brought. The Administrative Agent on behalf of the Lenders shall have the
right to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable (i) all rights
to foreclose against any real or personal property or other security by
exercising a power of sale granted under Credit Documents or under
applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, setoff, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment.
Any claim or controversy with regard to the Administrative Agent's
entitlement on behalf of the Lenders to exercise such remedies is a
Dispute. Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party in a
Dispute.
(c) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or
which may arise in the future in connection with any Dispute whether the
Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Credit Agreement, each of the
parties hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to
any arbitration proceedings conducted under the Arbitration Rules in
Charlotte, North Carolina and irrevocably agrees to be bound by any final
judgment rendered thereby in connection with this Credit Agreement from
which no appeal has been taken or is available.
14.14 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.15 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
124
131
14.16 LOAN ENTIRETY.
This Agreement together with the other Credit Documents represent the
entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein; provided, however, that the Administrative
Agent Fee Letter shall remain in effect subsequent to the execution and delivery
of this Agreement.
14.17 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF EXISTING CREDIT
AGREEMENT; FURTHER ASSURANCES.
This Agreement shall become effective at such time, on or after the
Closing Date, that the conditions precedent set forth in Section 5.1 have been
satisfied and when it shall have been executed by each Borrower and the Agents,
and the Agents shall receive copies hereof (telecopied or otherwise) which, when
taken together, bear the signatures of each Lender (including the Issuing
Lenders), and thereafter this Agreement shall be binding upon and inure to the
benefit of each Borrower, each Lender (including the Issuing Lenders) and the
Agents, together with their respective successors and assigns. The Borrowers
agree, upon the request of the Administrative Agent and/or the Required Lenders,
to promptly take such actions, as reasonably requested, as are appropriate to
carry out the intent of this Agreement and the other Credit Documents,
including, but not limited to, such actions as are reasonably necessary to
ensure that the Lenders have a perfected security interest in all collateral
securing the Obligations, subject to no Liens other than Permitted Liens.
14.18 CONFIDENTIALITY.
The Agents and the Lenders agree to keep confidential (and to cause
their respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Agents or any such Lender by or on behalf of the Credit Parties
(whether before or after the Closing Date) which relates to the Credit Parties
(the "Information"). Notwithstanding the foregoing, the Agents and Lenders shall
be permitted to disclose Information (i) to its affiliates, officers, directors,
employees, agents and representatives in connection with their participation in
any of the transactions evidenced by this Agreement or any other Credit
Documents or the administration of this Agreement or any other Credit Documents
(so long as such Persons are notified of the confidential nature of the
information); (ii) to the extent required by applicable laws and regulations or
by any subpoena or similar legal process, or requested by any Governmental
Authority; (iii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Credit Agreement or any agreement
entered into pursuant to clause (iv) below, (B) becomes available to the Agents
or any Lender on a non-confidential basis or (C) was available to the Agents or
Lenders on a non-confidential basis prior to its disclosure to the Agents or any
Lender by the Credit Parties; (iv) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first specifically agrees in a writing
furnished to and for the benefit of the parties hereto to be bound by the terms
of this Section; (v) to Gold Sheets and other similar bank
125
132
trade publications; such information to consist of deal terms and other
information customarily found in such publications or (vi) to the extent that
the Credit Parties shall have consented in writing to such disclosure. Nothing
set forth in this Section shall obligate the Agents or any Lender to return any
materials furnished by the Credit Parties.
14.19 JUDGMENT CURRENCY.
(a) If for the purposes of obtaining judgment in any court it is
necessary to convert all or any part of the Indebtedness or any other
amount due to the Lenders hereunder or under any security in respect of the
Borrowers' obligations hereunder in any currency (the "Original Currency")
into another currency (the "Other Currency") each Borrower to the fullest
extent that it may effectively do so, agrees that the rate of exchange used
shall be that at which, in accordance with normal banking procedures, the
Administrative Agent could purchase the Original Currency with the Other
Currency at its principal offices in Charlotte, North Carolina on the day
(a "Business Day") on which the Administrative Agent is open for the
transaction of its banking business at such offices immediately preceding
the day on which any such judgment, or any relevant part thereof, is paid
or otherwise satisfied.
(b) The obligation of each Borrower in respect of any sum due in the
Original Currency from it to the Lenders hereunder or under any security in
respect of the Borrowers' obligation hereunder shall, notwithstanding any
judgment in any Other Currency, be discharged only to the extent that on
the Business Day following receipt by the Agents of any sum adjudged to be
so due in such Other Currency or of any other sum in any Other Currency the
Agents may, in accordance with their normal banking procedures, purchase
the Original Currency with such Other Currency. If the amount of the
Original Currency so purchased is less than the sum originally due to the
Lenders in the Original Currency, the Borrowers shall, as a separate
obligation and notwithstanding any such judgment, indemnify the Agents
against such loss, and if the amount of the Original Currency so purchased
exceeds the sum originally due to the Lenders, the Agents shall remit such
excess to the Borrowers.
14.20 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this Credit
Agreement or in any other Credit Document, the Borrowers, the Administrative
Agent, the Canadian Agent and the Lenders hereby agree that all agreements among
them under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly limited
so that in no contingency or event whatsoever shall the amount paid, or agreed
to be paid, to the Administrative Agent or any Lender for the use, forbearance,
or detention of the money loaned to any Borrower and evidenced hereby or thereby
or for the performance or payment of any covenant or obligation contained herein
or therein (including, in relation to any amount payable hereunder by any
Canadian Borrower or to any Canadian Lender, any amount constituting "interest"
for purposes of section 347 of the Criminal Code (Canada) or any successor
provision in force at the relevant time, and references in this Section 14.20
shall be read accordingly), exceed the Highest Lawful Rate. If due to any
circumstance whatsoever,
126
133
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance any
Lender should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding hereunder or
on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the applicable Borrower. All sums paid or agreed to
be paid to the Administrative Agent, the Canadian Agent or any Lender for the
use, forbearance, or detention of the Obligations and other indebtedness of the
Borrowers to the Administrative Agent, the Canadian Agent or any Lender shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full so
that the actual rate of interest on account of all such indebtedness does not
exceed the Highest Lawful Rate throughout the entire term of such indebtedness.
The terms and provisions of this Section shall control every other provision of
this Credit Agreement and all agreements among the Borrowers, the Administrative
Agent, the Canadian Agent and the Lenders.
14.21 CONCERNING JOINT AND SEVERAL LIABILITY OF THE U.S. BORROWERS.
(a) Each of the U.S. Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation to be
provided by the Lenders under this Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the U.S. Borrowers and in
consideration of the undertakings of each of the U.S. Borrowers to accept
joint and several liability for the obligations of each of them.
(b) Each of the U.S. Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but also as
a co-debtor, joint and several liability with the other U.S. Borrowers with
respect to the payment and performance of all of the Obligations, it being
the intention of the parties hereto that all the Obligations shall be the
joint and several obligations of each of the U.S. Borrowers without
preferences or distinction among them.
(c) If and to the extent that any of the U.S. Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or
to perform any of the Obligations in accordance with the terms thereof,
then in each such event, the other U.S. Borrowers will make such payment
with respect to, or perform, such Obligation.
(d) The obligations of each U.S. Borrower under the provisions of this
Section 14.21 constitute full recourse obligations of such U.S. Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Credit
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein or in the other
Credit Documents, each U.S. Borrower hereby waives notice of acceptance of
its joint and
127
134
several liability, notice of any Loan made under this Credit Agreement,
notice of occurrence of any Event of Default, or of any demand for any
payment under this Credit Agreement, notice of any action at any time taken
or omitted by any Lender under or in respect of any of the Obligations, any
requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Credit Agreement. Each
U.S. Borrower hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by any Lender at any time or times in respect of any
default by any U.S. Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Credit Agreement, any and
all other indulgences whatsoever by any Lender in respect of any of the
Obligations, and the taking, addition, substitution or release, in whole or
in part, at any time or times, of any security for any of the Obligations
or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part,
of any U.S. Borrower. Without limiting the generality of the foregoing,
each U.S. Borrower assents to any other action or delay in acting or
failure to act on the part of any Lender, including, without limitation,
any failure strictly or diligently to assert any right or to pursue any
remedy or to comply fully with the applicable laws or regulations
thereunder which might, but for the provisions of this Section 14.21,
afford grounds for terminating, discharging or relieving such U.S.
Borrower, in whole or in part, from any of its obligations under this
Section 14.21, it being the intention of each U.S. Borrower that, so long
as any of the Obligations remain unsatisfied, the obligations of such U.S.
Borrower under this Section 14.21 shall not be discharged except by
performance and then only to the extent of such performance. The
Obligations of each U.S. Borrower under this Section 14.21 shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect
to any U.S. Borrower or any Lender. The joint and several liability of the
U.S. Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of
any Borrower or any Lender.
(f) The provisions of this Section 14.21 are made for the benefit of
the Lenders and their respective successors and assigns, and may be
enforced by any such Person from time to time against any of the U.S.
Borrowers as often as occasion therefor may arise and without requirement
on the part of any Lender first to marshal any of its claims or to exercise
any of its rights against any of the other U.S. Borrowers or to exhaust any
remedies available to it against any of the other U.S. Borrowers or to
resort to any other source or means of obtaining payment of any of the
Obligations or to elect any other remedy. The provisions of this Section
14.21 shall remain in effect until all the Obligations shall have been paid
in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by any Lender upon the insolvency,
bankruptcy or reorganization of any of the U.S. Borrowers, or otherwise,
the provisions of this Section 14.21 will forthwith be reinstated in
effect, as though such payment had not been made.
128
135
(g) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the joint obligations
of a U.S. Borrower shall be adjudicated to be invalid or unenforceable for
any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each U.S. Borrower hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the U.S. federal Bankruptcy Code).
(h) The U.S. Borrowers hereby agree, as among themselves, that if any
U.S. Borrower shall become an Excess Funding Borrower (as defined below),
each other U.S. Borrower shall, on demand of such Excess Funding Borrower
(but subject to the next sentence hereof and to subsection (B) below), pay
to such Excess Funding Borrower an amount equal to such U.S. Borrower's Pro
Rata Share (as defined below and determined, for this purpose, without
reference to the properties, assets, liabilities and debts of such Excess
Funding Borrower) of such Excess Payment (as defined below). The payment
obligation of any U.S. Borrower to any Excess Funding Borrower under this
Section 14.21(h) shall be subordinate and subject in right of payment to
the prior payment in full of the Obligations of such U.S. Borrower under
the other provisions of this Credit Agreement, and such Excess Funding
Borrower shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such Obligations. For
purposes hereof, (i) "Excess Funding Borrower" shall mean, in respect of
any Obligations arising under the other provisions of this Credit Agreement
(hereafter, the "Joint Obligations"), a U.S. Borrower that has paid an
amount in excess of its Pro Rata Share of the Joint Obligations; (ii)
"Excess Payment" shall mean, in respect of any Joint Obligations, the
amount paid by an Excess Funding Borrower in excess of its Pro Rata Share
of such Joint Obligations; and (iii) "Pro Rata Share", for the purposes of
this Section 14.21(h), shall mean, for any U.S. Borrower, the ratio
(expressed as a percentage) of (A) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such U.S. Borrower (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such U.S. Borrower hereunder) to (B) the
amount by which the aggregate present fair salable value of all assets and
other properties of such U.S. Borrower and all of the other U.S. Borrowers
exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such U.S. Borrower and the other U.S.
Borrowers hereunder) of such U.S. Borrower and all of the other U.S.
Borrowers, all as of the Closing Date (if any U.S. Borrower becomes a party
hereto subsequent to the Closing Date, then for the purposes of this
Section 14.21(h) such subsequent U.S. Borrower shall be deemed to have been
a U.S. Borrower as of the Closing Date and the information pertaining to,
and only pertaining to, such U.S. Borrower as of the date such U.S.
Borrower became a U.S. Borrower shall be deemed true as of the Closing
Date).
14.22 CONCERNING JOINT AND SEVERAL LIABILITY OF THE CANADIAN BORROWERS.
(a) Each of the Canadian Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation to be
provided by the Lenders
129
136
under this Credit Agreement, for the mutual benefit, directly and
indirectly, of each of the Canadian Borrowers and in consideration of the
undertakings of each of the Canadian Borrowers to accept joint and several
liability for the obligations of each of them.
(b) Each of the Canadian Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but also as
a co-debtor, joint and several liability with the other Canadian Borrowers
with respect to the payment and performance of all of the Canadian
Obligations, it being the intention of the parties hereto that all the
Canadian Obligations shall be the joint and several obligations of each of
the Canadian Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Canadian Borrowers shall fail
to make any payment with respect to any of the Canadian Obligations as and
when due or to perform any of the Canadian Obligations in accordance with
the terms thereof, then in each such event, the other Canadian Borrowers
will make such payment with respect to, or perform, such Canadian
Obligation.
(d) The obligations of each Canadian Borrower under the provisions of
this Section 14.22 constitute full recourse obligations of such Canadian
Borrower, enforceable against it to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Credit Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein or in the other
Credit Documents, each Canadian Borrower hereby waives notice of acceptance
of its joint and several liability, notice of any Loan made under this
Credit Agreement, notice of occurrence of any Event of Default, or of any
demand for any payment under this Credit Agreement, notice of any action at
any time taken or omitted by any Lender under or in respect of any of the
Canadian Obligations, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with
this Credit Agreement. Each Canadian Borrower hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any
of the Canadian Obligations, the acceptance of any partial payment thereon,
any waiver, consent or other action or acquiescence by any Lender at any
time or times in respect of any default by any Canadian Borrower in the
performance or satisfaction of any term, covenant, condition or provision
of this Credit Agreement, any and all other indulgences whatsoever by any
Lender in respect of any of the Canadian Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Canadian Obligations or in part, at
any time or times, of any security for any of the Canadian Obligations or
the addition, substitution or release, in whole or in part, of any Canadian
Borrower. Without limiting the generality of the foregoing, each Canadian
Borrower assents to any other action or delay in acting or failure to act
on the part of any Lender, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to
comply fully with the applicable laws or regulations thereunder which
might, but for the provisions of this Section 14.22, afford grounds for
terminating, discharging or relieving such Canadian Borrower, in whole or
in part, from
130
137
any of its obligations under this Section 14.22, it being the intention of
each Canadian Borrower that, so long as any of the Canadian Obligations
remain unsatisfied, the obligations of such Canadian Borrower under this
Section 14.22 shall not be discharged except by performance and then only
to the extent of such performance. The Canadian Obligations of each
Canadian Borrower under this Section 14.22 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
Canadian Borrower or any Lender. The joint and several liability of the
Canadian Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of
any Borrower or any Lender.
(f) The provisions of this Section 14.22 are made for the benefit of
the Lenders and their respective successors and assigns, and may be
enforced by any such Person from time to time against any of the Canadian
Borrowers as often as occasion therefor may arise and without requirement
on the part of any Lender first to marshal any of its claims or to exercise
any of its rights against any of the other Canadian Borrowers or to exhaust
any remedies available to it against any of the other Canadian Borrowers or
to resort to any other source or means of obtaining payment of any of the
Canadian Obligations or to elect any other remedy. The provisions of this
Section 14.22 shall remain in effect until all the Canadian Obligations
shall have been paid in full or otherwise fully satisfied. If at any time,
any payment, or any part thereof, made in respect of any of the Canadian
Obligations, is rescinded or must otherwise be restored or returned by any
Lender upon the insolvency, bankruptcy or reorganization of any of the
Canadian Borrowers, or otherwise, the provisions of this Section 14.22 will
forthwith be reinstated in effect, as though such payment had not been
made.
(g) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the joint obligations
of a Canadian Borrower shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable
federal, state or provincial law relating to fraudulent conveyances or
transfers) then the obligations of each Canadian Borrower hereunder shall
be limited to the maximum amount that is permissible under applicable law
(whether federal, state or provincial and including, without limitation,
the U.S. federal Bankruptcy Code, or Canadian or provincial).
(h) The Canadian Borrowers hereby agree, as among themselves, that if
any Canadian Borrower shall become an Excess Funding Borrower (as defined
below), each other Canadian Borrower shall, on demand of such Excess
Funding Borrower (but subject to the next sentence hereof and to subsection
(B) below), pay to such Excess Funding Borrower an amount equal to such
Canadian Borrower's Pro Rata Share (as defined below and determined, for
this purpose, without reference to the properties, assets, liabilities and
debts of such Excess Funding Borrower) of such Excess Payment (as defined
below). The payment obligation of any Canadian Borrower to any Excess
Funding Borrower under this Section 14.22(h) shall be subordinate and
subject in right of payment to the prior payment in full of the Canadian
Obligations of such Canadian
131
138
Borrower under the other provisions of this Credit Agreement, and such
Excess Funding Borrower shall not exercise any right or remedy with respect
to such excess until payment and satisfaction in full of all of such
Canadian Obligations. For purposes hereof, (i) "Excess Funding Borrower"
shall mean, in respect of any Canadian Obligations arising under the other
provisions of this Credit Agreement (hereafter, the "Joint Canadian
Obligations"), a Canadian Borrower that has paid an amount in excess of its
Pro Rata Share of the Joint Canadian Obligations; (ii) "Excess Payment"
shall mean, in respect of any Joint Canadian Obligations, the amount paid
by an Excess Funding Borrower in excess of its Pro Rata Share of such Joint
Canadian Obligations; and (iii) "Pro Rata Share", for the purposes of this
Section 14.22(h), shall mean, for any Canadian Borrower, the ratio
(expressed as a percentage) of (A) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Canadian Borrower (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Canadian Borrower hereunder) to (B) the
amount by which the aggregate present fair salable value of all assets and
other properties of such Canadian Borrower and all of the other Canadian
Borrowers exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Canadian Borrower and the other Canadian
Borrowers hereunder) of such Canadian Borrower and all of the other
Canadian Borrowers, all as of the Closing Date (if any Canadian Borrower
becomes a party hereto subsequent to the Closing Date, then for the
purposes of this Section 14.22(h) such subsequent Canadian Borrower shall
be deemed to have been a Canadian Borrower as of the Closing Date and the
information pertaining to, and only pertaining to, such Canadian Borrower
as of the date such Canadian Borrower became a Canadian Borrower shall be
deemed true as of the Closing Date).
14.23 NONLIABILITY OF AGENTS AND LENDERS.
The relationship between any Borrower on the one hand and the Lenders and
the Agents on the other hand shall be solely that of borrower and lender.
Neither the Agents nor any Lender shall have any fiduciary responsibilities to
any Borrower. Neither the Agents nor any Lender undertakes any responsibility to
any Borrower to review or inform such Borrower of any matter in connection with
any phase of such Borrower's business or operations.
14.24 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.25 POWER OF ATTORNEY.
Each Subsidiary Borrower hereby agrees that by its execution of this
Agreement, such Subsidiary Borrower appoints each of Xxxxx X. Xxxxx, III,
President & Chief Executive Officer, Xxxxxxx Xxxxxxx, Chief Financial Officer,
Xxxx Dell'Aquila, Controller and Xxxxxxxxx Xxxxxxx, Treasurer, of the Company,
to be its attorneys ("its Attorneys") and in its name and on its behalf and as
its act and deed or otherwise to sign all documents and carry out all such acts
as
132
139
are necessary or appropriate in connection with executing any Notice of
Borrowing, Notice of Extension/Conversion or any Borrowing Base Certificate or
any security documents (the "Documents") in connection with this Agreement or
any other Credit Document. This Power of Attorney shall be valid for the
duration of the term of this Agreement. Each Subsidiary Borrower hereby
undertakes to ratify everything which either of its Attorneys shall do in order
to execute the Documents mentioned herein.
[Remainder of page intentionally left blank]
133
140
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
CANADIAN BORROWER:
COTT CORPORATION
By: /s/ Xxxxx Xxxxxx /s/ Xxxx Dell'Aquila
-----------------------------------------------
Name:
Title: Sr. VP VP & Controller
U.S. SUBSIDIARY BORROWERS:
COTT USA CORP.
By: /s/ Xxxxx Xxxxxx /s/ Xxxx Dell'Aquila
-----------------------------------------------
Name:
Title: Sr. VP VP & Controller
COTT BEVERAGES USA, INC.
By: /s/ Xxxxx Xxxxxx /s/ Xxxx Dell'Aquila
-----------------------------------------------
Name:
Title: Sr. VP VP & Controller
BCB USA CORP.
By: /s/ Xxxxx Xxxxxx /s/ Xxxx Dell'Aquila
-----------------------------------------------
Name:
Title: Sr. VP VP & Controller
141
LENDERS:
FIRST UNION NATIONAL BANK, in its capacity as
Administrative Agent and as a Lender
By: /s/ Xxxx X. Tizainor
-----------------------------------------------
Name: Xxxx X. Tizainor
Title: Vice President
ii
142
National Bank of Canada, in its
capacity as Canadian Agent and as a Lender
By: /s/ Xxxxxxx Xxxx
-----------------------------------------------
Name: Xxxxxxx Xxxx
Title: Regional Manager
By: /s/ Xxxxx Xxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Manager
iii
143
National City Commercial Finance, Inc.,
as a Lender
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxx
Title: VP
iv
