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EXHIBIT 10.22
LOAN AGREEMENT
($22,000,000 U.S. REVOLVING LOAN FACILITY,
$10,000,000 CANADIAN REVOLVING LOAN FACILITY
AND
$32,500,000 TERM LOAN FACILITY)
DATED AS OF NOVEMBER 20, 1998
AMONG
NATIONAL TANK COMPANY,
AS U.S. BORROWER,
NATCO CANADA, LTD.,
AS CANADIAN BORROWER,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS U.S. AGENT AND AS A U.S. LENDER,
THE BANK OF NOVA SCOTIA,
AS CANADIAN AGENT AND AS A CANADIAN LENDER
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
AND JOINED IN BY
NATCO GROUP INC.
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TABLE OF CONTENTS
Page
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1. Definitions..............................................................................................1
1.1 Certain Defined Terms.........................................................................1
1.2 Miscellaneous................................................................................30
2. Commitments; Loans; BA's and Letters of Credit..........................................................30
2.1 Loans and BA's...............................................................................30
2.2 Letters of Credit............................................................................31
2.3 Certain Provisions Relating to Bankers' Acceptances..........................................36
2.4 Terminations, Reductions or Reallocations of Commitments....................................39
2.5 Commitment Fees..............................................................................40
2.6 Several Obligations..........................................................................41
2.7 Notes........................................................................................41
2.8 Use of Proceeds..............................................................................42
2.9 Currency Fluctuations........................................................................42
3. Borrowings, Prepayments and Interest Options............................................................43
3.1 Borrowings...................................................................................43
3.2 Prepayments..................................................................................43
3.3 Interest Options.............................................................................46
4. Payments; Pro Rata Treatment; Computations, Etc.........................................................51
4.1 Payments.....................................................................................51
4.2 Pro Rata Treatment...........................................................................53
4.3 Certain Actions, Notices, Etc................................................................53
4.4 Non-Receipt of Funds by Any Agent............................................................54
4.5 Sharing of Payments, Etc.....................................................................55
5. Conditions Precedent....................................................................................55
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances....................................55
5.2 All Loans, Letters of Credit and Bankers' Acceptances........................................58
6. Representations and Warranties..........................................................................58
6.1 Organization.................................................................................58
6.2 Financial Statements.........................................................................58
6.3 Enforceable Obligations; Authorization.......................................................59
6.4 Other Debt...................................................................................59
6.5 Litigation...................................................................................59
6.6 Title........................................................................................60
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6.7 Taxes........................................................................................60
6.8 Regulations U and X..........................................................................60
6.9 Subsidiaries.................................................................................60
6.10 No Untrue or Misleading Statements...........................................................60
6.11 ERISA........................................................................................60
6.12 Investment Company Act.......................................................................60
6.13 Public Utility Holding Company Act...........................................................60
6.14 Solvency.....................................................................................61
6.15 Fiscal Year..................................................................................61
6.16 Compliance...................................................................................61
6.17 Environmental Matters........................................................................61
6.18 Collateral Covered...........................................................................61
7. Affirmative Covenants...................................................................................62
7.1 Taxes, Existence, Regulations, Property, Etc.................................................62
7.2 Financial Statements and Information.........................................................62
7.3 Financial Tests..............................................................................63
7.4 Inspection...................................................................................64
7.5 Further Assurances...........................................................................64
7.6 Books and Records............................................................................64
7.7 Insurance....................................................................................64
7.8 Notice of Certain Matters....................................................................64
7.9 Capital Adequacy.............................................................................65
7.10 ERISA Information and Compliance.............................................................66
7.11 Additional Security Documents................................................................66
7.12 Year 2000....................................................................................67
8. Negative Covenants......................................................................................67
8.1 Borrowed Money Indebtedness..................................................................67
8.2 Liens........................................................................................68
8.3 Contingent Liabilities.......................................................................68
8.4 Mergers, Consolidations and Dispositions of Assets...........................................68
8.5 Redemption, Dividends and Distributions......................................................69
8.6 Nature of Business...........................................................................70
8.7 Transactions with Related Parties............................................................70
8.8 Loans and Investments........................................................................70
8.9 Subsidiaries.................................................................................70
8.10 Key Agreements...............................................................................71
8.11 Organizational Documents.....................................................................71
8.12 Unfunded Liabilities.........................................................................71
8.13 Operating Lease Expenses.....................................................................71
8.14 Sale/Leasebacks..............................................................................71
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8.15 Subordinated Indebtedness....................................................................71
8.16 Acquisitions.................................................................................71
8.17 Negative Pledges.............................................................................71
9. Defaults................................................................................................72
9.1 Events of Default............................................................................72
9.2 Right of Setoff..............................................................................75
9.3 Collateral Account...........................................................................75
9.4 Preservation of Security for Letter of Credit Liabilities....................................76
9.5 Currency Conversion After Maturity...........................................................76
9.6 Remedies Cumulative..........................................................................77
10. Agents..................................................................................................77
10.1 Appointment, Powers and Immunities...........................................................77
10.2 Reliance.....................................................................................78
10.3 Defaults.....................................................................................78
10.4 Material Written Notices.....................................................................79
10.5 Rights as a Lender...........................................................................79
10.6 Indemnification..............................................................................79
10.7 Non-Reliance on Agents and Other Lenders.....................................................80
10.8 Failure to Act...............................................................................80
10.9 Resignation or Removal of Agent..............................................................80
10.10 No Partnership...............................................................................81
10.11 Authority of Agent...........................................................................81
11. Miscellaneous...........................................................................................81
11.1 Waiver.......................................................................................81
11.2 Notices......................................................................................82
11.3 Expenses, Etc................................................................................82
11.4 Indemnification..............................................................................83
11.5 Amendments, Etc..............................................................................83
11.6 Successors and Assigns.......................................................................84
11.7 Limitation of Interest.......................................................................87
11.8 Survival.....................................................................................88
11.9 Captions.....................................................................................88
11.10 Counterparts.................................................................................88
11.11 Governing Law................................................................................88
11.12 Severability.................................................................................88
11.13 Tax Forms; Net Payments......................................................................88
11.14 Interest Act (Canada)........................................................................89
11.15 Judgment Currency............................................................................89
11.16 Conflicts Between This Agreement and the Other Loan Documents................................89
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11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination................................89
11.18 Confidentiality..............................................................................90
11.19 Amendment and Restatement....................................................................90
EXHIBITS
A-1 -- Request for Extension of Credit (U.S. Borrower)
A-2 -- Request for Extension of Credit (Canadian Borrower)
B -- Rate Designation Notice
C -- Canadian Revolving Note
D -- U.S. Revolving Note
E -- Assignment and Acceptance
F -- Compliance Certificate
G -- Bankers' Acceptance Notice
H -- Canadian Dollar Revolving Note
I -- Borrowing Base Certificate
J -- Term Note
K -- Permitted Sales
L -- Subsidiaries
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of November 20, 1998
(the "Effective Date"), by and among NATIONAL TANK COMPANY, a Delaware
corporation (the "U.S. Borrower"); NATCO CANADA, LTD., a corporation formed
under the laws of the Province of Ontario (the "Canadian Borrower"); each of
the lenders which is or may from time to time become a party hereto
(individually, a "Lender" and, collectively, the "Lenders", which terms shall
include U.S. Lenders and Canadian Lenders); CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION ("Chase Texas"), a national banking association, as agent for the
U.S. Lenders (in such capacity, together with its successors in such capacity,
the "U.S. Agent"), and THE BANK OF NOVA SCOTIA ("BNS"), as agent for the
Canadian Lenders (in such capacity, together with its successors in such
capacity, the "Canadian Agent").
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
In this Agreement, terms defined above shall have the meanings
ascribed to them above. Unless a particular term, word or phrase is otherwise
defined or the context otherwise requires, capitalized terms, words and phrases
used herein or in the Loan Documents (as hereinafter defined) have the
following meanings (all definitions that are defined in this Agreement or in
the Loan Documents in the singular have the same meanings when used in the
plural and vice versa):
Acceptance Fee means the fee payable in Canadian Dollars to each
Canadian Lender in respect of the Bankers' Acceptances accepted by such
Canadian Lender computed in accordance with Section 2.3(c).
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of Texas as Sections 1 through 11 of the Texas Business and Commerce
Code, in force on the Effective Date.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional Collateral Event shall have the meaning ascribed to such
term in Section 7.8 hereof.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest
on the Notes at the Stated Rate and any Acceptance Fee) which, under applicable
laws, are or may be deemed to constitute interest on the indebtedness evidenced
by the Notes or any other amounts owing under any Loan Document.
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Adjusted LIBOR means, with respect to each Interest Period applicable
to a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agents means U.S. Agent and Canadian Agent, collectively.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance
sheet as of the end of the fiscal year relating thereto and an income statement
and a statement of cash flows for such fiscal year, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP in all material respects, and accompanied by
the opinion of independent certified public accountants of recognized national
standing, which shall state that such financial statements present fairly in
all material respects the financial position of such Person and, if such Person
has any Subsidiaries, its consolidated Subsidiaries as of the date thereof and
the results of its operations for the period covered thereby in conformity with
GAAP. As to Borrowers only, Annual Financial Statements shall also include
unaudited consolidating financial statements for the applicable Borrower and
unaudited consolidated financial statements for the applicable Borrower and its
Subsidiaries, each in Proper Form, certified in each case by the chief
financial officer or other authorized officer of the applicable Borrower as
presenting fairly in all material respects the consolidating or consolidated,
as the case may be, financial position of the applicable Person. Annual
Financial Statements for Canadian Borrower may be adjusted to conform with
generally accepted Canadian accounting principles, consistently applied.
Applicable BA Discount Rate means, as applicable to a Bankers'
Acceptance being purchased by any Canadian Lender on any day, the percentage
discount rate (expressed to two decimal places and rounded upward, if
necessary, to the nearest 1/100th of 1%) quoted by the Canadian Agent as that
at which the Canadian Agent would, in accordance with normal practice, at or
about 12:00 noon (Toronto, Ontario time), on such day, be prepared to purchase
Bankers' Acceptances in an amount and having a maturity date comparable to the
amount and maturity date of such Bankers' Acceptances.
Applicable Canadian Pension Legislation means, at any time, any
federal or provincial pension legislation then applicable to the Canadian
Borrower, including the Employment Pension
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Plans Act (Alberta), the Pension Benefits Act (Ontario) and the Income Tax Act
(Canada), including all regulations made thereunder, and all rules,
regulations, rulings and interpretations made or issued by any Governmental
Authority having or asserting jurisdiction in respect thereof.
Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of any Person.
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6(b).
Availability Period means, for each Lender, the period from and
including the Effective Date to (but not including) the Termination Date.
BA Discount Proceeds means in respect of any Bankers' Acceptance being
purchased by a Canadian Lender on any day under Section 2.3, 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 multiplying:
(A) the face amount of such Bankers' Acceptance; by
(B) the quotient equal to one divided by 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 remaining in the term of such Bankers'
Acceptance and the denominator of which is 365;
with such quotient being rounded up or down to the nearest
fifth decimal place and .000005 being rounded up.
Bankers' Acceptance or BA means a xxxx of exchange denominated in
Canadian Dollars drawn by the Canadian Borrower on and accepted by a Canadian
Lender pursuant to Section 2.3 hereof.
Bankers' Acceptance Liabilities means, at any time and in respect of
any Bankers' Acceptance, the face amount thereof if still outstanding and
unpaid or, following maturity and payment thereof, the aggregate unpaid amount
of all Reimbursement Obligations at that time due and payable in respect of the
payment of such Bankers' Acceptance upon maturity.
Bankers' Acceptance Notice has the meaning specified in Section
2.3(a).
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Bankruptcy Code means (i) the United States Bankruptcy Code, (ii) the
Bankruptcy and Insolvency Act (Canada) and (iii) the Companies' Creditors
Arrangement Act (Canada), as the same may be amended and together with any
successor statutes.
Base Rate means, for any day, a rate per annum equal to the lesser of
(a) the then applicable Margin Percentage from time to time in effect plus the
greater of (1) the applicable Prime Rate for that day and (2) the Federal Funds
Rate for that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason any
applicable Agent shall have determined (which determination shall be conclusive
and binding, absent manifest error) that it is unable to ascertain the Federal
Funds Rate for any reason, including, without limitation, the inability or
failure of Agent to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall, until the circumstances giving rise to such
inability no longer exist, be the lesser of (a) the applicable Prime Rate plus
the then applicable Margin Percentage from time to time in effect or (b) the
Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments evidencing borrowed money, (iii) all obligations of such Person
under conditional sale or other title retention agreements relating to Property
purchased by such Person, (iv) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services (excluding obligations
of such Person to creditors for raw materials, inventory, services and supplies
and deferred payments for services to employees and former employees incurred
in the ordinary course of such Person's business), (v) all lease obligations of
such Person which have been capitalized on the balance sheet of such Person in
accordance with GAAP, (vi) all obligations of others secured by any Lien on
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, equal to the lesser of the amount of such
obligation or the fair market value of such Property, (vii) Interest Rate Risk
Indebtedness of such Person, (viii) all obligations of such Person in respect
of outstanding letters of credit issued for the account of such Person or
bankers' acceptances drawn by such Person and (ix) all guarantees of such
Person.
Borrowers means U.S. Borrower and Canadian Borrower, collectively.
Borrowing Base Certificate shall mean a certificate, duly executed by
the chief executive officer, chief financial officer, treasurer or controller
of Borrowers, appropriately completed and in substantially the form of Exhibit
I hereto. Each Borrowing Base Certificate shall be effective only as accepted
by Agents (and with such revisions, if any, as Agents may reasonably require as
a condition to such acceptance).
Business Day means any day other than a day on which commercial banks
are authorized or required to close in Houston, Texas or Toronto, Ontario.
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Calculation Date means the last Business Day of each month.
Canadian Borrowing Base means, as at any date, the amount of the
Canadian Borrowing Base shown on the Borrowing Base Certificate then most
recently delivered pursuant to Section 7.2(b) hereof, determined by calculating
the amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts of the
Canadian Subsidiaries at said date, plus
(ii) the sum of (x) 20% of that portion of Eligible Inventory of
the Canadian Subsidiaries at said date (determined at the
lower of cost or market on a consistent basis) which consists
of used finished goods, (y) 25% of that portion of Eligible
Inventory of the Canadian Subsidiaries at said date
(determined at the lower of cost or market on a consistent
basis) which consists of work-in-process relating to projects
for customers that are not account debtors with respect to
any Accounts owing to the Canadian Subsidiaries which are not
Eligible Accounts and (z) 50% of the aggregate amount of all
other Eligible Inventory of the Canadian Subsidiaries at said
date (determined at the lower of cost or market on a
consistent basis); provided that the amount calculated
pursuant to this clause (ii) shall not -------- -----------
exceed 50% of the Canadian Borrowing Base.
In the absence of a current Borrowing Base Certificate, Canadian Agent shall
determine the Canadian Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the Canadian Borrowing Base from time to time so determined shall be the
Borrowing Base for all purposes of this Agreement until a current Borrowing
Base Certificate, in Proper Form, is furnished to and accepted by Canadian
Agent. For purposes of calculating the Canadian Borrowing Base, all amounts or
values expressed in Canadian Dollars shall be converted into Dollars at the
Exchange Rate in effect as of the date of the applicable Borrowing Base
Certificate.
Canadian Commitment means, as to any Canadian Lender, the obligation,
if any, of such Canadian Lender to make Canadian Revolving Loans, incur or
participate in Letter of Credit Liabilities relating to Canadian Letters of
Credit and accept and purchase Bankers' Acceptances in an aggregate principal
amount at any one time outstanding up to (but not exceeding) the amount, if
any, set forth opposite such Canadian Lender's name on the signature pages
hereof under the caption "Canadian Commitment", or otherwise provided for in an
Assignment and Acceptance Agreement (as the same may be increased or reduced
from time to time pursuant to Section 2.4 hereof).
Canadian Dollars or C$ means lawful money of Canada.
Canadian Dollar Revolving Notes means the Notes of Canadian Borrower
evidencing the Canadian Revolving Loans denominated in Canadian Dollars, in the
form of Exhibit H hereto.
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Canadian Lender means each lender party hereto with any Canadian
Commitment or any outstanding Canadian Obligations.
Canadian Letters of Credit has the meaning assigned to such term in
Section 2.2 hereof.
Canadian Obligations means, as at any date of determination thereof,
the sum of the following (determined without duplication): (i) the aggregate
principal amount of Canadian Revolving Loans outstanding hereunder on such
date, plus (ii) the aggregate amount of the Bankers' Acceptance Liabilities
outstanding on such date, plus (iii) the aggregate amount of Letter of Credit
Liabilities outstanding on such date relating to Canadian Letters of Credit.
For purposes of calculating the aggregate amount of Canadian Obligations, all
amounts or values expressed in Canadian Dollars shall be converted into Dollars
at the Exchange Rate in effect as of the date of determination.
Canadian Prime Loans means Canadian Revolving Loans made pursuant to
Section 2.1(b) hereof which are denominated in Canadian Dollars.
Canadian Prime Rate means, on any day, as to Loans denominated in
Canadian Dollars made to Canadian Borrower, the greater of (a) the annual rate
of interest announced from time to time by BNS as its prime rate then in effect
at its Principal Office, being the reference rate used by BNS for determining
interest rates on commercial loans denominated in Canadian Dollars to borrowers
in Canada, and (b) an annual rate of interest equal to the sum of (i) the CDOR
Rate and (ii) 1.00% per annum. The Canadian Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate, and
Chase Texas, BNS, each Agent and each Lender disclaims any statement,
representation or warranty to the contrary. Chase Texas, BNS, any Agent or any
Lender may make commercial loans or other loans at rates of interest at, above
or below the Canadian Prime Rate.
Canadian Revolving Loan means any revolving credit loan made pursuant
to Section 2.1(b) hereof.
Canadian Revolving Notes means the Notes of Canadian Borrower
evidencing the Canadian Revolving Loans denominated in Dollars, in the form of
Exhibit C hereto.
Canadian Subsidiaries means Subsidiaries which are organized under the
laws of the Dominion of Canada, a Province of the Dominion of Canada or any
political subdivision thereof.
Capital Expenditures means, with respect to any Person for any period,
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations incurred during such period (to the extent not
already included), which would be reflected as additions to Property, plant or
equipment on a balance sheet of such Person and its consolidated Subsidiaries,
if any, prepared in accordance with GAAP; but excluding expenditures during
such period for the repair or replacement of any fixed or capital asset which
was destroyed, damaged or taken, in whole or in
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part, to the extent financed by the proceeds of an insurance policy maintained
by such Person or the proceeds of a condemnation award.
CDOR Rate means, on any day, an annual rate of interest equal to the
average 30 day rate applicable to Canadian bankers' acceptances appearing on
the "Reuters Screen CDOR Page" on such day, or if such day is not a Business
Day, then on the immediately preceding Business Day; provided, however, if such
rate does not appear on the Reuters Screen CDOR Page as contemplated, then the
CDOR Rate on any day shall be calculated as the arithmetic mean of the 30 day
rates applicable to Canadian bankers' acceptances quoted by the Canadian
Lenders which are listed in Schedule I to the Bank Act (Canada) as of 12:00
noon (Toronto, Ontario time) on such day, or if such day is not a Business Day,
then on the immediately preceding Business Day.
Ceiling Rate means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable United States
federal or Texas laws or, in the case of advances made in Canada by Canadian
Lenders to Canadian Borrower, whichever of applicable Canada federal or Ontario
laws (or the laws of any other jurisdiction whose usury laws are deemed to
apply to the Notes or any other Loan Documents despite the intention and desire
of the express choice of law provisions set forth herein) permits the higher
interest rate, stated as a rate per annum. On each day, if any, that Chapter 1D
establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly ceiling"
(as defined in Section 303 of the Texas Finance Code) for that day. U.S. Agent
may from time to time, as to current and future balances, implement any other
ceiling under the Texas Finance Code or Chapter 1D by notice to Borrowers, if
and to the extent permitted by the Texas Finance Code or Chapter 1D. Without
notice to Borrowers or any other Person, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law fluctuates.
Chapter 1D means Chapter 1D of Title 79, Texas Rev. Civ. Stats. 1925,
as amended.
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal
or mixed, now or hereafter subject to the Liens created pursuant to any of the
Security Documents.
Commitment Fee Percentage means (i) on any day prior to October 1,
1998, 0.50% per annum and (ii) on and after October 1, 1998, the applicable per
annum percentage set forth at the appropriate intersection in the table shown
below, based on the Debt to Capitalization Ratio as of the last day of the most
recently ended fiscal quarter of U.S. Borrower calculated by U.S. Agent as soon
as practicable after receipt by U.S. Agent of all financial reports required
under this Agreement with respect to such fiscal quarter (including a
Compliance Certificate) (provided, however, that if the Commitment Fee
Percentage is increased as a result of the reported Debt to Capitalization
Ratio, such increase shall be retroactive to the date that U.S. Borrower was
obligated to deliver such
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financial reports to U.S. Agent pursuant to the terms of this Agreement and
provided further, however, that if the Commitment Fee Percentage is decreased
as a result of the reported Debt to Capitalization Ratio, and such financial
reports are delivered to U.S. Agent not more than ten (10) calendar days after
the date required to be delivered pursuant to the terms of this Agreement, such
decrease shall be retroactive to the date that U.S. Borrower was obligated to
deliver such financial reports to U.S. Agent pursuant to the terms of this
Agreement):
Debt to Commitment
Capitalization Ratio Fee Percentage
-------------------- --------------
Greater than or equal to 50% 0.50
Greater than or equal to 40% but
less than 50% 0.40
Greater than or equal to 30% but
less than 40% 0.30
Less than 30% 0.25
Commitment Percentage means, as to any Lender, the percentage
equivalent of a fraction the numerator of which is the amount of such Lender's
U.S. Commitment or Canadian Commitment, as the case may be, and the denominator
of which is the aggregate amount of the U.S. Commitments or Canadian
Commitments, as the case may be, of all Lenders.
Compliance Certificate shall have the meaning given to it in Section
7.2(c) hereof.
Contribution Agreements means those certain Contribution Agreements
dated concurrently herewith executed by and among, respectively, (i) U.S.
Borrower and the Guarantors in respect of the U.S. Obligations and (ii)
Canadian Borrower and the Guarantors in respect of the Canadian Obligations, as
they may from time to time be amended, modified, restated or supplemented.
Controlled Group means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code or under Applicable Canadian Pension
Legislation.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities or any Bankers' Acceptance
Liabilities shall be effected by paying to U.S. Agent or Canadian Agent, as the
case may be, immediately available funds, to be held by U.S. Agent or Canadian
Agent, as the case may be, in a collateral account maintained by
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U.S. Agent or Canadian Agent, as the case may be, at its Principal Office and
collaterally assigned to U.S. Agent or Canadian Agent, as the case may be, as
security for the applicable Obligations using documentation reasonably
satisfactory to U.S. Agent or Canadian Agent, as the case may be, in the amount
required by any applicable provision hereof. Such amount shall be retained by
U.S. Agent or Canadian Agent, as the case may be, in such collateral account
until such time as the applicable Letter of Credit shall have expired and the
Reimbursement Obligations, if any, with respect thereto shall have been fully
satisfied or the applicable Bankers' Acceptance shall have matured and the
related Bankers' Acceptance Liabilities shall have been fully satisfied;
provided, however, that at such time if a Default or Event of Default has
occurred and is continuing, U.S. Agent or Canadian Agent, as the case may be,
shall not be required to release such amount in such collateral account from
the time of such collateral assignment until such Default or Event of Default
shall have been cured or waived.
Currency Exchange Risk Indebtedness means all obligations and
indebtedness of U.S. Borrower with respect to the program for the hedging of
currency exchange risk provided for in any program entered into by U.S.
Borrower for the purpose of reducing U.S. Borrower's and its Subsidiaries'
exposure to currency exchange fluctuations and not for speculative purposes,
approved in writing by U.S. Agent (such approval not to be unreasonably
withheld), as it may from time to time be amended, modified, restated or
supplemented.
Debt Service means, with respect to any Person for any period, the sum
of (i) Interest Expense for such period and (ii) scheduled principal payments
on obligations included within Borrowed Money Indebtedness for such period.
Debt to Capitalization Ratio means, as of any day, the ratio,
expressed as a percentage, of (a) Borrowed Money Indebtedness of U.S. Borrower
and its Subsidiaries, on a consolidated basis, as of such date (exclusive of
the categories of Borrowed Money Indebtedness, other than obligations in
respect of bankers' acceptances, described in clauses (vii), (viii) and (ix) of
the definition of "Borrowed Money Indebtedness" set forth in this Section 1.1)
to (b) Total Capitalization as of such date.
Default means an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of
Default.
Dollars, US$ and $ means lawful money of the United States of America.
Dual Lender means any Lender which has both a U.S. Commitment and a
Canadian Commitment.
EBITDA means, without duplication, for any period the consolidated net
earnings (excluding any extraordinary gains or losses) of U.S. Borrower and its
Subsidiaries, on a consolidated basis, plus, to the extent deducted in
calculating consolidated net income, depreciation, amortization, other non-cash
items, Interest Expense, federal, state and provincial income tax expense and
non-operating
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and medical retiree expenses of U.S. Borrower and minus, to the extent added in
calculating consolidated net income, any non-cash items.
Eligible Accounts shall mean, as at any date of determination thereof,
each Account of a Person which is subject to a Lien created by any Security
Document and on which U.S. Agent (as to U.S. Borrower or any of its
Subsidiaries (other than Canadian Subsidiaries)) or Canadian Agent (as to any
Canadian Subsidiary) shall have a first-priority perfected Lien (subject only
to Permitted Liens) which is at said date payable to such Person and which
complies with the following requirements: (a) (i) the subject goods have been
sold to an account debtor on an absolute sale basis on open account and not on
consignment, on approval or on a "sale or return" basis or subject to any other
repurchase or return agreement and no material part of the subject goods has
been returned, rejected, lost or damaged (provided that the foregoing shall not
disqualify accounts arising from goods sold with usual and customary sales
warranties or having warranty claims which are not material), (ii) the Account
is stated to be payable in Dollars (as to any Eligible Accounts owned by U.S.
Borrower or any of its Subsidiaries (other than Canadian Subsidiaries)) or
Canadian Dollars (as to any Canadian Subsidiary) and is not evidenced by
chattel paper or an instrument of any kind (unless the applicable Agent has a
perfected first priority Lien (subject only to Permitted Liens) on such chattel
paper or instrument) and said account debtor is not insolvent or the subject of
any bankruptcy or insolvency proceedings of any kind unless the applicable
Person has received a letter of credit, bond or other financial guarantee in an
amount equal to or greater than such Account issued by a Qualified Institution
and otherwise in form and substance satisfactory to Agents; (b) the account
debtor must be located in the United States (as to any Eligible Accounts owned
by U.S. Borrower or any of its Subsidiaries (other than Canadian Subsidiaries))
or in the United States or Canada (as to any Canadian Subsidiary), except for
(x) Accounts as to which the applicable Person has received a letter of credit,
bond or other financial guarantee in an amount equal to or greater than such
Account issued by a Qualified Institution and otherwise in form and substance
satisfactory to Agents and (y) other Accounts approved in writing by Agents;
(c) it is a valid obligation of the account debtor thereunder and is not
subject to any offset or other defense on the part of such account debtor or to
any claim on the part of such account debtor denying liability thereunder
(provided that the foregoing shall not disqualify accounts arising from goods
sold with usual and customary sales warranties or having warranty claims which
are not material); (d) it is subject to no Lien whatsoever, except for the
Liens created or permitted pursuant to the Loan Documents; (e) it is evidenced
by an invoice submitted to the account debtor in timely fashion and in the
normal course of business; (f) it has not remained unpaid beyond 90 days after
the date of the invoice (provided, however, that the limitation set forth in
this clause shall not apply to UPRC Receivables); (g) it does not arise out of
transactions with an employee, officer, agent, director or stockholder of the
applicable Person or any Affiliate of such Person; (h) not more than 20% (or
such higher percentage as Agents may approve in writing for any particular
account debtor) of the other Accounts of the applicable account debtor or any
of its Affiliates fail to satisfy all of the requirements of an "Eligible
Account"; (i) inclusion of the applicable Account does not cause the total
Eligible Accounts with respect to the applicable account debtor and its
Affiliates, in the aggregate, to exceed 10% of the total Eligible Accounts
(provided, however, that the limitation set forth in this clause shall not
apply to Investment Grade Account Debtors or to UPRC Receivables), and (j) each
of the representations and warranties set
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forth in the Security Documents executed by the applicable Person with respect
thereto is true and correct in all material respects on such date. In the event
of any dispute under the foregoing criteria, about whether an Account is or has
ceased to be an Eligible Account, the decision of Agents, made in good faith,
shall be conclusive and binding, absent manifest error.
Eligible Inventory shall mean, as at any date of determination
thereof, Inventory of a Person which is subject to a Lien created by any
Security Documents and on which U.S. Agent (as to U.S. Borrower or any of its
Subsidiaries (other than Canadian Subsidiaries)) or Canadian Agent (as to any
Canadian Subsidiary) shall have a first-priority perfected Lien (subject only
to Permitted Liens) and which complies with the following requirements: (a)
such Inventory shall be valued in accordance with GAAP and consist of (i)
eligible raw materials, (ii) work-in-process and (iii) finished goods, provided
that all such Inventory shall be within the United States of America (as to
U.S. Borrower or any of its Subsidiaries (other than Canadian Subsidiaries)) or
in the United States of America or Canada (as to any Canadian Subsidiary); (b)
it is in good condition, meets all standards imposed by any Governmental
Authority having regulatory authority over it, its use and/or sale and is
either currently usable or currently salable in the normal course of business
of the applicable Person; (c) it is not in the possession or control of any
warehouseman, bailee, or any agent or processor for or customer of the
applicable Person or, if it is, (i) the applicable Person shall have notified,
in a manner that effectively under applicable law creates a valid and first
priority Lien in favor of the applicable Agent in such Inventory, such
warehouseman, bailee, agent, processor or customer of the applicable Agent's
Lien and (ii) such warehouseman, bailee, agent, processor or customer has
subordinated any Lien it may claim therein and agreed to hold all such
Inventory during the continuance of an Event of Default for the applicable
Agent's account subject to the applicable Agent's instructions, and (d) each of
the representations and warranties set forth in the Security Documents executed
by the applicable Person with respect thereto is true and correct in all
material respects on such date. In the event of any dispute under the foregoing
criteria, about whether a portion of Inventory is or has ceased to be Eligible
Inventory, the decision of Agents, made in good faith, shall be conclusive and
binding, absent manifest error.
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution, contamination, protection or clean-up
of the air, surface water, ground water or land; (iii) solid, gaseous or liquid
waste generation, handling, treatment, storage, disposal or transportation;
(iv) exposure to Hazardous Substances; (v) the safety or health of employees or
(vi) the manufacture, processing, distribution in commerce, use, discharge or
storage of Hazardous Substances. An "Environmental Claim" includes, but is not
limited to, a common law action, as well as a proceeding to issue, modify or
terminate an Environmental Permit to the extent that such a proceeding attempts
to redress violations of an applicable permit, license, or regulation as
alleged by any Governmental Authority.
Environmental Liabilities means all liabilities arising from any
Environmental Claim, Environmental Permit or Requirements of Environmental Law
under any theory of recovery, at law
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or in equity, and whether based on negligence, strict liability or otherwise,
including but not limited to remedial, removal, response, abatement,
investigative, monitoring, personal injury and damage to Property or injuries
to persons, and any other related costs, expenses, losses, damages, penalties,
fines, liabilities and obligations, and all costs and expenses necessary to
cause the issuance, reissuance or renewal of any Environmental Permit including
reasonable attorneys' fees and court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or
wastes into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants or Hazardous
Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder and, as the context may require, Applicable Canadian
Pension Legislation.
Eurodollar Rate means for any day during an Interest Period for a
LIBOR Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage from time to time in effect and (b) the Ceiling
Rate. Each Eurodollar Rate is subject to adjustments for reserves, insurance
assessments and other matters as provided for in Sections 3.3 and 11.17 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar Reserve
Requirement by any Agent shall be conclusive and binding, absent manifest
error, and may be computed using any reasonable averaging and attribution
method.
Event of Default shall have the meaning assigned to it in Section 9.1
hereof.
Excess Cash Flow means, without duplication, for any period, (i)
EBITDA for such period less (ii) the sum of the principal component of all Debt
Service of U.S. Borrower and its Subsidiaries (other than mandatory prepayments
of the Term Loans calculated on the basis of Excess Cash Flow), cash Interest
Expense of U.S. Borrower and its Subsidiaries, voluntary prepayments of all
Borrowed Money Indebtedness of U.S. Borrower and its Subsidiaries, federal,
state and provincial income taxes allocated to U.S. Borrower and its
Subsidiaries, Permitted Dividends (exclusive of dividends
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described in clause (iii)(5) of the definition of "Permitted Dividends") and
Capital Expenditures of U.S. Borrower and its Subsidiaries for such period.
Excess Cash Flow Percentage means (i) 75% at all such times as the
aggregate payments made pursuant to Section 3.2(b)(2) hereof is less than or
equal to the aggregate amount of the dividends made pursuant to clause (iii)(2)
of the definition of "Permitted Dividends" set forth in this Section 1 and (ii)
50% at all other times.
Exchange Rate means, on any day, (a) with respect to Canadian Dollars
in relation to Dollars, the spot rate as quoted by the Bank of Canada as its
noon spot rate at which Dollars are offered on such day for Canadian Dollars,
and (b) with respect to Dollars in relation to Canadian Dollars, the spot rate
as quoted by The Bank of Canada as its noon spot rate at which Canadian Dollars
are offered on such day for Dollars.
EXIM Facility means that certain International Revolving Loan
Agreement dated June 30, 1997 executed by and between U.S. Borrower and Chase
Texas and the other security documents contemplated thereby (as the foregoing
may be amended from time to time).
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any such day which is a
Business Day, the average of the quotations for such day on such transactions
received by U.S. Agent from three Federal funds brokers of recognized standing
selected by U.S. Agent in its sole and absolute discretion.
Financing Statements means all such Uniform Commercial Code or
Canadian provincial personal Property security financing statements as any
Agent shall reasonably require, in Proper Form, duly executed by the applicable
Borrower (or any other applicable Obligor) to give notice of and to perfect or
continue perfection of the applicable Agent's Liens in any applicable
Collateral, as any of the foregoing may from time to time be amended, modified,
supplemented or restated.
Fixed Charge Coverage Ratio means, as of any day, the ratio, expressed
as a percentage, of (a) Pro Forma EBITDA for the 12 months ending on such day
less the current portion of federal, state and provincial income tax expense
recognized during such 12-month period to (b) the sum of (1) the principal
component of Debt Service for such 12-month period plus (2) cash Interest
Expense for such 12-month period paid by U.S. Borrower and its Subsidiaries for
such 12-month period plus (3) Permitted Dividends by U.S. Borrower or by any
Subsidiary of U.S. Borrower to any Person other than U.S. Borrower (or a
wholly-owned Subsidiary of U.S. Borrower) for such 12-month period plus (4)
actual Capital Expenditures paid by U.S. Borrower and its Subsidiaries for such
12- month period plus (5) for any day during the fiscal year 1999 and only if
Borrower shall have paid Permitted Dividends pursuant to clause (2) of the
definition of "Permitted Dividends", the amount by which $3,000,000 exceeds
actual Capital Expenditures paid by U.S. Borrower and its Subsidiaries
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for such 12-month period plus (6) for any day after the fiscal year 1999 and
only if Borrower shall have paid Permitted Dividends pursuant to clause (2) of
the definition of "Permitted Dividends", the amount by which $1,000,000 exceeds
actual Capital Expenditures paid by U.S. Borrower and its Subsidiaries for such
12-month period.
Foreign Subsidiaries means Subsidiaries which are organized under the
laws of a jurisdiction other than the United States of America, any State of
the United States or any political subdivision thereof.
Funding Loss means, with respect to (a) any Borrower's payment of
principal of a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period; (b) any Borrower's failure to borrow a LIBOR
Borrowing or to borrow funds by way of Bankers' Acceptances on the date
specified by such Borrower; (c) any Borrower's failure to make any prepayment
of the Loans (other than Base Rate Borrowings and Canadian Prime Loans) on the
date specified by such Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to Section 3.3, in each case
whether voluntary or involuntary, any loss, expense, penalty, premium or
liability actually incurred by any Lender (including but not limited to any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such United States accounting
practice as, in the opinion of independent certified public accountants of
recognized national standing regularly retained by such Person, conforms at the
time to generally accepted accounting principles, consistently applied for all
periods after the Effective Date so as to present fairly the financial
condition, and results of operations and cash flows, of such Person. If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board, all reports and financial statements required
hereunder may be prepared in accordance with such change so long as the
applicable Person provides to Agents such disclosures of the impact of such
change as any Agent may reasonably require. No such change in any accounting
principle or practice shall, in itself, cause a Default or Event of Default
hereunder (but Borrowers, Agents and Lenders shall negotiate in good faith to
replace any financial covenants hereunder to the extent such financial
covenants are affected by such change in accounting principle or practice).
Governmental Authority means any governmental authority of the United
States of America, Canada, any State of the United States, any Province of
Canada, or of any other foreign jurisdiction and any political subdivision of
any of the foregoing, and any central bank, agency, department, commission,
board, bureau, court or other tribunal having or asserting jurisdiction over
any Agent, any Lender, any Obligor or their respective Property.
Group means NATCO Group Inc., a Delaware corporation.
Guaranties means, collectively, (i) the Guaranties dated concurrently
herewith executed by Group and each Subsidiary of U.S. Borrower (other than
Foreign Subsidiaries) in favor of U.S.
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Agent, for the benefit of U.S. Lenders, (ii) the Guaranties dated concurrently
herewith executed by U.S. Borrower, Group and each Subsidiary of U.S. Borrower
(other than Foreign Subsidiaries) in favor of Canadian Agent, for the benefit
of Canadian Lenders and (iii) any and all other guaranties hereafter executed
in favor of any Agent, for the benefit of U.S. Lenders or Canadian Lenders,
relating to the Obligations, as any of them may from time to time be amended,
modified, restated or supplemented.
Hazardous Substance means petroleum products, and any hazardous or
toxic waste or substance defined or regulated as such from time to time by any
law, rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Interest Expense means, for any period, total interest expense
accruing on Borrowed Money Indebtedness of U.S. Borrower and its Subsidiaries
during such period (including interest expense attributable to capitalized
leases and net costs under interest rate swap, collar, cap or similar
agreements providing interest rate protection), determined in accordance with
GAAP.
Interest Options means the Base Rate, each Eurodollar Rate and, as to
the Canadian Dollar Revolving Notes only, the Canadian Prime Rate, and
"Interest Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings and for
Canadian Prime Loans, September 30, 1998 and the last day of each March, June,
September and December thereafter prior to the Revolving Loan Maturity Date or
the Term Loan Maturity Date, as the case may be, and the Revolving Loan
Maturity Date or the Term Loan Maturity Date, as the case may be; and (b) for
LIBOR Borrowings, the end of the applicable Interest Period (and if such
Interest Period exceeds three months' duration, quarterly, commencing on the
first quarterly anniversary of the first day of such Interest Period) and the
Revolving Loan Maturity Date or the Term Loan Maturity Date, as the case may
be.
Interest Period means, for each LIBOR Borrowing, a period commencing
on the date such LIBOR Borrowing began and ending on the numerically
corresponding day which is, subject to availability as set forth in Section
3.3(c)(iii), 1, 2, 3 or 6 months thereafter, as any Borrower shall elect in
accordance herewith; provided, (1) unless Agents shall otherwise consent, no
Interest Period with respect to a LIBOR Borrowing shall commence on a date
earlier than three (3) Business Days after this Agreement shall have been fully
executed; (2) any Interest Period with respect to a LIBOR Borrowing which would
otherwise end on a day which is not a LIBOR Business Day shall be extended to
the next succeeding LIBOR Business Day, unless such LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day; (3) any Interest Period with respect to a
LIBOR Borrowing which begins on the last LIBOR Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last LIBOR
Business Day of the appropriate calendar month; (4) no Interest Period for a
Revolving Loan shall ever extend beyond the Revolving Loan Maturity Date and no
Interest Period for an Term Loan shall ever extend beyond the Term Loan
Maturity Date, and (5) Interest Periods shall be selected by
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each Borrower in such a manner that the Interest Period with respect to any
portion of the Loans which shall become due shall not extend beyond such due
date.
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by U.S. Borrower for the purpose of reducing U.S.
Borrower's and its Subsidiaries' exposure to interest rate fluctuations and not
for speculative purposes, approved in writing by U.S. Agent (such approval not
to be unreasonably withheld), as it may from time to time be amended, modified,
restated or supplemented.
Interest Rate Risk Indebtedness means all obligations and indebtedness
of U.S. Borrower with respect to the program for the hedging of interest rate
risk provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities
or indebtedness of, or the making of any loan, advance, transfer of Property
(other than transfers in the ordinary course of business) or capital
contribution to, or the incurring of any liability (other than trade accounts
payable arising in the ordinary course of business), contingently or otherwise,
in respect of the indebtedness of, any Person.
Issuer means the issuer (or, where applicable, each issuer) of a
Letter of Credit under this Agreement.
Investment Grade Account Debtors means account debtors which are rated
A- or better by Standard & Poor's Ratings Services and A-3 or better by Xxxxx'x
Investors Service, Inc.
Key Agreements means the Purchase Agreement, the EXIM Facility and any
document or paper evidencing, securing or otherwise relating to any
Subordinated Indebtedness.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Letter of Credit Fee Percentage means (x) with respect to commercial
Letters of Credit, the Margin Percentage from time to time applicable with
respect to LIBOR Borrowings and (y) with respect to standby Letters of Credit
(i) on any day prior to October 1, 1998, 1.75% and (ii) on and after October 1,
1998, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt to Capitalization
Ratio as of the last day of the most recently ended fiscal quarter of U.S.
Borrower calculated by U.S. Agent as soon as practicable after receipt by U.S.
Agent of all financial reports required under this Agreement with respect to
such fiscal quarter (including a Compliance Certificate) (provided, however,
that if the Letter of Credit Fee Percentage is increased as a result of the
reported Debt to Capitalization Ratio, such increase shall be retroactive to
the date that U.S. Borrower was obligated to deliver such financial reports to
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U.S. Agent pursuant to the terms of this Agreement and provided further,
however, that if the Letter of Credit Fee Percentage is decreased as a result
of the reported Debt to Capitalization Ratio, and such financial reports are
delivered to U.S. Agent not more than ten (10) calendar days after the date
required to be delivered pursuant to the terms of this Agreement, such decrease
shall be retroactive to the date that U.S. Borrower was obligated to deliver
such financial reports to U.S. Agent pursuant to the terms of this Agreement):
Debt to Letter of Credit
Capitalization Ratio Fee Percentage
-------------------- ----------------
Greater than or equal to 40% 1.75
Greater than or equal to 30% but
less than 40% 1.50
Greater than or equal to 20% but
less than 30% 1.25
Less than 20% 1.00
Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in
a currency other than Dollars or Canadian Dollars, such amount shall be
converted by Agent to Dollars by any reasonable method, and such converted
amount shall be conclusive and binding, absent manifest error. For purposes of
calculating the aggregate amount of Letter of Credit Liabilities, all amounts
or values expressed in Canadian Dollars shall be converted into Dollars at the
Exchange Rate in effect as of the date of calculation.
Letters of Credit means the U.S. Letters of Credit and the Canadian
Letters of Credit.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the
rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
equal to the average of the offered quotations appearing on Telerate Page 3750
(or if such Telerate Page shall not be available, any successor or similar
service as may be selected by Agents and Borrowers) as of 11:00 a.m., Houston,
Texas time (in respect of a LIBOR Borrowing relating to the U.S. Loans) or
12:00 noon, Toronto, Ontario time (in respect of a LIBOR Borrowing relating to
the Canadian Revolving Loans) (or, in either case, as soon thereafter as
practicable) on the day two LIBOR Business Days prior to the first day of such
Interest Period for deposits in Dollars having a term comparable to such
Interest Period and in an amount comparable to the principal amount of the
LIBOR Borrowing to which such Interest Period relates. If none of such Telerate
Page 3750 nor any successor or similar service is
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available, then "LIBOR" shall mean, with respect to any Interest Period for any
applicable LIBOR Borrowing, the rate of interest per annum, rounded upwards, if
necessary, to the nearest 1/16th of 1%, quoted by U.S. Agent at or before 11:00
a.m., Houston, Texas time (in respect of a LIBOR Borrowing relating to the U.S.
Loans) or 12:00 noon, Toronto, Ontario time (in respect of a LIBOR Borrowing
relating to the Canadian Revolving Loans) (or, in either case, as soon
thereafter as practicable), on the date two LIBOR Business Days before the
first day of such Interest Period, to be the arithmetic average of the
prevailing rates per annum at the time of determination and in accordance with
the then existing practice in the applicable market, for the offering to U.S.
Agent or Canadian Agent, as the case may be, by one or more prime banks
selected by such Agent in its sole discretion, in the London interbank market,
of deposits in Dollars for delivery on the first day of such Interest Period
and having a maturity equal (or as nearly equal as may be) to the length of
such Interest Period and in an amount equal (or as nearly equal as may be) to
the LIBOR Borrowing to which such Interest Period relates. Each determination
by any Agent of LIBOR shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in
Dollar deposits between lenders may be carried on in the London interbank
market.
Lien means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of
way, covenants, conditions, restrictions and other title exceptions.
Loans means the U.S. Revolving Loans, the Canadian Revolving Loans and
the Term Loans provided for by Section 2.1 hereof.
Loan Documents means, collectively, this Agreement, the Notes, the
Bankers' Acceptances, the Bankers' Acceptance Notices, the Guaranties, the
Contribution Agreements, all Applications, the Security Documents, the Notice
of Entire Agreement, all instruments, certificates and agreements now or
hereafter executed or delivered by any Obligor to any Agent or any Lender
pursuant to any of the foregoing or in connection with the Obligations or any
commitment regarding the Obligations, and all amendments, modifications,
renewals, extensions, increases and rearrangements of, and substitutions for,
any of the foregoing.
Majority Lenders means, at any time while no Obligations are
outstanding, Lenders having greater than 66-2/3% of the aggregate amount of
U.S. Commitments and the Canadian Commitments, and at any time while
Obligations are outstanding, Lenders having greater than 66-2/3% of the sum of
outstanding Term Loans plus U.S. Commitments plus Canadian Commitments;
provided that if all U.S. Commitments and Canadian Commitments have terminated,
the Majority
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Lenders shall be Lenders having greater than 66-2/3% of the aggregate amount of
all Obligations outstanding.
Margin Percentage means (i) on any day prior to October 1, 1998, 1.00%
per annum with respect to Base Rate Borrowings and Canadian Prime Loans and
2.50% per annum with respect to LIBOR Borrowings and (ii) on and after October
1, 1998, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt to Capitalization
Ratio as of the last day of the then most recently ended fiscal quarter of U.S.
Borrower calculated by U.S. Agent as soon as practicable after receipt by U.S.
Agent of all financial reports required under this Agreement with respect to
such fiscal quarter (including a Compliance Certificate) (provided, however,
that if the Margin Percentage is increased as a result of the reported Debt to
Capitalization Ratio, such increase shall be retroactive to the date that U.S.
Borrower was obligated to deliver such financial reports to U.S. Agent pursuant
to the terms of this Agreement and provided further, however, that if the
Margin Percentage is decreased as a result of the reported Debt to
Capitalization Ratio, and such financial reports are delivered to U.S. Agent
not more than ten (10) calendar days after the date required to be delivered
pursuant to the terms of this Agreement, such decrease shall be retroactive to
the date that U.S. Borrower was obligated to deliver such financial reports to
U.S. Agent pursuant to the terms of this Agreement):
Canadian Prime Loans/
Debt to LIBOR Borrowings Base Rate Borrowings
Capitalization Ratio Margin Percentage Margin Percentage
-------------------- ----------------- -----------------
Greater than or equal to 50% 2.50 1.00
Greater than or equal to 40% but
less than 50% 2.00 0.50
Greater than or equal to 30% but
less than 40% 1.50 0.0
Greater than or equal to 20% but
less than 30% 1.25 0.0
Less than 20% 1.00 0.0
Material Adverse Effect means any material and adverse effect on the
ability of an Obligor to perform its obligations under any Loan Document to
which it is a party or on the business, condition (financial or otherwise),
results of operations, assets, liabilities or prospects of (i) U.S. Borrower
and its Subsidiaries on a consolidated basis, or (ii) Group.
Maximum Canadian Available Amount means, at any date, an amount equal
to the lesser of (i) $10,000,000 or (ii) the then effective Canadian Borrowing
Base. In connection with the
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application of any provision hereof using the term "Maximum Canadian Available
Amount", any amounts denominated in Canadian Dollars shall be converted to
Dollars using the then current Exchange Rate. The Maximum Canadian Available
Amount is subject to change pursuant to Section 2.4(c) hereof.
Maximum U.S. Available Amount means, at any date, an amount equal to
the lesser of (i) $22,000,000 or (ii) the then effective U.S. Borrowing Base.
The Maximum U.S. Available Amount is subject to change pursuant to Section
2.4(c) hereof.
Net Equity Proceeds means, for any period, (i) the net proceeds
realized from the issuance of any equity securities by U.S. Borrower during
such period minus (ii) the aggregate amount of any dividends paid by U.S.
Borrower pursuant to clause (iii)(3) of the definition of "Permitted Dividends"
during such period.
Net Worth means, with respect to U.S. Borrower and its Subsidiaries,
the sum of preferred stock (if any), par value of common stock, capital in
excess of par value of common stock, retained earnings and Subordinated
Indebtedness.
Notes shall have the meaning assigned to such term in Section 2.7
hereof.
Notice of Entire Agreement means a notice of entire agreement, in
Proper Form, executed by Borrowers, each other Obligor and Agents, as the same
may from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of
the following: (i) the aggregate principal amount of Loans outstanding
hereunder on such date, plus (ii) the aggregate amount of the outstanding
Letter of Credit Liabilities on such date, plus (iii) the aggregate amount of
outstanding Bankers' Acceptance Liabilities on such date, plus (iv) all other
outstanding liabilities, obligations and indebtedness of any Obligor under any
Loan Document on such date. For purposes of calculating the aggregate amount of
Obligations, all amounts or values expressed in Canadian Dollars shall be
converted into Dollars at the Exchange Rate in effect as of the date of
determination.
Obligors means each Borrower, Group and each Person now or hereafter
executing a Guaranty and/or a Security Agreement.
Organizational Documents means, with respect to a United States
corporation, the certificate of incorporation, articles of incorporation and
bylaws of such corporation; with respect to a partnership, the partnership
agreement establishing such partnership; with respect to a trust, the
instrument establishing such trust and with respect to any other Person, the
agreements or instruments pursuant to which such Person was formed and by which
such Person is governed; in each case including any and all modifications
thereof as of the date of the Loan Document referring to such Organizational
Document and any and all future modifications thereof.
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Past Due Rate means, on any day, a rate per annum equal to the lesser
of (i) the Ceiling Rate for that day or (ii) the applicable Base Rate or
Canadian Prime Rate, as the case may be, plus the Margin Percentage for Base
Rate Borrowings then in effect plus three percent (3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA and any pension
commission or similar body or fund constituted under any Applicable Canadian
Pension Legislation.
Permitted Dividends means (i) dividends or distributions by a
Subsidiary of U.S. Borrower to U.S. Borrower or any other Subsidiary (other
than a Foreign Subsidiary) of U.S. Borrower and dividends or distributions by
any Foreign Subsidiary of U.S. Borrower to any other Foreign Subsidiary of U.S.
Borrower, (ii) stock dividends, (iii) so long as no Default or Event of Default
shall have occurred and be continuing (or would result therefrom), (1)
dividends paid by U.S. Borrower to its shareholders, to be applied to corporate
expenses of Group and Group's cash portion of retiree medical expenses, in
aggregate amounts not to exceed $1,500,000 for the fiscal year ending December
31, 1998, $2,000,000 for the fiscal year 1999, and $2,200,000 for the fiscal
year 2000 and each fiscal year thereafter, (2) dividends paid by U.S. Borrower
to its shareholders, to be applied to that portion of the purchase price
payable in connection with the Puts, provided that dividends paid under this
clause 2 shall not exceed (x) $9,500,000 in the aggregate from and after June
30, 2000 through and including December 31, 2000 or (y) $8,500,000 in the
aggregate from and after January 1, 2001 through and including December 31,
2001, (3) dividends paid by U.S. Borrower to its shareholders, to be applied to
the purchase price payable in connection with the Puts, in an aggregate amount
not to exceed the lesser of (x) aggregate purchase costs payable in connection
with the Puts and (y) Net Equity Proceeds received by U.S. Borrower after the
Effective Date, (4) dividends paid by U.S. Borrower to its shareholders, to be
applied to the purchase of shares of Group pursuant to the Xxxxxxx Option, so
long as the Xxxxxxx Option shall have been assigned by U.S. Borrower to its
shareholders and the proceeds paid in connection with such purchase are
concurrently applied to the payment of the Xxxxxxx Note Receivable, and (5) so
long as the payment required under Section 3.2(b)(2) hereof for such fiscal
year (based on Excess Cash Flow for the preceding fiscal year) shall have been
paid, dividends paid by U.S. Borrower to its shareholders for the fiscal year
2001 and in each fiscal year thereafter in an aggregate amount not to exceed
fifty percent (50%) of Excess Cash Flow for the preceding fiscal year.
Dividends permitted under any of clauses (iii)(1), (2). (3), (4) and (5) above
are each cumulative of dividends permitted under any other of such clauses.
Permitted Investments means: (a) readily marketable securities issued
or fully guaranteed by the full faith and credit of the United States of
America or of Canada with maturities of not more than one year; (b) commercial
paper rated "Prime 1" by Xxxxx'x Investors Service, Inc. or "A-1" by Standard
and Poor's Ratings Services or the equivalent thereof by Dominion Bond Rating
Service Limited with maturities of not more than 180 days; (c) certificates of
deposit or repurchase obligations issued by any U.S. or Canadian domestic bank
having capital surplus of at least $100,000,000 or by any other financial
institution acceptable to Agents, all of the foregoing not having a maturity of
more than one year from the date of issuance thereof, and (d) the purchase of
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shares of Group pursuant to the Xxxxxxx Option so long as the proceeds paid in
connection with such purchase are concurrently applied to the payment of the
Xxxxxxx Note Receivable.
Permitted Liens means each of the following: (a) artisans' or
mechanics' Liens arising in the ordinary course of business, and Liens for
taxes, but only to the extent that payment thereof shall not at the time be due
or if due, the payment thereof is being diligently contested in good faith and
adequate reserves computed in accordance with GAAP have been set aside
therefor; (b) Liens in effect on the Effective Date and disclosed to the
Lenders in the financial statements delivered on or prior to the Effective Date
pursuant to Section 6.2 hereof or in a schedule hereto; (c) normal
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions and encumbrances which do not secure Borrowed Money
Indebtedness and which do not have a material adverse effect on the value or
utility of the applicable Property; (d) Liens in favor of any Agent or any
Lender under the Loan Documents, including without limitation, Liens securing
Interest Rate Risk Indebtedness or Currency Exchange Risk Indebtedness owed to
one or more of the U.S. Lenders (but not to any Person which is not, at such
time, a U.S. Lender); (e) Liens incurred or deposits made in the ordinary
course of business (1) in connection with workmen's compensation, unemployment
insurance, social security and other like laws, or (2) to secure insurance in
the ordinary course of business, the performance of bids, tenders, contracts,
leases, licenses, statutory obligations, surety, appeal and performance bonds
and other similar obligations incurred in the ordinary course of business, not,
in any of the cases specified in this clause (2), incurred in connection with
the borrowing of money, the obtaining of advances or the payment of the
deferred purchase price of Property; (f) attachments, judgments and other
similar Liens arising in connection with court proceedings, provided that the
execution and enforcement of such Liens are effectively stayed and the claims
secured thereby are being actively contested in good faith with adequate
reserves made therefor in accordance with GAAP; (g) Liens imposed by law, such
as landlords', carriers', warehousemen's, mechanics', materialmen's and
vendors' liens, incurred in good faith in the ordinary course of business and
securing obligations which are not yet due or which are being contested in good
faith by appropriate proceedings if adequate reserves with respect thereto are
maintained in accordance with GAAP; (h) zoning restrictions, easements,
licenses, reservations, provisions, covenants, conditions, waivers, and
restrictions on the use of Property, and which do not in any case singly or in
the aggregate materially impair the present value or utility of the applicable
Property; (i) Liens securing purchase money Indebtedness permitted under
Section 8.1 hereof and covering the Property so purchased; (j) capital leases
and sale/leaseback transactions permitted under the other provisions of this
Agreement, and (k) extensions, renewals and replacements of Liens referred to
in clauses (a) through (j) of this definition; provided that any such
extension, renewal or replacement Lien shall be limited to the Property or
assets covered by the Lien extended, renewed or replaced and that the Borrowed
Money Indebtedness secured by any such extension, renewal or replacement Lien
shall be in an amount not greater than the amount of the Indebtedness secured
by the Lien extended, renewed or replaced.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
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Plan means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code or any Applicable Canadian Pension Legislation and is either (a)
maintained by, or contributed to by, any Borrower or any member of the
Controlled Group for employees of any Borrower or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which any Borrower or any member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
Prime Rate means, on any day, (a) as to Loans made to U.S. Borrower,
the prime rate for that day as determined from time to time by Chase Texas and
(b) as to Loans denominated in Dollars made to Canadian Borrower, the base rate
for that day for Loans denominated in Dollars quoted by BNS. The Prime Rate is,
in each case, a reference rate and does not necessarily represent the lowest or
best rate or a favored rate, and Chase Texas, BNS, each Agent and each Lender
disclaims any statement, representation or warranty to the contrary. Chase
Texas, BNS, any Agent or any Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
Principal Office means (a) as to Obligations of U.S. Borrower, the
principal office of U.S. Agent, presently located at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxx 00000 and (b) as to Obligations of Canadian Borrower, the
principal office of Canadian Agent, presently located at Calgary Commercial
Xxxxxxx Xxxxxx, 000-0 Xxx. X.X., Xxxxxxx, Xxxxxxx X0X 0X0.
Pro Forma EBITDA means, for any period for which the amount thereof is
to be determined, EBITDA of U.S. Borrower and its Subsidiaries plus (or minus),
without duplication, on a pro forma basis for such period, EBITDA of any Person
becoming a Subsidiary of U.S. Borrower during such period (calculated as if
such Person had been a Subsidiary of U.S. Borrower for all of such period) and
with respect to which Agent and Lenders have been provided with Annual
Financial Statements for the most recently ended fiscal year of such Person
(provided, however, that unaudited annual financial statements for any
applicable Person for the most recently ended fiscal year of such Person shall
be acceptable so long as (i) such financial statements otherwise conform to the
definition of "Annual Financial Statements", (ii) such financial statements are
certified by the chief financial officer or other authorized officer of such
Person as fairly presenting, in all material respects, the financial position
of such person as of the applicable date or dates, and (iii) unaudited
Consolidated EBITDA does not comprise more than 20% of Pro Forma EBITDA).
Borrower shall furnish to Agent supporting calculations for Pro Forma EBITDA
and such other information as Agent may reasonably request to determine the
accuracy of such calculation.
Proper Form means in form and substance reasonably satisfactory to
Agents.
Property means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
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Purchase Agreement means that certain Amended and Restated Agreement
and Plan of Merger dated as of March 26, 1998 executed by and among Group, U.S.
Borrower and The Cynara Company, a Delaware corporation, as the same may from
time to time be amended, modified, restated or supplemented.
Puts shall have the meaning ascribed to such term in the Purchase
Agreement.
Qualified Institution means (a) any bank or trust company which is
organized under the laws of any country which is a member of the Organization
for Economic Cooperation and Development or any political subdivision of any
such country; and having capital, surplus and undivided profits aggregating at
least $100,000,000.00 (or its equivalent in another currency) as of the date of
such Person's most recent financial reports, and (b) any other Person approved
in writing by Agents.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial
statements of a Person, which statements shall include a balance sheet as of
the end of the applicable fiscal quarter and an income statement and a
statement of cash flows for such fiscal quarter and for the fiscal year to
date, subject to normal year-end adjustments, all setting forth in comparative
form the corresponding figures as of the end of and for the corresponding
fiscal quarter of the preceding year, prepared in accordance with GAAP in all
material respects except that such statements are condensed and exclude
detailed footnote disclosures and certified by the chief financial officer or
other authorized officer of such Person as fairly presenting, in all material
respects, the financial condition of such person as of such date. As to
Borrowers only, Quarterly Financial Statements shall also include unaudited
consolidating financial statements for the applicable Borrower and unaudited
consolidated financial statements for the applicable Borrower and its
Subsidiaries, each in Proper Form, certified in each case by the chief
financial officer or other authorized officer of the applicable Borrower as
presenting fairly in all material respects the consolidating or consolidated,
as the case may be, financial position of the applicable Person. Quarterly
Financial Statements for Canadian Borrower may be adjusted to conform with
generally accepted Canadian accounting principles, consistently applied.
Rate Designation Date means that Business Day which is (a) in the case
of Base Rate Borrowings by the U.S. Borrower, 11:00 a.m., Houston, Texas time,
and, in the case of Base Rate Borrowings by the Canadian Borrower, 12:00 noon,
Toronto, Ontario time, in each case on the date one Business Day preceding the
date of such borrowing and (b) in the case of LIBOR Borrowings by the U.S.
Borrower, 11:00 a.m., Houston, Texas time, and, in the case of LIBOR Borrowings
by the Canadian Borrower, 12:00 noon, Toronto, Ontario time, in each case, on
the date three LIBOR Business Days preceding the first day of any proposed
Interest Period.
Rate Designation Notice means a written notice substantially in the
form of Exhibit B.
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Refunding Bankers' Acceptance has the meaning specified in Section
2.3(b).
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor
or other regulation relating to reserve requirements applicable to member banks
of the Federal Reserve System.
Regulatory Change means with respect to any Lender, any change on or
after the Effective Date in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of
any interpretation, directive or request applying to a class of lenders
including such Lender under any Legal Requirements (whether or not having the
force of law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, (i) the obligations
of any Borrower then outstanding, or which may thereafter arise, in respect of
Letters of Credit under this Agreement, to reimburse the applicable Issuers for
the amount paid by such Issuers in respect of any drawing under such Letters of
Credit and (ii) the obligations of the Canadian Borrower then outstanding, or
which may thereafter arise, in respect of any Bankers' Acceptance purchased by
any Canadian Lender or paid by it on maturity thereof. Except for Canadian
Letters of Credit denominated in Canadian Dollars, Reimbursement Obligations in
respect of any Letter of Credit shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other
than Dollars.
Request for Extension of Credit means a request for extension of
credit duly executed by any responsible officer, which may include the
president, chief executive officer, the chief financial officer, any vice
president or the treasurer of U.S. Borrower or Canadian Borrower, as the case
may be, or any other Person duly authorized by one of such officers,
appropriately completed and substantially in the form of Exhibit A-1 (U.S.
Borrower) or Exhibit A-2 (Canadian Borrower) attached hereto, as the case may
be.
Requirements of Environmental Law means all requirements imposed by
any law (including for example and without limitation The Resource Conservation
and Recovery Act and The Comprehensive Environmental Response, Compensation,
and Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, discharge or storage of Hazardous
Substances.
Reset Date has the meaning specified in Section 2.9(a).
Revolving Loan Maturity Date means the maturity of the Revolving Notes
and the other U.S. Revolving Loan Obligations and Canadian Obligations,
November 30, 2001.
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Revolving Loans means the U.S. Revolving Loans, the Canadian Dollar
Notes and the Canadian Revolving Loans.
Revolving Notes means the U.S. Revolving Notes and the Canadian
Revolving Notes.
Secretary's Certificate means a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation (a) that attached thereto
are true and correct copies of resolutions of the Board of Directors of such
corporation authorizing the execution, delivery and performance of the Loan
Documents to be executed by such corporation; (b) the incumbency and signature
of the officer of such corporation executing such Loan Documents on behalf of
such corporation, and (c) that attached thereto are true and correct copies of
the Organizational Documents of such corporation.
Security Agreements means (i) security agreements, each in Proper
Form, executed or to be executed in favor of U.S. Agent, securing the U.S.
Obligations, covering all of the real Property (other than real Property owned
as of the Effective Date) upon which a Lien must be granted pursuant to Section
7.11 hereof and material personal Property (other than the equity interests
described in clauses (ii) and (iv) of this definition) of U.S. Borrower and its
Subsidiaries (other than Foreign Subsidiaries), (ii) security agreements, each
in Proper Form, executed or to be executed in favor of U.S. Agent, securing the
U.S. Obligations, covering all of the issued and outstanding equity interests
in any Subsidiary of U.S. Borrower (other than Foreign Subsidiaries and other
than Subsidiaries which are wholly-owned direct Subsidiaries of Foreign
Subsidiaries) and 65% of the issued and outstanding equity interests in any
Foreign Subsidiary of U.S. Borrower (other than Foreign Subsidiaries which are
direct Subsidiaries of other Foreign Subsidiaries), (iii) security agreements,
each in Proper Form, executed or to be executed in favor of Canadian Agent,
securing the Canadian Obligations, covering all of the real Property (other
than real Property owned as of the Effective Date) upon which a Lien must be
granted pursuant to Section 7.11 hereof and material personal Property of
Canadian Borrower and each Canadian Subsidiary and (iv) security agreements,
each in Proper Form, executed in favor of Canadian Agent, securing the Canadian
Obligations, covering the remaining 35% of the issued and outstanding equity
interests in any Foreign Subsidiary of U.S. Borrower, as the same may from time
to time be amended, modified, restated or supplemented.
Security Documents means, collectively, the Security Agreements, the
Financing Statements and any and all other security documents now or hereafter
executed and delivered by any Obligor to secure all or any part of the
Obligations, as any of them may from time to time be amended, modified,
restated or supplemented.
Stated Rate means, with respect to any Lender, the effective weighted
per annum rate of interest applicable to the Loans made by such Lender;
provided, that if on any day such rate shall exceed the Ceiling Rate for that
day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each
day thereafter until the total amount of interest accrued at the Stated Rate on
the unpaid principal balances of the Notes plus the Additional Interest equals
the total amount of interest which would have accrued if there had been no
Ceiling Rate. If the Notes mature (or are prepaid) before
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such equality is achieved, then, in addition to the unpaid principal and
accrued interest then owing pursuant to the other provisions of the Loan
Documents, the applicable Borrower promises to pay on demand to the order of
the holder of the applicable Note interest in an amount equal to the excess (if
any) of (a) the lesser of (i) the total interest which would have accrued on
such Note if the Stated Rate had been defined as equal to the Ceiling Rate from
time to time in effect and (ii) the total interest which would have accrued on
such Note if the Stated Rate were not so prohibited from exceeding the Ceiling
Rate, over (b) the total interest actually accrued on such Note to such
maturity (or prepayment) date. Without notice to any Borrower or any other
Person, the Stated Rate shall automatically fluctuate upward and downward in
accordance with the provisions of this definition.
Subordinated Indebtedness means all Indebtedness of U.S. Borrower and
its Subsidiaries which has been subordinated on terms and conditions
satisfactory to the Majority Lenders, in their sole discretion, to the
Obligations, whether now existing or hereafter incurred. Indebtedness shall not
be considered as "Subordinated Indebtedness" unless and until Agents shall have
received copies of the documentation evidencing or relating to such
Indebtedness, including subordination provisions, in Proper Form, duly executed
by the holder or holders of such Indebtedness and evidencing the terms and
conditions of subordination required by the Majority Lenders.
Subsidiary means, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity rights (whether
outstanding capital stock or otherwise) is at the time directly or indirectly
owned by, such parent Corporation.
Taxes shall have the meaning ascribed to it in Section 4.1(d) hereof.
Termination Date means the earlier of (a) the Revolving Loan Maturity
Date or (b) the date specified by either Agent in accordance with Section 9.1
hereof.
Term Loan means a Loan made pursuant to Section 2.1(d) hereof.
Term Loan Lender means each U.S. Lender with any outstanding Term
Loans.
Term Loan Maturity Date means November 30, 2003.
Term Loan Obligations means, as at any date of determination thereof,
the aggregate principal amount of Term Loans outstanding hereunder on such
date.
Term Notes means the Notes of U.S. Borrower evidencing the Term Loans,
in substantially the form of Exhibit J hereto.
Total Canadian Exposure means, at any time and without duplication,
the sum of the aggregate principal amounts of the then outstanding Canadian
Revolving Loans, then outstanding Bankers' Acceptance Liabilities and then
outstanding Letter of Credit Liabilities in respect of
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33
Canadian Letters of Credit, in each case expressed in Dollars using, where
applicable, the then current Exchange Rate.
Total Capitalization means the sum of, without duplication, the
Borrowed Money Indebtedness of U.S. Borrower and its Subsidiaries, on a
consolidated basis, and preferred stock and the consolidated stockholders'
equity (including paid-in capital and retained earnings) of U.S.
Borrower and its Subsidiaries, determined in accordance with GAAP.
Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent actuarial valuation report
for such Plan, but only to the extent that such excess represents a potential
liability of any member of the Controlled Group to the PBGC or a Plan under
Title IV of ERISA and, with respect to any Plan governed by Applicable Canadian
Pension Legislation, the amount (if any) by which the solvency liabilities
under such Plan (determined in accordance with actuarial assumptions contained
in the most recent actuarial valuation report for such Plan) exceed the fair
market value of the assets of such Plan. With respect to multi-employer Plans,
the term "Unfunded Liabilities" shall also include contingent liability for
withdrawal liability under Section 4201 of ERISA or under Applicable Canadian
Pension Legislation to all multi-employer Plans to which any Borrower or any
member of a Controlled Group for employees of any Borrower contributes in the
event of complete withdrawal from such plans.
UPRC Receivables means receivables owing to U.S. Borrower by Union
Pacific Resources Corporation in an aggregate amount not exceeding $6,000,000
which are payable on or before January 31, 1999.
U.S. Borrowing Base means, as at any date, the amount of the U.S.
Borrowing Base shown on the Borrowing Base Certificate then most recently
delivered pursuant to Section 7.2(b) hereof, determined by calculating the
amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts of U.S.
Borrower and its Subsidiaries (other than Canadian
Subsidiaries) at said date, plus
(ii) the sum of (x) 20% of that portion of Eligible Inventory of
U.S. Borrower and its Subsidiaries (other than Canadian
Subsidiaries) at said date (determined at the lower of cost
or market on a consistent basis) which consists of used
finished goods, (y) 25% of that portion of Eligible Inventory
of U.S. Borrower and its Subsidiaries (other than Canadian
Subsidiaries) at said date (determined at the lower of cost
or market on a consistent basis) which consists of
work-in-process relating to projects for customers that are
not account debtors with respect to any Accounts owing to
U.S. Borrower and its Subsidiaries (other than Canadian
Subsidiaries) which are not Eligible Accounts and (z) 50% of
the aggregate amount of all other Eligible Inventory
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of U.S. Borrower and its Subsidiaries (other than Canadian
Subsidiaries) at said date (determined at the lower of cost
or market on a consistent basis); provided that the amount
calculated pursuant to this clause (ii) shall not exceed 50%
of the U.S. Borrowing Base.
In the absence of a current Borrowing Base Certificate, U.S. Agent shall
determine the U.S. Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the U.S. Borrowing Base from time to time so determined shall be the Borrowing
Base for all purposes of this Agreement until a current Borrowing Base
Certificate, in Proper Form, is furnished to and accepted by U.S. Agent.
U.S. Commitment means, as to any U.S. Lender, the obligation, if any,
of such U.S. Lender to make U.S. Revolving Loans and incur or participate in
Letter of Credit Liabilities relating to U.S. Letters of Credit in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the
amount, if any, set forth opposite such U.S. Lender's name on the signature
pages hereof under the caption "U.S. Commitment", or otherwise provided for in
an Assignment and Acceptance Agreement (as the same may be increased or reduced
from time to time pursuant to Section 2.4 hereof).
U.S. Lender means each lender party hereto with any U.S. Commitment or
any outstanding U.S. Obligations.
U.S. Letters of Credit shall have the meaning assigned to such term in
Section 2.2 hereof.
U.S. Loan means a U.S. Revolving Loan or a Term Loan.
U.S. Obligations means U.S. Revolving Loan Obligations and Term Loan
Obligations.
U.S. Revolving Loan means a Loan made pursuant to Section 2.1(a)
hereof.
U.S. Revolving Loan Obligations means, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of U.S. Revolving Loans outstanding hereunder on
such date plus (ii) the aggregate amount of the Letter of Credit Liabilities
outstanding on such date relating to U.S. Letters of Credit.
U.S. Revolving Notes means the Notes of U.S. Borrower evidencing the
U.S. Revolving Loans, in the form of Exhibit D hereto.
Xxxxxxx Note Receivable means the note receivable evidenced by that
certain $1,585,164 unsecured promissory note issued as of March 31, 1998 by
Xxxxxxx X. Xxxxxxx, Xx. payable to the order of U.S. Borrower.
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Xxxxxxx Option means that certain Option Agreement dated as of March
31, 1998 executed by and between Xxxxxxx X. Xxxxxxx, Xx. (as optionor) and U.S.
Borrower (as optionee).
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement.
2. Commitments; Loans; BA's and Letters of Credit.
2.1 Loans and BA's. Each Lender severally agrees, subject to all of
the terms and conditions of this Agreement (including, without limitation,
Sections 5.1 and 5.2 hereof), to make Loans and, in the case of Canadian
Lenders, to accept and purchase Bankers' Acceptances, as follows:
(a) U.S. Revolving Loans. From time to time on or after the Effective
Date and during the Availability Period, each U.S. Lender shall make loans
under this Section 2.1(a) to U.S. Borrower in an aggregate principal amount at
any one time outstanding (including its Commitment Percentage of all Letter of
Credit Liabilities relating to U.S. Letters of Credit at such time) up to but
not exceeding such U.S. Lender's Commitment Percentage of the Maximum U.S.
Available Amount. Subject to the conditions in this Agreement, any such U.S.
Revolving Loan repaid prior to the Termination Date may be reborrowed pursuant
to the terms of this Agreement; provided, that any and all such U.S. Revolving
Loans shall be due and payable in full on the Termination Date. Loans made
under this Section 2.1(a) shall be made and denominated in Dollars. The
aggregate of all U.S. Revolving Loans to be made by the U.S. Lenders in
connection with a particular borrowing shall be equal to the lesser of (i) the
unutilized portion of the U.S. Commitments or (ii) $500,000 or any integral
multiple of $100,000 in excess thereof.
(b) Canadian Revolving Loans. From time to time on or after the
Effective Date and during the Availability Period, each Canadian Lender shall
make loans under this Section 2.1(b) to Canadian Borrower in an aggregate
principal amount at any one time outstanding (including such Canadian Lender's
Commitment Percentage of all Bankers' Acceptance Liabilities and all Letter of
Credit Liabilities relating to Canadian Letters of Credit at such time) up to
but not exceeding such Canadian Lender's Commitment Percentage of the Maximum
Canadian Available Amount. Subject to the conditions in this Agreement, any
such Canadian Revolving Loan repaid prior to the Termination Date may be
reborrowed pursuant to the terms of this Agreement; provided, that any and all
such Canadian Revolving Loans shall be due and payable in full on the
Termination Date. Loans made under this Section 2.1(b) may, at the option of
Canadian Borrower, be made and denominated either in Dollars or in Canadian
Dollars (but all Loans to be made under a particular borrowing must be made and
denominated in the same currency). The aggregate of all Canadian Revolving
Loans to be made by the Canadian Lenders in connection with a particular
borrowing shall be equal to the lesser of (i) the unutilized portion of the
Canadian Commitments or (ii) $500,000 or any integral multiple of $100,000 in
excess thereof (if the Loans are denominated in
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Dollars) or C$500,000 or any integral multiple of C$100,000 in excess thereof
(if the Loans are denominated in Canadian Dollars).
(c) Bankers' Acceptances. From time to time on or after the Effective
Date and during the Availability Period, each Canadian Lender shall accept and
purchase Bankers' Acceptances drawn on it under Section 2.3 hereof by Canadian
Borrower in an aggregate principal amount at any one time outstanding
(including such Canadian Lender's Commitment Percentage of all Canadian
Revolving Loans outstanding at such time and all Letter of Credit Liabilities
relating to Canadian Letters of Credit at such time) up to but not exceeding
such Canadian Lender's Commitment Percentage of the Maximum Canadian Available
Amount. No Bankers' Acceptance may be made or accepted on or after the
Termination Date and all outstanding Bankers' Acceptances shall mature no later
than the end of the Availability Period. Loans made by way of Bankers'
Acceptances shall be made and denominated in Canadian Dollars.
(d) Term Loans. On the Effective Date, each Term Loan Lender shall
make a loan to U.S. Borrower in the amount set forth opposite such Term Loan
Lender's name on the signature pages hereof under the caption "Term Loans".
(e) Chapter 346 Not Applicable. Borrowers, Agents and the Lenders
agree pursuant to Chapter 346 ("Chapter 346") of the Texas Finance Code, that
Chapter 346 (which relates to open-end line of credit revolving loan accounts)
shall not apply to this Agreement, the Notes or any Obligation and that neither
the Notes nor any Obligation shall be governed by Chapter 346 or subject to its
provisions in any manner whatsoever.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
relating to U.S. Letters of Credit shall never exceed $15,000,000 and that
aggregate Letter of Credit Liabilities relating to Canadian Letters of Credit
shall never exceed $5,000,000, (i) U.S. Borrower shall have the right, in
addition to U.S. Revolving Loans provided for in Section 2.1(a) hereof, to
utilize the U.S. Commitments from time to time during the Availability Period
by obtaining the issuance of letters of credit for the account of U.S. Borrower
if U.S. Borrower shall so request in the notice referred to in Section
2.2(b)(i) hereof (such letters of credit as any of them may be amended,
supplemented, extended or confirmed from time to time, being herein
collectively called the "U.S. Letters of Credit") and Canadian Borrower shall
have the right, in addition to Canadian Revolving Loans provided for in Section
2.1(b) hereof and Bankers' Acceptances provided for in Section 2.1(c) hereof,
to utilize the Canadian Commitments from time to time during the Availability
Period by obtaining the issuance of letters of credit for the account of
Canadian Borrower if Canadian Borrower shall so request in the notice referred
to in Section 2.2(b)(i) hereof (such letters of credit as any of them may be
amended, supplemented, extended or confirmed from time to time, being herein
collectively called the "Canadian Letters of Credit") and (ii) Chase Texas
agrees to issue U.S. Letters of Credit and BNS agrees to issue Canadian Letters
of Credit. The Letters of Credit will, at the request of the applicable
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Borrower, be issued in currencies other than those expressly provided for in
this Agreement so long as the applicable Agent is reasonably satisfied that
such currency is readily available in the required amounts and that such
currency selection is not otherwise disadvantageous to any Agent or any Lender.
Upon the date of the issuance of a Letter of Credit, the applicable Issuer
shall be deemed, without further action by any party hereto, to have sold to
each U.S. Lender or Canadian Lender, as the case may be, and each such U.S.
Lender or Canadian Lender, as the case may be, shall be deemed, without further
action by any party hereto, to have purchased from the applicable Issuer, a par
ticipation, to the extent of such Lender's Commitment Percentage, in such
Letter of Credit and the related Letter of Credit Liabilities, which
participation shall terminate on the earlier of the expiration date of such
Letter of Credit or the Termination Date. Any Letter of Credit that shall have
an expiration date after the end of the Availability Period shall be subject to
Cover or backed by a letter of credit in form and substance, and issued by a
Person, acceptable to the applicable Agent in its sole discretion. Chase Texas
or, with the prior approval of U.S. Borrower, U.S. Agent and the applicable
U.S. Lender, another U.S. Lender shall be the Issuer of each U.S. Letter of
Credit; and BNS or, with the prior approval of Canadian Borrower, Canadian
Agent and the applicable Canadian Lender, another Canadian Lender shall be the
Issuer of each Canadian Letter of Credit. Except as provided above, all U.S.
Letters of Credit shall be denominated in Dollars and all Canadian Letters of
Credit shall, at the option of Canadian Borrower, be denominated in either
Dollars or Canadian Dollars. Fees due in respect of a U.S. Letter of Credit
shall be payable in Dollars and fees due in respect of a Canadian Letter of
Credit shall be payable (i) in Dollars, if such Letter of Credit is denominated
in Dollars and (ii) in Canadian Dollars if such Letter of Credit is denominated
in Canadian Dollars or any other currency. Letters of credit previously issued
under the provisions of the Loan Agreement dated June 30, 1997 described in
Section 11.19 hereof shall constitute "Letters of Credit" hereunder.
(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) U.S. Borrower or Canadian Borrower, as the case may be,
shall give the appropriate Agent notice requesting each issuance of a
Letter of Credit hereunder as provided in Section 4.3 hereof and shall
furnish such additional information regarding such transaction as such
Agent may reasonably request. Upon receipt of such notice, such Agent
shall promptly notify each U.S. Lender or Canadian Lender, as the case
may be, of the contents thereof and of such Lender's Commitment
Percentage of the amount of such proposed Letter of Credit.
(ii) No U.S. Letter of Credit may be issued if after giving
effect thereto the sum of (A) the aggregate outstanding principal
amount of U.S. Revolving Loans plus (B) the aggregate Letter of Credit
Liabilities relating to U.S. Letters of Credit would exceed the
Maximum U.S. Available Amount. No Canadian Letter of Credit may be
issued if after giving effect thereto the sum of (A) the aggregate
outstanding principal amount of Canadian Revolving Loans plus (B) the
aggregate Letter of Credit Liabilities relating to Canadian Letters of
Credit plus (C) the aggregate Bankers' Acceptance Liabilities would
exceed the
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Maximum Canadian Available Amount. On each day during the period
commencing with the issuance of any Letter of Credit and until such
Letter of Credit shall have expired or been terminated, the U. S.
Commitment or Canadian Commitment, as the case may be, of each
applicable Lender shall be deemed to be utilized for all purposes
hereof, including Section 2.5(a), in an amount equal to such Lender's
Commitment Percentage of the amount then available for drawings under
such Letter of Credit (or any unreimbursed drawings under such Letter
of Credit).
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, the applicable Issuer
shall notify the Agents and thereafter the U.S. Agent or the Canadian
Agent, as the case may be, shall promptly notify the applicable
Borrower and each applicable Lender as to the amount to be paid as a
result of such demand and the payment date therefor. If at any time
prior to the earlier of the expiration date of a Letter of Credit or
the Termination Date any applicable Issuer shall have made a payment
to a beneficiary of a Letter of Credit in respect of a drawing under
such Letter of Credit, each applicable Lender will pay to the U.S.
Agent or the Canadian Agent, as the case may be, immediately upon
demand by such Issuer at any time during the period commencing after
such payment until reimbursement thereof in full by the applicable
Borrower, an amount equal to such Lender's U.S. Commitment Percentage
or Canadian Commitment Percentage, as the case may be, of such
payment, together with interest on such amount for each day from the
date of demand for such payment (or, if such demand is made after
11:00 a.m. Houston, Texas time (in the case of a U.S. Letter of
Credit) or 12:00 noon Toronto, Ontario time (in the case of a Canadian
Letter of Credit) on such date, from the next succeeding Business Day)
to the date of payment by such Lender of such amount at a rate of
interest per annum equal to (i) in respect of U.S. Letters of Credit,
the Federal Funds Rate, (ii) in respect of Canadian Letters of Credit
which are denominated in Dollars, the Base Rate plus two percent (2%)
and (iii) in respect of Canadian Letters of Credit which are
denominated in Canadian Dollars, the CDOR Rate. To the extent that it
is ultimately determined that the applicable Borrower is relieved of
its obligation to reimburse the applicable Issuer because of such
Issuer's gross negligence or willful misconduct in determining that
documents received under any applicable Letter of Credit comply with
the terms thereof, the applicable Issuer shall be obligated to refund
to the paying Lenders all amounts paid to such Issuer to reimburse
Issuer for the applicable drawing under such Letter of Credit.
(iv) U.S. Borrower or the Canadian Borrower, as the case may
be, shall be irrevocably and unconditionally obligated forthwith to
reimburse the appropriate Agent, on the date on which such Agent
notifies U.S. Borrower or the Canadian Borrower, as the case may be,
of the date and amount of any payment by the applicable Issuer of any
drawing under a Letter of Credit, for the amount paid by such Issuer
upon such drawing, without presentment, demand, protest or other
formalities of any kind, all of which are hereby waived. Such
reimbursement may, subject to satisfaction of the conditions in
Sections 5.1 and 5.2 hereof, the limitations on size contained in
Section 2.1 and to the Maximum U.S. Available Amount or Maximum
Canadian Available Amount, as the case may be (after
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adjustment in the same to reflect the elimination of the corresponding
Letter of Credit Liability), be made by the borrowing of Loans or, in
the case of the Canadian Borrower, by the issuance, acceptance and
purchase of Bankers' Acceptances. The applicable Agent will pay to
each Lender such Lender's Commitment Percentage of all amounts
received from U.S. Borrower or the Canadian Borrower, as the case may
be, for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only
to the extent such Lender has made payment to the applicable Agent in
respect of such Letter of Credit pursuant to clause (iii) above.
(v) U.S. Borrower or the Canadian Borrower, as the case may
be, will pay to the appropriate Agent at the Principal Office of such
Agent for the account of each applicable Lender a letter of credit fee
with respect to each Letter of Credit equal to the greater of (x) $500
or (y) the Letter of Credit Fee Percentage multiplied by the daily
average amount available for drawings under each Letter of Credit (and
computed on the basis of the actual number of days elapsed in a year
composed of 360 days), in each case for the period from and including
the date of issuance of such Letter of Credit to and including the
date of expiration or termination thereof, such fee to be due and
payable quarterly in arrears on each three (3) month anniversary of
the issuance of the applicable Letter of Credit and upon expiration or
termination of the applicable Letter of Credit. The applicable Agent
will pay to each applicable Lender, promptly after receiving any
payment in respect of letter of credit fees referred to in this clause
(v), an amount equal to the product of such Lender's U.S. Commitment
Percentage or Canadian Commitment Percentage, as the case may be,
times the amount of such fees. In addition to and cumulative of the
above described fees, U.S. Borrower or the Canadian Borrower, as the
case may be, shall pay to the appropriate Agent, for the account of
the applicable Issuer, in advance on the date of the issuance of the
applicable Letter of Credit, a fronting fee in an amount equal to 1/8%
of the face amount of the applicable Letter of Credit (such fronting
fee to be retained by the applicable Issuer for its own account).
(vi) The issuance by the applicable Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Section 5 hereof, be subject to the conditions precedent (A) that such
Letter of Credit shall be in such form and contain such terms as shall
be reasonably satisfactory to applicable Agent, and (B) that U.S.
Borrower or the Canadian Borrower, as the case may be, shall have
executed and delivered such Applications and other instruments and
agreements relating to such Letter of Credit as the applicable Agent
shall have reasonably requested and are not inconsistent with the
terms of this Agreement. In the event of a conflict between the terms
of this Agreement and the terms of any Application, the terms hereof
shall control.
(vii) Each Issuer will send to U.S. Borrower or the Canadian
Borrower, as the case may be, and each applicable Lender, immediately
upon issuance of any Letter of Credit issued by such Issuer or any
amendment thereto, a true and correct copy of such Letter of Credit or
amendment.
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(c) Indemnification; Release. U.S. Borrower or the Canadian Borrower,
as the case may be, hereby indemnifies and holds harmless each Agent, each
Lender and each Issuer from and against any and all claims, damages, losses,
liabilities, costs or expenses which such Agent, such Lender or such Issuer may
incur (or which may be claimed against such Agent, such Lender or such Issuer
by any Person whatsoever), REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY
THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, in connection with the
execution and delivery of any Letter of Credit or transfer of or payment or
failure to pay under any Letter of Credit; provided that U.S. Borrower or the
Canadian Borrower, as the case may be, shall not be required to indemnify or
hold harmless any party seeking indemnification for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the party seeking
indemnification or exoneration, or (ii) the failure by the party seeking
indemnification to pay under any Letter of Credit after the presentation to it
of a request required to be paid under applicable law. U.S. Borrower or the
Canadian Borrower, as the case may be, hereby releases, waives and discharges
each Agent, each Lender and each Issuer from any claims, causes of action,
damages, losses, liabilities, reasonable costs or expenses which may now exist
or may hereafter arise, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason of or in connection
with the failure of any Agent, any Issuer or any other Lender to fulfill or
comply with its obligations to such Agent, such Lender or such Issuer, as the
case may be, hereunder (but nothing herein contained shall affect any rights
U.S. Borrower or the Canadian Borrower, as the case may be, may have against
such defaulting party or may have in respect of gross negligence or willful
misconduct). Nothing in this Section 2.2(c) is intended to limit the
obligations of U.S. Borrower or the Canadian Borrower, as the case may be,
under any other provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. Subject to
Sections 11.7 and 11.17 hereof, if as a result of any Regulatory Change there
shall be imposed, modified or deemed applicable any tax (other than any tax
based on or measured by net income), reserve, special deposit or similar
requirement against or with respect to or measured by reference to Letters of
Credit issued or to be issued hereunder or participations in such Letters of
Credit, and the result shall be to increase the cost to any Lender of issuing
or maintaining any Letter of Credit or any participation therein, or materially
reduce any amount receivable by any Lender hereunder in respect of any Letter
of Credit or any participation therein (which increase in cost, or reduction in
amount receivable, shall be the result of such Lender's reasonable allocation
of the aggregate of such increases or reductions resulting from such event),
then such Lender shall notify U.S. Borrower or the Canadian Borrower, as the
case may be, through the appropriate Agent (which notice shall be accompanied
by a statement setting forth in reasonable detail the basis for the
determination of the amount due), and within 15 Business Days after demand
therefor by such Lender through such Agent, U.S. Borrower or the Canadian
Borrower, as the case may be, shall pay to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such increased costs or reductions in amount. Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to U.S. Borrower or the Canadian Borrower, as
the case may be, shall be conclusive as to the amount thereof, absent manifest
error,
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and may be computed using any reasonable averaging and attribution method. Each
Lender will notify U.S. Borrower or the Canadian Borrower, as the case may be,
through the appropriate Agent of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this
Section as promptly as practicable after any executive officer of such Lender
obtains knowledge thereof and determines to request such compensation, and (if
so requested by U.S. Borrower or the Canadian Borrower, as the case may be,
through the appropriate Agent) will designate a different lending office of
such Lender for the issuance or maintenance of Letters of Credit by such Lender
or will take such other action as U.S. Borrower or the Canadian Borrower, as
the case may be, may reasonably request if such designation or action is
consistent with the internal policy of such Lender and legal and regulatory
restrictions, can be undertaken at no additional cost, will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender (provided that no such U.S.
Lender shall have any obligation so to designate a different lending office
which is not located in the United States of America and no such Canadian
Lender shall have any obligation so to designate a different lending office
which is not located in Canada).
2.3 Certain Provisions Relating to Bankers' Acceptances.
(a) Subject to the terms and conditions hereof, each Canadian Lender
severally agrees to accept and purchase Bankers' Acceptances drawn upon it by
the Canadian Borrower denominated in Canadian Dollars. The Canadian Borrower
shall notify the Canadian Agent by irrevocable written notice (each a "Bankers'
Acceptance Notice") by 12:00 noon (Toronto, Ontario time) two (2) Business Days
prior to the proposed date of any borrowing by way of Bankers' Acceptances.
Each borrowing by way of Bankers' Acceptances shall be in a minimum aggregate
face amount of C$1,000,000.00 and integral multiples of C$100,000.00 in excess
thereof. The face amount of each Bankers' Acceptance shall be C$100,000.00 or
any integral multiple thereof. Each Bankers' Acceptance Notice shall be in the
form of Exhibit G.
(1) Bankers' Acceptances shall be issued and shall mature on
a Business Day. Each Bankers' Acceptance shall have a term of 30, 60,
90 or, if available, 180 days excluding days of grace and shall mature
on or before the Revolving Loan Maturity Date and shall be in form and
substance reasonably satisfactory to each Canadian Lender.
(2) To facilitate the acceptance of Bankers' Acceptances
under this Agreement, the Canadian Borrower shall, upon execution of
this Agreement and from time to time as required, provide to the
Canadian Agent drafts, in form satisfactory to the Canadian Agent,
duly executed and endorsed in blank by the Canadian Borrower in
quantities sufficient for each Canadian Lender to fulfill its
obligations hereunder. In addition, the Canadian Borrower hereby
appoints each Canadian Lender as its attorney to sign and endorse on
its behalf, in handwriting or by facsimile or mechanical signature as
and when deemed necessary by such Canadian Lender, blank forms of
Bankers' Acceptances. The Canadian Borrower recognizes and agrees that
all Bankers' Acceptances signed and/or endorsed on its behalf by a
Canadian Lender shall bind the Canadian Borrower as fully and
effectually as if
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signed in the handwriting of and duly issued by the proper signing
officer of the Canadian Borrower. Each Canadian Lender is hereby
authorized to issue such Bankers' Acceptances endorsed in blank in
such face amounts as may be determined by such Canadian Lender
provided that the aggregate amount thereof is equal to the aggregate
amount of Bankers' Acceptances required to be accepted by such
Canadian Lender. No Canadian Lender shall be responsible or liable for
its failure to accept a Bankers' Acceptance if the cause of such
failure is, in whole or in part, due to the failure of the Canadian
Borrower to provide duly executed and endorsed drafts to the Canadian
Agent on a timely basis nor shall any Canadian Lender be liable for
any damage, loss or other claim arising by reason of any loss or
improper use of any such instrument except loss or improper use
arising by reason of the gross negligence or willful misconduct of
such Canadian Lender, its officers, employees, agents or
representatives. Each Canadian Lender shall maintain a record with
respect to Bankers' Acceptances (i) received by it from the Canadian
Agent in blank hereunder, (ii) voided by it for any reason, (iii)
accepted by it hereunder, (iv) purchased by it hereunder and (v)
canceled at their respective maturities. Each Canadian Lender further
agrees to retain such records in the manner and for the statutory
periods provided in the various Canadian provincial or federal
statutes and regulations which apply to such Canadian Lender.
(3) Drafts of the Canadian Borrower to be accepted as
Bankers' Acceptances hereunder shall be duly executed by a duly
authorized officer of the Canadian Borrower or by a Canadian Lender on
its behalf as aforesaid. Notwithstanding that any person whose
signature appears on any Bankers' Acceptance as a signatory for the
Canadian Borrower or for a Canadian Lender as attorney for Canadian
Borrower may no longer be an authorized signatory for the Canadian
Borrower or such Canadian Lender, as the case may be, at the date of
issuance of a Bankers' Acceptance, such signature shall nevertheless
be valid and sufficient for all purposes as if such authority had
remained in force at the time of such issuance and any such Bankers'
Acceptance so signed shall be binding on the Canadian Borrower.
(4) Promptly following receipt of a Bankers' Acceptance
Notice, the Canadian Agent shall so advise the Canadian Lenders and
shall advise each Canadian Lender of the face amount of each Bankers'
Acceptance to be accepted by it and the term thereof. The aggregate
face amount of Bankers' Acceptances to be accepted by a Canadian
Lender shall be determined by the Canadian Agent by reference to the
respective Canadian Commitments of the Canadian Lenders, except that,
if the face amount of a Bankers' Acceptance, which would otherwise be
accepted by a Canadian Lender, would not be C$100,000.00 or an
integral multiple thereof, such face amount shall be increased or
reduced by the Canadian Agent in its sole and unfettered discretion to
the nearest integral multiple of C$100,000.00.
(5) Each Bankers' Acceptance to be accepted by a Canadian
Lender shall be accepted at such Canadian Lender's office shown on the
signature pages hereof or as otherwise designated by such Canadian
Lender from time to time.
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(6) On the relevant borrowing date, each Canadian Lender
severally agrees to purchase from the Canadian Borrower, at the face
amount thereof discounted by the Applicable BA Discount Rate, any
Bankers' Acceptance accepted by it and provide to the Canadian Agent,
for the account of the Canadian Borrower, the BA Discount Proceeds in
respect thereof after deducting therefrom the amount of the Acceptance
Fee payable by the Canadian Borrower to such Canadian Lender under
Section 2.3(c) in respect of such Bankers' Acceptance.
(7) Each Canadian Lender may at any time and from time to
time hold, sell, rediscount or otherwise dispose of any or all
Bankers' Acceptances accepted and purchased by it.
(8) The Canadian Borrower waives presentment for payment and
any other defense to payment of any amounts due to a Canadian Lender
in respect of a Bankers' Acceptance accepted by it pursuant to this
Agreement which might exist solely by reason of such Bankers'
Acceptance being held, at the maturity thereof, by such Canadian
Lender in its own right and the Canadian Borrower agrees not to claim
any days of grace if such Canadian Lender as holder sues the Canadian
Borrower on the Bankers' Acceptances for payment of the amount payable
by the Canadian Borrower thereunder.
(b) With respect to each Bankers' Acceptance, the Canadian Borrower,
prior to the occurrence and continuation of a Default, may give irrevocable
telephone or written notice (or such other method of notification as may be
agreed upon between the Canadian Agent and the Canadian Borrower) to the
Canadian Agent at or before 12:00 noon (Toronto, Ontario time) two (2) Business
Days prior to the maturity date of such Bankers' Acceptance followed by written
confirmation electronically transmitted to the Canadian Agent on the same day,
of the Canadian Borrower's intention to issue one or more Bankers' Acceptance
on such maturity date (each a "Refunding Bankers' Acceptance") to provide for
the payment of such maturing Bankers' Acceptance (it being understood that
payments by the Canadian Borrower and fundings by the Canadian Lenders in
respect of each maturing Bankers' Acceptance and each related Refunding
Bankers' Acceptance shall be made on a net basis reflecting the difference
between the face amount of such maturing Bankers' Acceptance and the BA
Discount Proceeds (net of the applicable Acceptance Fee) of such Refunding
Bankers' Acceptance). Any funding on account of any maturing Bankers'
Acceptance must be made at or before 12:00 noon (Toronto, Ontario time) on the
maturity date of such Bankers' Acceptance. If the Canadian Borrower fails to
give such notice, then subject to satisfaction of the conditions in Section 5
hereof and to the Maximum Canadian Available Amount, the Canadian Borrower
shall be irrevocably deemed to have requested and to have been advanced a
Canadian Prime Loan in the face amount of such maturing Bankers' Acceptance on
the maturity date of such Bankers' Acceptance from the Canadian Lender which
accepted such maturing Bankers' Acceptance, which Canadian Prime Loan shall
thereafter bear interest as such in accordance with the provisions hereof until
paid in full.
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(c) An Acceptance Fee shall be payable by the Canadian Borrower to
each Canadian Lender in advance (in the manner specified in Section 2.3(a)(6))
in respect of, and as a condition precedent to the acceptance by such Canadian
Lender of, a Bankers' Acceptance to be accepted by such Canadian Lender
calculated at the rate per annum equal to the Margin Percentage applicable to
LIBOR Borrowings, calculated on the face amount of such Bankers' Acceptance and
computed on the basis of the number of days in the term of such Bankers'
Acceptance and a year of 365 days.
2.4 Terminations, Reductions or Reallocations of Commitments.
(a) Mandatory. On the Termination Date, all U.S. Commitments and
Canadian Commitments shall be terminated in their entirety.
(b) Optional. U.S. Borrower or Canadian Borrower, as the case may be,
shall have the right to terminate or reduce the unused portion of the U.S.
Commitments or the Canadian Commitments, as the case may be, at any time or
from time to time, provided that (i) U.S. Borrower or Canadian Borrower, as the
case may be, shall give notice of each such termination or reduction to the
appropriate Agent as provided in Section 4.3 hereof and (ii) each such partial
reduction shall be in an integral multiple of $2,000,000. Notwithstanding the
foregoing, U.S. Borrower may not reduce the U.S. Commitments below the then
outstanding principal balance of the U.S. Revolving Loan Obligations and
Canadian Borrower may not reduce the Canadian Commitments below the then
outstanding principal balance of the Canadian Obligations. No termination or
reduction of the Commitments pursuant to this provision may be reinstated
without the prior written approval of Agents and the Lenders.
(c) Reallocations. Any Dual Lender may agree with Borrowers to
reallocate its existing U.S. Commitment and Canadian Commitment, so long as the
sum of such U.S. Commitment and Canadian Commitment remains unchanged. In
addition, with the prior written consent of all of the Dual Lenders, any U.S.
Lender may agree with Borrowers to convert a portion of its U.S. Commitment
into a Canadian Commitment, thereby becoming a Dual Lender, and any Canadian
Lender may agree with Borrowers to convert a portion of its Canadian Commitment
into a U.S. Commitment, in each case so long as (i) each Lender continues to be
a U.S. Lender with a U.S. Commitment of at least $1,000,000 and (ii) the sum of
such Lender's U.S. Commitment and Canadian Commitment remains equal to the
aggregate amount of such Lender's U.S. Commitment and Canadian Commitment prior
to such reallocation. Borrowers shall give written notice to the Agents of any
reallocation pursuant to this provision at least ten (10) Business Days prior
to the effective date of any such reallocation. No Lender shall be required to
agree to any such reallocation, but may do so at its option, in its sole
discretion. The following conditions precedent must be satisfied prior to any
such reallocation becoming effective:
(1) no Default or Event of Default shall have occurred and be
continuing;
(2) if, as a result of any such reallocation, the aggregate
U.S. Revolving Loan Obligations would exceed the aggregate of all of
the U.S. Commitments, then the U.S.
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Borrower shall, on the effective date of such reallocation, repay or
prepay U.S. Revolving Loans (or provide Cover for Letter of Credit
Liabilities relating to U.S. Letters of Credit) in accordance with this
Agreement in an aggregate principal amount such that, after giving
effect thereto, the aggregate U.S. Revolving Loan Obligations shall not
exceed the aggregate of all of the U.S. Commitments;
(3) if, as a result of any such reallocation, the Total
Canadian Exposure would exceed the aggregate of all of the Canadian
Commitments, then the Canadian Borrower shall, on the effective date
of such reallocation, repay or prepay Canadian Revolving Loans (or
provide Cover for Letter of Credit Liabilities relating to Canadian
Letters of Credit or for Bankers' Acceptance Liabilities) in
accordance with this Agreement in an aggregate principal amount such
that, after giving effect thereto, the Total Canadian Exposure shall
not exceed the aggregate of all of the Canadian Commitments;
(4) Borrowers shall have paid any amounts (or shall have
provided Cover) due under Sections 2.9(c) or (d) hereof on the date of
such reallocation;
(5) the Maximum Canadian Available Amount shall be adjusted
to equal the sum of all of the Canadian Commitments after giving
effect to such reallocation and the Maximum U.S. Available Amount
shall be adjusted to equal the sum of all of the U.S. Commitments
after giving effect to such reallocation;
(6) participations by the Lenders in the outstanding Letters
of Credit and the Letter of Credit Liabilities and the outstanding
Loans of the Lenders shall be adjusted to give effect to such
reallocation; provided, however, that in lieu of requiring any
prepayment of any Bankers' Acceptances in order to make appropriate
adjustments to give effect to such reallocations, Canadian Borrower
shall be required to provide additional Cover for any applicable
portion of the Bankers' Acceptance Liabilities;
(7) each Lender whose U.S. Commitment or Canadian Commitment
shall be the subject of any reallocation shall have received from the
Borrowers a fee equal to the greater of $3,000.00 or 1/16% of the
amount of the increase or decrease, as the case be, in its Canadian
Commitment.
2.5 Commitment Fees.
(a) U.S. Borrower shall pay to U.S. Agent for the account of each U.S.
Lender, and Canadian Borrower shall pay to Canadian Agent for the account of
each Canadian Lender, commitment fees for the Availability Period at a rate per
annum equal to the Commitment Fee Percentage. Such commitment fees shall be
computed (on the basis of the actual number of days elapsed in a year composed
of 360 days) on each day and shall be based on the excess of (x) the aggregate
amount of each Lender's U.S. Commitment or Canadian Commitment, as the case may
be, for such day over (y) the sum of (i) the aggregate unpaid principal balance
(in Dollars) of such
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Lender's applicable Note or Notes on such day plus (ii) the aggregate
applicable Letter of Credit Liabilities as to such Lender for such day plus, in
the case of Canadian Lenders only, (iii) the aggregate Bankers' Acceptance
Liabilities outstanding on such day. Accrued commitment fees shall be payable
in arrears on the Quarterly Dates prior to the Termination Date and on the
Termination Date, with any Canadian Obligations converted to Dollars at the
Exchange Rate on each such date for the purposes of each such calculation.
(b) All past due fees payable under this Section shall bear interest
at the Past Due Rate.
2.6 Several Obligations. The failure of any Lender to make any Loan to
be made by it or to accept and purchase any Bankers' Acceptance required to be
so accepted and purchased by it on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan or to accept and
purchase its Bankers' Acceptance on such date, but neither any Agent nor any
Lender shall be responsible or liable for the failure of any other Lender to
make a Loan or to accept and purchase any Bankers' Acceptance or to participate
in, or co-issue, any Letter of Credit. Notwithstanding anything contained
herein to the contrary, (i) if a U.S. Lender fails to make a U.S. Revolving
Loan as and when required hereunder, then upon each subsequent event which
would otherwise result in payments of principal being made to the defaulting
U.S. Lender, the amount which would have been paid to the defaulting U.S.
Lender shall be divided among the non-defaulting U.S. Lenders ratably according
to their respective Commitment Percentages until the Obligations of each U.S.
Lender (including the defaulting U.S. Lender) are equal to such U.S. Lender's
Commitment Percentage of the total U.S. Revolving Loan Obligations and (ii) if
a Canadian Lender fails to make a Canadian Revolving Loan or accept and
purchase any Bankers' Acceptance as and when required hereunder, then upon each
subsequent event which would otherwise result in payments of principal being
made to the defaulting Canadian Lender, the amount which would have been paid
to the defaulting Canadian Lender shall be divided among the non-defaulting
Canadian Lenders ratably according to their respective Commitment Percentages
until the Obligations of each Canadian Lender (including the defaulting
Canadian Lender) are equal to such Canadian Lender's Commitment Percentage of
the total Canadian Obligations.
2.7 Notes. The U.S. Revolving Loans made by each U.S. Lender shall be
evidenced by a single U.S. Revolving Note of U.S. Borrower in substantially the
form of Exhibit D hereto payable to the order of such U.S. Lender in a
principal amount equal to the U.S. Commitment of such U.S. Lender, and
otherwise duly completed. The Canadian Revolving Loans made by each Canadian
Lender which are denominated in Dollars shall be evidenced by a single Canadian
Revolving Note of Canadian Borrower in substantially the form of Exhibit C
hereto payable to the order of such Canadian Lender in a principal amount equal
to the Canadian Commitment of such Canadian Lender, and otherwise duly
completed. The Canadian Prime Loans made by each Canadian Lender shall be
evidenced by a single Canadian Dollar Revolving Note of Canadian Borrower in
substantially the form of Exhibit H hereto payable to the order of such
Canadian Lender in a principal amount equal to two times the Canadian
Commitment of such Canadian Lender, and otherwise duly completed. The Term
Loans made by each Lender shall be evidenced by a single Term Note of U.S.
Borrower in substantially the form of Exhibit J hereto payable to the order of
such
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Lender in a principal amount equal to the sum of the outstanding principal
balance of the Term Loans made by such Lender, and otherwise duly completed.
The promissory notes described in this Section are each, together with all
renewals, extensions, modifications and replacements thereof and substitutions
therefor, called a "Note" and collectively called the "Notes". Each Lender is
hereby authorized by each Borrower to endorse on the schedule (or a
continuation thereof) that may be attached to each Note of such Lender, to the
extent applicable, the date, amount, type of and the applicable period of
interest for each Loan made by such Lender to the applicable Borrower
hereunder, and the amount of each payment or prepayment of principal of such
Loan received by such Lender, provided, that any failure by such Lender to make
any such endorsement shall not affect the obligations of any Borrower under
such Note or hereunder in respect of such Loan.
2.8 Use of Proceeds. The proceeds of the Loans and of the acceptance
and purchase of Bankers' Acceptances shall be used by the Borrowers for
acquisitions (including the acquisition and related costs contemplated by the
Purchase Agreement) and for other working capital and general corporate
purposes. Neither any Agent nor any Lender shall have any responsibility as to
the use of any proceeds of the Loans or of the acceptance and purchase of
Bankers' Acceptances.
2.9 Currency Fluctuations.
(a) Not later than 1:00 p.m. (Houston, Texas time) on each Calculation
Date, the U.S. Agent shall determine the Exchange Rate as of such Calculation
Date. For purposes of this Section and Section 3.2(b)(4) hereof, the Exchange
Rate so determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (a "Reset Date").
(b) Not later than 4:00 p.m. (Houston, Texas time) on each Reset Date,
the U.S. Agent shall consult with the Canadian Agent and the Agents shall
determine the Total Canadian Exposure and the aggregate U.S. Revolving Loan
Obligations.
(c) If, on any Reset Date or on the date of any reallocation of the
U.S. Commitments and the Canadian Commitments pursuant to Section 2.4(c)
hereof, the sum of the aggregate U.S. Revolving Loan Obligations and the Total
Canadian Exposure exceeds the aggregate of all of the U.S. Commitments and the
Canadian Commitments by five percent (5%) or more, then (i) the Agents shall
give notice thereof to the Lenders and Borrowers and (ii) the Borrowers shall
within two (2) Business Days thereafter, repay or prepay Loans (or provide
Cover for Letter of Credit Liabilities or Bankers' Acceptance Liabilities) in
accordance with this Agreement in an aggregate principal amount sufficient to
reduce the sum of the aggregate U.S. Revolving Loan Obligations and the Total
Canadian Exposure to the aggregate of all of the U.S. Commitments and the
Canadian Commitments.
(d) If, on any day prior to the Termination Date, the Total Canadian
Exposure exceeds the aggregate of all of the Canadian Commitments by five
percent (5%) or more, then (i) the Canadian Agent shall give notice thereof to
the Canadian Borrower and the Canadian Lenders and (ii) within two (2) Business
Days thereafter, the Canadian Borrower shall repay or prepay Canadian
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Revolving Loans (or provide Cover for Letter of Credit Liabilities relating to
Canadian Letters of Credit or Bankers' Acceptance Liabilities) in accordance
with this Agreement in an aggregate principal amount such that, after giving
effect thereto, the Total Canadian Exposure shall not exceed the aggregate of
all of the Canadian Commitments.
3. Borrowings, Prepayments and Interest Options.
3.1 Borrowings. The applicable Borrower shall give the applicable
Agent notice of each borrowing to be made hereunder as provided in Section 4.3
hereof and the applicable Agent shall promptly notify each applicable Lender of
such request. Not later than 2:00 p.m. Houston, Texas time (in the case of U.S.
Revolving Loans which are same day fundings), 11:00 a.m. Houston, Texas time
(in the case of U.S. Revolving Loans which are not same day fundings), 11:00
a.m. Toronto, Ontario time (in the case of Canadian Revolving Loans which are
not same day fundings and Bankers' Acceptances) or 1:00 p.m. Toronto, Ontario
time (in the case of Canadian Revolving Loans which are same day fundings) on
the date specified for each such borrowing hereunder, each applicable Lender
shall make available the amount of the Loan, if any, to be made by it on such
date and/or the proceeds of the acceptance and purchase of any Bankers'
Acceptances, if any, to be so accepted and purchased by it on such date to the
applicable Agent at its Principal Office, in immediately available funds, for
the account of the applicable Borrower. Such amounts received by the applicable
Agent will be held in an account maintained by the applicable Borrower with the
applicable Agent. The amounts so received by the applicable Agent shall,
subject to the terms and conditions of this Agreement, be made available to the
applicable Borrower by wiring or otherwise transferring, in immediately
available funds, such amount to an account designated by the applicable
Borrower and approved by the applicable Agent.
3.2 Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3 hereof,
each Borrower shall have the right to prepay, on any Business Day, in whole or
in part, without the payment of any premium, penalty or fee, any of the
Obligations (other than Obligations relating to Bankers' Acceptances) at any
time or from time to time, provided that the applicable Borrower shall give the
applicable Agent notice of each such prepayment as provided in Section 4.3
hereof. Each optional prepayment on a Loan shall be in an amount equal to an
integral multiple of $3,000,000 (in respect of Term Loans), $500,000 (in
respect of Revolving Loans denominated in Dollars) or C$500,000 (in respect of
Revolving Loans denominated in Canadian Dollars). Bankers' Acceptances may not
be prepaid. Such optional prepayments of Term Loans shall be applied ratably
(based on outstanding principal balances) to all Term Notes and shall be
applied to scheduled principal installments in inverse order of their
maturities.
(b) Mandatory Prepayments and Cover. Except, in each case, as provided
in Section 3.3 hereof,
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(1) Insurance Proceeds and Condemnation Awards.
(i) Promptly following the receipt thereof by U.S.
Borrower or any of its Subsidiaries (other than Foreign
Subsidiaries), U.S. Borrower shall deposit or cause to be
deposited with U.S. Agent in an interest bearing account (but
without any obligation to maximize such interest) all of the
net cash proceeds of any payment or award in excess of
$500,000 made to any such Person under any policy of Property
insurance with respect to any Property owned by such Person
or pursuant to any condemnation award with respect to any
such Property; provided such amounts have not theretofore
been reasonably expended for the restoration or replacement
of the asset in respect of which such payment or award was
made. Such amounts shall be collaterally assigned to U.S.
Agent as security for the U.S. Obligations in a manner
reasonably acceptable to U.S. Agent. Upon delivery to U.S.
Agent of written certification by U.S. Borrower that the
applicable Obligor has reasonably expended amounts or
committed in writing to expend amounts for the restoration or
replacement of the asset in respect of which such payment or
award was made, specifying the amount expended or committed,
so long as no Default or Event of Default shall have occurred
and be continuing any such amount deposited with U.S. Agent
shall be released by U.S. Agent to U.S. Borrower; provided,
however, that, in the event that within 180 days of receipt
of such payment or award by U.S. Borrower, to the extent U.S.
Borrower shall not have actually spent or certified to U.S.
Agent its intention to expend a substantially equivalent
amount for the restoration or replacement of the asset in
respect of which such payment or award was made or to
purchase other assets that may be productively used in the
business of the U.S. Borrower or the applicable Subsidiary,
U.S. Borrower shall make a prepayment on the Term Loans
(using any funds deposited with U.S. Agent pursuant to this
Section 3.2(b)(1) or other funds) in the amount of the excess
of the amount of such payment or award over the amount of
such expenditures and/or commitment on such 180th day. Such
prepayment shall be applied to the Term Notes secured by the
applicable Collateral and shall be applied to scheduled
principal installments in inverse order of their maturities.
(ii) In cases where the amount of the net cash
proceeds of any payment or award is equal to or less than
$500,000 and no Default or Event of Default has occurred and
is continuing, such proceeds may be paid to any Obligor, and
if received by U.S. Agent shall be paid by U.S. Agent to U.S.
Borrower, for use in paying for replacements or repairs of or
substitutes for the damaged, destroyed or taken assets or in
a manner otherwise consistent with this Agreement.
(2) Excess Cash Flow. Within fifteen (15) Business Days after
the delivery of the Annual Financial Statements pursuant to Section
7.2 hereof with respect to the fiscal year of U.S. Borrower
(commencing with the fiscal year ending on March 31, 1999), U.S.
Borrower shall make a prepayment on the Term Loans in an amount equal
to (i) Excess Cash
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Flow for such fiscal year times the Excess Cash Flow Percentage less
(ii) optional prepayments made on the Term Loans during such fiscal
year. Such prepayment shall be applied ratably to the Term Notes
(based on outstanding principal balances) and shall be applied to
scheduled principal installments in inverse order of their maturities.
(3) U.S. Borrowing Base. U.S. Borrower shall from time to
time on demand by U.S. Agent prepay the U.S. Revolving Loans (or
provide Cover for Letter of Credit Liabilities relating to U.S.
Letters of Credit) in such amounts as shall be necessary so that at
all times the aggregate outstanding amount of all U.S. Revolving Loan
Obligations shall be less than or equal to the Maximum U.S. Available
Amount.
(4) Canadian Borrowing Base. Canadian Borrower shall from
time to time on demand by Canadian Agent prepay the Canadian Revolving
Loans (or provide Cover for Letter of Credit Liabilities relating to
Canadian Letters of Credit) in such amounts as shall be necessary so
that at all times the aggregate outstanding amount of all Canadian
Obligations shall be less than or equal to the Maximum Canadian
Available Amount (provided, however, that for purposes of this clause
(4), the Exchange Rate used for conversion of Canadian Dollars into
Dollars shall be the Exchange Rate as of the most recently occurring
Calculation Date).
(5) Sale of Assets. U.S. Borrower shall make the payments
required by Section 8.4(c) hereof.
(6) Equity Proceeds. An amount equal to fifty percent (50%)
of the net proceeds realized from the issuance of any equity
securities by Group in connection with any public offering of
securities shall be applied as a prepayment on the Term Loans
concurrently with the receipt of such proceeds by Group. Such
prepayment shall be applied ratably to the Term Notes (based on
outstanding principal balances) and shall be applied to scheduled
principal installments in inverse order of their maturities.
(c) Term Loan Amortization. The principal of the Term Notes shall be
due and payable in quarterly installments, each due on a Quarterly Date,
beginning on March 31, 1999, equal to $1,160,714.29 (in the aggregate for all
Term Notes) and allocated among the Term Loan Lenders pro rata in accordance
with the unpaid principal balances of the Term Notes held by the Term Loan
Lenders. On the Term Loan Maturity Date, the entire unpaid principal balance of
each Term Note and all accrued and unpaid interest on the unpaid principal
balance of each Term Note shall be finally due and payable.
(d) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Loans shall be due and payable on the Interest Payment
Dates.
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(e) Payments and Interest on Reimbursement Obligations. Each Borrower
will pay to the applicable Agent for the account of each applicable Lender the
amount of each Reimbursement Obligation owed by such Borrower. Such payment
shall be due on the date on which the applicable Agent notifies the applicable
Borrower of the date and amount of the applicable payment by an Issuer of any
drawing under a Letter of Credit or on the date of maturity of any Bankers'
Acceptance. The amount of any Reimbursement Obligation may, if the applicable
conditions precedent specified in Sections 5.1 and 5.2 hereof have been
satisfied, be paid with the proceeds of Loans or, in the case of Canadian
Obligations, of the acceptance and purchase or Bankers' Acceptances. Subject to
Section 11.7 hereof, each Borrower will pay to the applicable Agent for the
account of each applicable Lender interest on any Reimbursement Obligation at
(i) at the applicable Base Rate (with respect to Reimbursement Obligations
denominated in Dollars) or at the Canadian Prime Rate (with respect to
Reimbursement Obligations denominated in Canadian Dollars) plus the applicable
Margin Percentage from the date such Reimbursement Obligation arises until the
date five (5) Business Days thereafter and (ii) at the applicable Past Due Rate
thereafter until the same is paid in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the
Canadian Dollar Revolving Notes shall bear interest at the Canadian Prime Rate
and the outstanding principal balance of the other Notes shall bear interest at
the applicable Base Rate; provided, that (1) all past due amounts, both
principal and accrued interest, shall bear interest at the Past Due Rate, and
(2) subject to the provisions hereof, each Borrower shall have the option of
having all or any portion of the principal balances of its Notes (other than
the Canadian Dollar Revolving Notes) from time to time outstanding bear
interest at a Eurodollar Rate. The records of Agents and each of the Lenders
with respect to Interest Options, Interest Periods and the amounts of Loans to
which they are applicable shall be binding and conclusive, absent manifest
error. Interest on the amount of each advance against the Notes shall be
computed on the amount of that advance and from the date it is made.
Notwithstanding anything in this Agreement to the contrary, for the full term
of the Notes the interest rate produced by the aggregate of all sums paid or
agreed to be paid to the holders of the Notes for the use, forbearance or
detention of the debt evidenced thereby (including all interest on the Notes at
the Stated Rate plus the Additional Interest) shall not exceed the Ceiling
Rate.
(b) Designation and Conversion. Each Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and subject
to the last sentence of Section 3.3(a) and the provisions of Section 3.3(c),
each Borrower may elect to have a Eurodollar Rate apply or continue to apply to
all or any portion of the principal balance of its Notes (other than the
Canadian Dollar Revolving Notes). Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding
principal balances of the applicable Notes. The Interest Options shall be
designated or converted in the manner provided below:
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(i) The applicable Borrower shall give the applicable Agent
telephonic notice, promptly confirmed by a Rate Designation
Notice (and the applicable Agent shall promptly inform each
applicable Lender thereof). Each such telephonic and written
notice shall specify the amount of the Loan and type (i.e.
U.S. Revolving Loan, Canadian Revolving Loan or Term Loan)
which is the subject of the designation, if any; the amount
of borrowings into which such borrowings are to be converted
or for which an Interest Option is designated; the proposed
date for the designation or conversion and the Interest
Period or Periods, if any, selected by the applicable
Borrower. Such telephonic notice shall be irrevocable and
shall be given to the applicable Agent no later than the
applicable Rate Designation Date.
(ii) No more than three (3) LIBOR Borrowings shall be in effect
with respect to the U.S. Revolving Loans at any time and no
more than three (3) LIBOR Borrowings shall be in effect with
respect to the Canadian Revolving Loans at any time. No more
than three (3) LIBOR Borrowings shall be in effect with
respect to the Term Loans at any time. No single LIBOR
Borrowing may include any combination of any two or more of
U.S. Revolving Loans, Canadian Revolving Loans and Term
Loans.
(iii) Each designation or conversion of a LIBOR Borrowing shall
occur on a LIBOR Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR
Borrowing may be converted to a Base Rate Borrowing or
another LIBOR Borrowing on any day other than the last day of
the applicable Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount
equal to $500,000 or an integral multiple of $100,000 in
excess thereof.
(vi) Each designation of an Interest Option with respect to the
U.S. Revolving Notes shall apply to all of the U.S. Revolving
Notes ratably in accordance with their respective outstanding
principal balances. Each designation of an Interest Option
with respect to the Canadian Revolving Notes shall apply to
all of the Canadian Revolving Notes ratably in accordance
with their respective outstanding principal balances. Each
designation of an Interest Option with respect to the Term
Notes shall apply to all of the Term Notes ratably in
accordance with their respective outstanding principal
balances. If any Lender assigns an interest in any of its
Notes when any LIBOR Borrowing is outstanding with respect
thereto, then such assignee shall have its ratable interest
in such LIBOR Borrowing.
(vii) The entire outstanding principal balance of the Canadian
Dollar Revolving Notes shall bear interest at the Canadian
Prime Rate.
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(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at any
time make it unlawful or impossible for any Lender to permit the establishment
of or to maintain any LIBOR Borrowing, the commitment of such Lender to
establish such LIBOR Borrowing shall forthwith be canceled and the applicable
Borrower shall forthwith, shall on the last day of the Interest Period relating
to any outstanding LIBOR Borrowing (or within such earlier period as may be
required by applicable law) (1) convert the LIBOR Borrowing of such Lender with
respect to which such demand was made to a Base Rate Borrowing; (2) pay all
accrued and unpaid interest to date on the amount so converted; and (3) pay any
amounts required to compensate each Lender for any additional cost or expense
which any Lender may incur as a result of such adoption of or change in such
Legal Requirement or in the interpretation or administration thereof and any
Funding Loss which any Lender may incur as a result of such conversion. If,
when any Agent so notifies any Borrower, such Borrower has given a Rate
Designation Notice specifying a LIBOR Borrowing but the selected Interest
Period has not yet begun, as to the applicable Lender such Rate Designation
Notice shall be deemed to be of no force and effect, as if never made, and the
balance of the Loans made by such Lender specified in such Rate Designation
Notice shall bear interest at the Base Rate until a different available
Interest Option shall be designated in accordance herewith.
(ii) Increased Cost of Borrowings. Subject to Section 11.17, if the
adoption after the Effective Date of any applicable Legal Requirement or any
change after the Effective Date in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive (whether or not having
the force of law) issued after the Effective Date by any central bank or
Governmental Authority shall at any time as a result of any portion of the
principal balances of the Notes being maintained on the basis of a Eurodollar
Rate:
(1) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment
due under any LIBOR Borrowing or other amount due
hereunder, other than income and franchise taxes of
the United States or its political subdivisions or
such other jurisdiction in which the applicable
Lender has its principal office or applicable
lending office; or
(2) change the basis of taxation of payments due from
any Borrower to any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of taxation
of the overall net income of such Lender); or
(3) impose, modify, increase or deem applicable any
reserve requirement (excluding that portion of any
reserve requirement included in the calculation
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of the applicable Eurodollar Rate), special deposit
requirement or similar requirement (including, but
not limited to, state law requirements) against
assets of any Lender, or against deposits with any
Lender, or against loans made by any Lender, or
against any other funds, obligations or other
Property owned or held by any Lender; or
(4) impose on any Lender any other condition regarding
any LIBOR Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by any Agent (accompanied by a statement setting
forth in reasonable detail the applicable Lender's basis therefor), the
applicable Borrower shall pay to the applicable Agent additional amounts which
shall compensate each Lender for such increased cost or reduced amount. The
determination by any Lender of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be conclusive and binding, absent
manifest error. Each Borrower shall have the right, if it receives from any
Agent any notice referred to in this paragraph, upon three Business Days'
notice to the applicable Agent (which shall notify each affected Lender),
either (i) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or
(ii) to convert the LIBOR Borrowing which is the subject of the notice to a
Base Rate Borrowing; provided, that any such repayment or conversion shall be
accompanied by payment of (x) the amount required to compensate each Lender for
the increased cost or reduced amount referred to in the preceding paragraph;
(y) all accrued and unpaid interest to date on the amount so repaid or
converted, and (z) any Funding Loss which any Lender may incur as a result of
such repayment or conversion. Each Lender will notify the applicable Borrower
through the applicable Agent of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this
Section as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and (if so requested by the applicable
Borrower through the applicable Agent) will designate a different lending
office of such Lender for the applicable LIBOR Borrowing or will take such
other action as the applicable Borrower may reasonable request if such
designation or action is consistent with the internal policy of such Lender and
legal and regulatory restrictions, will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such Lender,
be disadvantageous to such Lender.
(iii) Inadequacy of Pricing and Rate Determination. If, for any reason
with respect to any Interest Period, the applicable Agent (or, in the case of
clause 3 below, the applicable Lender) shall have determined (which
determination shall be conclusive and binding upon the applicable Borrower,
absent manifest error) that:
(1) such Agent is unable through its customary general
practices to determine any applicable Eurodollar
Rate, or
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(2) by reason of circumstances affecting the applicable
market, generally, such Agent is not being offered
deposits in United States dollars in such market,
for the applicable Interest Period and in an amount
equal to the amount of any applicable LIBOR
Borrowing requested by the applicable Borrower, or
(3) any applicable Eurodollar Rate will not adequately
and fairly reflect the cost to any Lender of making
and maintaining such LIBOR Borrowing hereunder for
any proposed Interest Period,
then the applicable Agent shall give the applicable Borrower notice thereof and
thereupon, (A) any Rate Designation Notice previously given by such Borrower
designating the applicable LIBOR Borrowing which has not commenced as of the
date of such notice from such Agent shall be deemed for all purposes hereof to
be of no force and effect, as if never given, and (B) until the applicable
Agent shall notify such Borrower that the circumstances giving rise to such
notice from such Agent no longer exist, each Rate Designation Notice requesting
the applicable Eurodollar Rate shall be deemed a request for a Base Rate
Borrowing, and any applicable LIBOR Borrowing then outstanding shall be
converted, without any notice to or from the applicable Borrower, upon the
termination of the Interest Period then in effect with respect to it, to a Base
Rate Borrowing.
(iv) Funding Losses. Each Borrower shall indemnify each applicable
Lender against and hold each applicable Lender harmless from any Funding Loss
relating to Loans to such Borrower or relating to Bankers' Acceptances
requested by such Borrower. Subject to Section 11.17, this indemnity shall
survive the payment of the Notes. Within 15 Business Days after demand by any
Agent (accompanied by a certificate of the applicable Lender setting forth in
reasonable detail the amount and calculation of the amount claimed as to any
Funding Losses, which shall be conclusive and binding upon the applicable
Borrower, absent manifest error), the applicable Borrower shall pay to such
Agent, for the account of such Lender, the amount of such Funding Losses.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing
by causing a branch or affiliate of such Lender to make such Loan and may
transfer and carry such Loan at, to or for the account of any branch office or
affiliate of such Lender; provided, that in such event for the purposes of this
Agreement such Loan shall be deemed to have been made by such Lender and the
obligation of the applicable Borrower to repay such Loan shall nevertheless be
to such Lender and shall be deemed held by it for the account of such branch or
affiliate. Without notice to any Borrower or any other Person, each rate
required to be calculated or determined under this Agreement shall
automatically fluctuate upward and downward in accordance with the provisions
of this Agreement. Interest at the Canadian Prime Rate or any applicable Prime
Rate shall be computed on the basis of the actual number of days elapsed in a
year consisting of 365 or 366 days, as the case may be. All other interest
required to be calculated or determined under this Agreement shall be computed
on the basis of the actual number of days elapsed in a year consisting of 360
days, unless the Ceiling Rate would thereby be exceeded, in which event, to the
extent necessary to avoid exceeding the Ceiling Rate,
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the applicable interest shall be computed on the basis of the actual number of
days elapsed in the applicable calendar year in which accrued.
(e) Funding Sources. Notwithstanding any provision of this Agreement
to the contrary, each Lender shall be entitled to fund and maintain its funding
of all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
any Borrower hereunder, under the Notes and under the other Loan Documents
shall be made in (i) with respect to Bankers' Acceptance Liabilities and
Canadian Prime Loans, Canadian Dollars and (ii) in all other cases, in Dollars,
in immediately available funds, to the applicable Agent at its Principal Office
(or in the case of a successor U.S. Agent, at the principal office of such
successor U.S. Agent in the United States or in the case of a successor
Canadian Agent, at the principal office of such successor Canadian Agent in
Canada), not later than 11:00 a.m. Houston, Texas time (in the case of any
payment by the U.S. Borrower) or 12:00 noon Toronto, Ontario time (in the case
of any payment by the Canadian Borrower) on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
(b) Each Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to the applicable
Agent the Obligations payable by such Borrower hereunder or thereunder to which
such payment is to be applied. Each payment received by any Agent hereunder,
under any Note or under any other Loan Document for the account of a Lender
shall be paid promptly to such Lender, in immediately available funds. If any
Agent fails to send to any Lender the applicable amount by the close of
business on the date any such payment is received by such Agent if such payment
is received prior to 11:00 a.m. Houston, Texas time (in the case of any payment
to a U.S. Lender) or 12:00 noon Toronto, Ontario time (in the case of any
payment to a Canadian Lender) (or on the next succeeding Business Day with
respect to payments which are received after such time), such Agent shall pay
to the applicable Lender interest on such amount from such date at a rate of
interest per annum equal to (i) in respect of Obligations which are denominated
in Dollars, the Federal Funds Rate and (ii) in respect of Canadian Obligations
which are denominated in Canadian Dollars, the CDOR Rate. Borrowers, Lenders
and Agents acknowledge and agree that this provision and each other provision
of this Agreement or any of the other Loan Documents relating to the
application of amounts in payment of the Obligations shall be subject to
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the provisions of Section 4.2(d) regarding pro rata application of amounts
after an Event of Default shall have occurred and be continuing.
(c) If the due date of any payment hereunder or under any other Loan
Document falls on a day which is not a Business Day, the due date for such
payments (except as otherwise provided in clause (2) of the definition of
"Interest Period") shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period of such
extension.
(d) All payments by any Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on
account of any present or future income, stamp, or other taxes, fees, duties,
withholding or other charges of any nature whatsoever imposed by any taxing
authority excluding in the case of each Agent, each Issuer and each Lender
taxes imposed on or measured by its net income or franchise taxes imposed by
the jurisdiction in which it is organized or through which it acts for purposes
of this Agreement (such non-excluded items being hereinafter referred to as
"Taxes"). If as a result of any change in law (or the interpretation thereof)
after the date that the applicable Agent, the applicable Issuer or the
applicable Lender became a party to this Agreement any withholding or deduction
from any payment to be made to, or for the account of, such Person by any
Borrower hereunder or under any other Loan Document is required in respect of
any Taxes pursuant to any applicable law, rule, or regulation, then such
Borrower will (i) pay to the relevant authority the full amount required to be
so withheld or deducted; (ii) to the extent available, promptly forward to the
applicable Agent an official receipt or other documentation reasonably
satisfactory to such Agent evidencing such payment to such authority; and (iii)
pay to the applicable Agent, for the account of each affected Person, such
additional amount or amounts as are necessary to ensure that the net amount
actually received by such Person will equal the full amount such Lender would
have received had no such withholding or deduction been required. Each such
Person shall determine such additional amount or amounts payable to it (which
determination shall, in the absence of manifest error, be conclusive and
binding on each Borrower). If any Agent, any Issuer or any Lender becomes aware
that any such withholding or deduction from any payment to be made by any
Borrower hereunder or under any other Loan Document is required, then such
Person shall promptly notify the applicable Agent and the applicable Borrower
thereof stating the reasons therefor and the additional amount required to be
paid under this Section. Each Lender shall execute and deliver to the
applicable Agent and the applicable Borrower such forms as it may be required
to execute and deliver pursuant to Section 11.13 hereof. To the extent that any
such withholding or deduction results from the failure of a Lender to provide a
form required by Section 11.13 hereof (unless such failure is due to some
prohibition under applicable Legal Requirements), the applicable Borrower shall
have no obligation to pay the additional amount required by clause (iii) above.
Anything in this Section notwithstanding, if any Lender elects to require
payment by any Borrower of any material amount under this Section, the
applicable Borrower may, within 60 days after the date of receiving notice
thereof and so long as no Default shall have occurred and be continuing, elect
to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination the applicable Borrower shall (i) if the
Agents and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender through such
date of termination or (ii) have arranged for another
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financial institution approved by the Agents (such approval not to be
unreasonably withheld or delayed) as of such date, to become a substitute
Lender for all purposes under this Agreement in the manner provided in Section
11.6; provided further that, prior to substitution for any Lender, the
applicable Borrower shall have given written notice to the Agents of such
intention and the Lenders shall have the option, but no obligation, for a
period of 60 days after receipt of such notice, to increase their U.S.
Commitments or Canadian Commitments, as the case may be, in order to replace
the affected Lender in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
made (x) in the case of Canadian Revolving Loans, ratably from the Canadian
Lenders in accordance with their respective Canadian Commitments, (y) in the
case of U.S. Revolving Loans, ratably from the U.S. Lenders in accordance with
their respective U.S. Commitments and (z) in the case of Term Loans, ratably
from the Term Loan Lenders in accordance with the amounts set forth opposite
their signature lines hereto under the heading "Term Loans"; (b) each payment
of commitment fees shall be made for the account of the Lenders, and each
termination or reduction of the U.S. Commitments or Canadian Commitments of the
Lenders under Section 2.3 hereof shall be applied, pro rata, according to the
Lenders' respective U.S. Commitments or Canadian Commitments, as the case may
be; (c) each payment by any Borrower of principal of or interest on the Term
Loans, Canadian Revolving Loans, U.S. Revolving Loans or any Bankers'
Acceptance, as the case may be, prior to the occurrence of an Event of Default
(or after the applicable Event of Default shall have been fully cured or
waived) shall be made to the applicable Agent for the account of the applicable
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Term Loans, Canadian Revolving Loans or U.S. Revolving Loans (as the case
may be) held by or Bankers' Acceptances accepted by such Lenders; (d) each
payment by any Borrower of principal of or interest on the Term Loans, Canadian
Revolving Loans, U.S. Revolving Loans or any Bankers' Acceptance, as the case
may be, while an Event of Default shall have occurred and be continuing, shall
be made to the applicable Agent for the account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Obligations held
by the Lenders (i.e. such payments shall be shared by all of the Lenders and
not restricted to the holders of U.S. Revolving Notes, Canadian Revolving
Notes, Canadian Dollar Notes or Term Notes, or Lenders having accepted Bankers'
Acceptances, as the case may be, regardless of any attempted contrary
designation by any Borrower), and (e) the applicable Lenders (other than the
applicable Issuer) shall purchase from the applicable Issuer participations in
each Letter of Credit to the extent of their respective U.S. Commitment
Percentages or Canadian Commitment Percentages, as the case may be.
4.3 Certain Actions, Notices, Etc. Notices to the applicable Agent of
any termination or reduction of U.S. Commitments or Canadian Commitments, as
the case may be, and of borrowings and optional prepayments of Loans and
requests for issuances of Letters of Credit shall be irrevocable and shall be
effective only if received by the applicable Agent not later than 10:00 a.m.
Houston, Texas time (in the case of U.S. Revolving Loans
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which are same day fundings), 11:00 a.m. Houston, Texas time (in the case of
U.S. Revolving Loans which are not same day fundings and U.S. Letters of
Credit), 12:00 noon Toronto, Ontario time (in the case of Canadian Revolving
Loans which are not same day fundings, Bankers' Acceptances and Canadian
Letters of Credit) or 10:00 a.m. Toronto, Ontario time (in the case of Canadian
Revolving Loans which are same day fundings) on the number of Business Days
prior to the date of the relevant termination, reduction, borrowing and/or
prepayment specified below:
Number of Business Days
Prior Notice
------------
Section 2.4(c) Reallocations 10
Termination or Reduction of U.S.
Commitments or Canadian Commitments 5
U.S. Revolving Loan or Canadian
Revolving Loan repayment same day
Base Rate Borrowings same day
and Canadian Prime Loans
Letter of Credit issuance 2
Prepayments required pursuant to
Section 3.2(b) same day
Optional prepayment of
Term Loan 5
Selection of a Eurodollar Rate 3 LIBOR
Business Days
Bankers' Acceptances 2
Each such notice of termination or reduction shall specify the amount of the
applicable U.S. Commitment or Canadian Commitment to be terminated or reduced.
Each such notice of borrowing or prepayment shall specify the amount of the
Loans to be borrowed or prepaid and the date of borrowing or prepayment (which
shall be a Business Day). The applicable Agent shall promptly notify the
affected Lenders of the contents of each such notice.
4.4 Non-Receipt of Funds by Any Agent. Unless the applicable Agent
shall have been notified by a Lender or a Borrower (the "Payor") prior to the
date on which such Lender is to make payment to such Agent of the proceeds of a
Loan (or funding of a drawing under a Letter of Credit or reimbursement with
respect to any drawing under a Letter of Credit or funding of a payment under a
Bankers' Acceptance or reimbursement with respect to any payment under
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a Bankers' Acceptance) to be made by it hereunder or the applicable Borrower is
to make a payment to such Agent for the account of one or more of the Lenders,
as the case may be (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to such Agent, the applicable Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to such Agent, the recipient of such payment (or, if such
recipient is the beneficiary of a Letter of Credit, the applicable Borrower
and, if such Borrower fails to pay the amount thereof to the applicable Agent
forthwith upon demand, the applicable Lenders ratably in proportion to their
respective Commitment Percentages) shall, on demand, pay to such Agent the
amount made available by such Agent, together with interest thereon in respect
of the period commencing on the date such amount was so made available by such
Agent until the date Agent recovers such amount at a rate per annum for such
period equal to (i) in respect of Obligations which are denominated in Dollars,
the Federal Funds Rate and (ii) in respect of Canadian Obligations which are
denominated in Canadian Dollars, the CDOR Rate.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of any
principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or Lien granted under Section 9.2 hereof),
banker's lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored. Each
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the Loans
made, or Reimbursement Obligations or other Obligations held, by other Lenders
may exercise all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans, Reimbursement Obligations or other Obligations in the
amount of such participation. Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Borrower.
5. Conditions Precedent.
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender or each Issuer to make its initial Loans or issue or
participate in the initial Letter of Credit hereunder or to accept and purchase
its initial Bankers' Acceptance hereunder (whichever shall first
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occur) is subject to the following conditions precedent, each of which shall
have been fulfilled or waived to the satisfaction of Agents:
(a) Authorization and Status. Agents shall have received (i) copies of
the Organizational Documents of each Obligor certified as true and correct by
its secretary, assistant secretary or other equivalent officer, (ii) evidence
reasonably satisfactory to Agents of all action taken by each Obligor
authorizing the execution, delivery and performance of the Loan Documents and
all other documents related to this Agreement to which it is a party
(including, without limitation, a certificate of the secretary, assistant
secretary or other equivalent officer of each such party which is a corporation
setting forth the resolutions of its Board of Directors authorizing the
transactions contemplated thereby), and (iii) such certificates as may be
appropriate to demonstrate the qualification and good standing of each Obligor
in the jurisdiction of its organization and in each other jurisdiction where
the failure in which to qualify could reasonably be expected to have a Material
Adverse Effect.
(b) Incumbency. Each Obligor shall have delivered to Agents a
certificate in respect of the name and signature of each of the officers (i)
who is authorized to sign on its behalf the applicable Loan Documents to which
it is a party related to any Loan, the issuance of any Letter of Credit or the
acceptance of any Bankers' Acceptance and (ii) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with any Loan, the issuance of any Letter of
Credit or the acceptance of any Bankers' Acceptance. Each Agent and each Lender
may conclusively rely on such certificates until they receive notice in writing
from the applicable Obligor to the contrary.
(c) Notes. Agents shall have received the appropriate Notes of
Borrowers for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and
delivered the Loan Documents to which it is a party (in such number of copies
as Agents shall have requested). Each such Loan Document shall be in
substantially the form furnished to the Lenders prior to their execution of
this Agreement, together with such changes therein as Agents may approve.
(e) Security Matters. All such action as Agents shall have requested
to perfect the Liens created pursuant to the Security Documents which are in
effect as of the Effective Date shall have been taken, including, without
limitation, where applicable, the filing and recording of the Security
Documents with the appropriate Governmental Authorities. Agent shall also have
received evidence satisfactory to it that the Liens created by the Security
Documents constitute first priority Liens, except for the exceptions expressly
provided for herein or therein, including, without limitation, delivery of all
applicable stock certificates (with stock powers executed in blank), Uniform
Commercial Code search reports and other applicable personal property registry
reports, satisfactory title evidence in form and substance acceptable to Agent,
and executed releases of any prior Liens (except as permitted by Section 8.2).
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(f) Fees and Expenses. Borrowers shall have paid to Agents all unpaid
fees in the amounts previously agreed upon in writing between any Borrower and
any Agent.
(g) Insurance. Borrowers shall have delivered to Agents certificates
of insurance satisfactory to Agents evidencing the existence of all insurance
required to be maintained by each Obligor by this Agreement and the Security
Documents.
(h) Opinions of Counsel. Agents shall have received such opinions of
counsel to Obligors as Agents shall reasonably request with respect to Obligors
and the Loan Documents.
(i) Consents. Agents shall have received evidence satisfactory to the
Majority Lenders that all material consents of each Governmental Authority and
of each other Person, if any, reasonably required in connection with (a) the
Loans, Letters of Credit and Bankers' Acceptances and (b) the execution,
delivery and performance of this Agreement and the other Loan Documents have
been satisfactorily obtained.
(j) Key Agreements. Agents shall have received copies of the Key
Agreements, in Proper Form, and, where applicable, shall have received evidence
satisfactory to Agents that the transactions contemplated therein have been
consummated, subject only to the requested funding hereunder. Upon request of
Agents or the Majority Lenders, the copies of any designated Key Agreements
shall be certified as true, correct and complete by the applicable Borrower.
(k) Payment of Certain Outstanding Indebtedness. Agents shall have
received evidence satisfactory to Agents that all existing Indebtedness owing
under the credit facility previously provided to Canadian Borrower by BNS shall
have been paid in full (or will be paid in full out of the initial advance
hereunder) and that all rights to further advances under such facility shall
have been terminated.
(l) Purchase Agreement. Agents shall have received evidence
satisfactory to the Majority Lenders that, concurrently with the initial
advance made hereunder, the acquisition contemplated by the Purchase Agreement
shall be consummated.
(m) Merger of NATCO Holdings. Agents shall have received evidence
satisfactory to the Majority Lenders that NATCO Holdings, Inc., a Delaware
corporation, shall have been merged into Group.
(n) Equity. Borrower shall have received not less than $5,250,000 in
net proceeds from the sale of equity interests in Borrower.
(o) Other Documents. Agents shall have received such other documents
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agents may reasonably request.
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5.2 All Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender to make any Loan to be made by it hereunder or to
issue or participate in any Letter of Credit or to accept and purchase any
Bankers' Acceptance is subject to (a) the accuracy, in all material respects,
on the date of such Loan or such issuance or such acceptance and purchase of
all representations and warranties of each Obligor contained in this Agreement
and the other Loan Documents; (b) the applicable Agent shall have received the
following, all of which shall be duly executed and in Proper Form: (1) a
Request for Extension of Credit as to the Loan, Letter of Credit or Bankers'
Acceptance, as the case may be, by the time and on the Business Day specified
under Section 4.3 hereof, (2) in the case of a Letter of Credit, an
Application, and (3) such other documents as the applicable Agent may
reasonably require; (c) prior to the making of such Loan or the issuance of
such Letter of Credit or the acceptance and purchase of such Bankers'
Acceptance, there shall have occurred no event which could reasonably be
expected to have a Material Adverse Effect; (d) no Default or Event of Default
shall have occurred and be continuing, and (e) the making of such Loan or the
issuance of such Letter of Credit or the acceptance and purchase of such
Bankers' Acceptance shall not be illegal or prohibited by any Legal
Requirement. The submission by any Borrower of a Request for Extension of
Credit shall be deemed to be a representation and warranty that the conditions
precedent to the applicable Loan or Letter of Credit or Bankers' Acceptance
have been satisfied.
6. Representations and Warranties.
To induce Agents, the Issuers and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit and accept and purchase Bankers' Acceptances, U.S. Borrower and Canadian
Borrower each represents and warrants (such representations and warranties to
survive any investigation and the making of the Loans and the issuance of any
Letters of Credit and the acceptance and purchase of any Bankers' Acceptances)
to the Lenders, Issuers and Agents as follows:
6.1 Organization. Each Obligor (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization;
(b) has all necessary power and authority to conduct its business as presently
conducted, and (c) is duly qualified to do business and in good standing in the
jurisdiction of its organization and in all jurisdictions in which the failure
to so qualify could reasonably be expected to have a Material Adverse Effect.
6.2 Financial Statements. Borrowers have furnished to Agents (i)
audited consolidated financial statements (including a balance sheet) as to
U.S. Borrower, Canadian Borrower and Group which fairly present in all material
respects, in accordance with GAAP, the consolidated financial condition and the
results of operations of such Persons as at the end of the fiscal year ended
Xxxxx 00, 0000, (xx) audited financial statements (including a balance sheet)
as to The Cynara Company which, to the best knowledge of Borrowers, fairly
present in all material respects, in accordance with GAAP, the consolidated
financial condition and the results of operations of The Cynara Company as at
the end of the fiscal year ended December 31, 1997, (iii) unaudited
consolidating financial statements (including a balance sheet) as to U.S.
Borrower and Canadian Borrower which fairly
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present in all material respects, in accordance with GAAP, the consolidating
financial condition and the results of operations of such Persons, on a
consolidating basis, as at the end of the fiscal year ended March 31, 1998,
(iv) unaudited consolidated financial statements (including a balance sheet) as
to U.S. Borrower, Canadian Borrower and Group which fairly present in all
material respects, in accordance with GAAP, the consolidated financial
condition and the results of operations of such Persons as at the end of the
fiscal quarter ended June 30, 1998 and (v) unaudited financial statements
(including a balance sheet) as to The Cynara Company which, to the best
knowledge of Borrowers, fairly present in all material respects, in accordance
with GAAP, the consolidated financial condition and the results of operations
of The Cynara Company as at the end of the fiscal quarter ended June 30, 1998.
No events, conditions or circumstances have occurred from the date that the
financial statements were delivered to Agent through the Effective Date which
would cause said financial statements to be misleading in any material respect.
Except for the Purchase Agreement, this Agreement and the other Loan Documents,
there are no material instruments or liabilities which should be reflected in
such financial statements provided to Agent which are not so reflected.
6.3 Enforceable Obligations; Authorization. The Loan Documents to
which the applicable Obligors are parties are legal, valid and binding
obligations of each applicable Obligor, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency and other
similar laws and judicial decisions affecting creditors' rights generally and
by general equitable principles. The execution, delivery and performance of the
Loan Documents by the respective Obligors (a) have all been duly authorized by
all necessary action; (b) are within the power and authority of each applicable
Obligor; (c) do not and will not contravene or violate any Legal Requirement
applicable to any applicable Obligor or the Organizational Documents of any
applicable Obligor, the contravention or violation of which could reasonably be
expected to have a Material Adverse Effect; (d) do not and will not result in
the breach of, or constitute a default under, any material agreement or
instrument by which any Obligor or any of its Property may be bound, and (e) do
not and will not result in the creation of any Lien upon any Property of any
Obligor, except in favor of Agents as expressly contemplated herein or therein.
All necessary permits, registrations and consents for such making and
performance have been obtained. Except as otherwise expressly stated in the
Security Documents, the Liens of the Loan Documents will constitute valid and
perfected first and prior Liens on the Property described therein, subject to
no other Liens whatsoever except Permitted Liens.
6.4 Other Debt. No Obligor is in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security
agreement or lease to which it is a party and which default could reasonably be
expected to have a Material Adverse Effect.
6.5 Litigation. There is no litigation or administrative proceeding,
to the knowledge of any executive officer of any Borrower, pending or
threatened against, nor any outstanding judgment, order or decree against, any
Obligor before or by any Governmental Authority which does or could reasonably
be expected to have a Material Adverse Effect. No Obligor is in default with
respect to any judgment, order or decree of any Governmental Authority where
such default could reasonably be expected to have a Material Adverse Effect.
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6.6 Title. Each Obligor has good and marketable title to the
Collateral, if any, pledged (or purported to be pledged) by such Obligor
pursuant to the Security Documents, free and clear of all Liens (except
Permitted Liens).
6.7 Taxes. Each Obligor has filed all tax returns required to have
been filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith
or where the failure to make required filings or pay required taxes could not
reasonably be expected to have a Material Adverse Effect..
6.8 Regulations U and X. None of the proceeds of any Loan or proceeds
from the acceptance and purchase of Bankers' Acceptances will be used for the
purpose of purchasing or carrying directly or indirectly any margin stock or
for any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulations U and X of the Board of Governors of the
Federal Reserve System, as any of them may be amended from time to time.
6.9 Subsidiaries. As of the Effective Date, U.S. Borrower has no
Subsidiaries other than as set forth on Exhibit L hereto. The percentage of the
issued and outstanding equity interests in each applicable Subsidiary which is
owned by U.S. Borrower or one or more of its Subsidiaries is set forth on
Exhibit L hereto.
6.10 No Untrue or Misleading Statements. No document, instrument or
other writing furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated in any Loan Document contains any
untrue material statement of fact or omits to state any such fact necessary to
make the representations, warranties and other statements contained herein or
in such other document, instrument or writing not misleading in any material
respect.
6.11 ERISA. With respect to each Plan, each Borrower and each member
of the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in compliance
in all material respects with the provisions of ERISA and the Code. No event
has occurred which could result in a liability of any Borrower or any member of
the Controlled Group to the PBGC or a Plan (other than to make contributions in
the ordinary course) that could reasonably be expected to have a Material
Adverse Effect. There have not been any nor are there now existing any events
or conditions that would cause the Lien provided under Section 4068 of ERISA to
attach to any Property of any Borrower or any member of the Controlled Group.
The aggregate Unfunded Liabilities in respect of all Plans as of the date
hereof do not exceed $1,000,000. No "prohibited transaction" has occurred with
respect to any Plan.
6.12 Investment Company Act. No Obligor is an investment company
within the meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any Person which
is an investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an "affiliate"
or a "subsidiary company" of a "public utility company," or a "holding
company," or an "affiliate" or a "subsidiary
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company" of a "holding company," as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
6.14 Solvency. None of U.S. Borrower, Canadian Borrower, any other
Obligor, U.S. Borrower and its Subsidiaries, on a consolidated basis, or
Canadian Borrower and its Subsidiaries, on a consolidated basis, is
"insolvent," as such term is used and defined in (i) the Bankruptcy Code and
(ii) the fraudulent conveyance statutes of the State of Texas or of any
jurisdiction in which any of the Collateral may be located.
6.15 Fiscal Year. The fiscal year of each Obligor currently ends on
March 31, but prior to December 31, 1998, the fiscal year end of each of the
Obligors will be changed to December 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.17 Environmental Matters. Each Obligor has, to the best knowledge of
their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain such
permits), the failure to obtain which could reasonably be expected to have a
Material Adverse Effect. Each Obligor and its Properties, business and
operations have been and are, to the best knowledge of their respective
executive officers, in compliance with all applicable Requirements of
Environmental Law and Environmental Permits the failure to comply with which
could reasonably be expected to have a Material Adverse Effect. Each Obligor
and its Properties, business and operations are not subject to any (A)
Environmental Claims or (B), to the best knowledge of their respective
executive officers (after making reasonable inquiry of the personnel and
records of their respective Corporations), Environmental Liabilities, in either
case direct or contingent, arising from or based upon any act, omission, event,
condition or circumstance occurring or existing on or prior to the date hereof
which could reasonably be expected to have a Material Adverse Effect. None of
the officers of any Obligor has received any notice of any violation or alleged
violation of any Requirements of Environmental Law or Environmental Permit or
any Environmental Claim in connection with its Properties, liabilities,
condition (financial or otherwise), business or operations which could
reasonably be expected to have a Material Adverse Effect. Neither U.S. Borrower
nor Canadian Borrower knows of any event or condition with respect to currently
enacted Requirements of Environmental Laws presently scheduled to become
effective in the future with respect to any of the Properties of any Obligor
which could reasonably be expected to have a Material Adverse Effect, for which
the applicable Obligor has not made good faith provisions in its business plan
and projections of financial performance.
6.18 Collateral Covered. As of the Effective Date, the Collateral
covered by the Security Documents constitutes substantially all material
personal Property owned by U.S. Borrower and its Subsidiaries and all of the
issued and outstanding equity interests in all of the Subsidiaries of U.S.
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Borrower owned by U.S. Borrower or any of its Subsidiaries (with the Collateral
being allocated between Canadian Obligations and U.S. Obligations as herein
provided).
7. Affirmative Covenants.
U.S. Borrower and Canadian Borrower each covenants and agrees with
Agents and the Lenders that prior to the termination of this Agreement it will
do or cause to be done, and cause each other Obligor (unless limited by the
language of the applicable provision to less than all of the Obligors) to do or
cause to be done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times, except
where failure or noncompliance could not reasonably be expected to have a
Material Adverse Effect: (a) pay when due all taxes and governmental charges of
every kind upon it or against its income, profits or Property, unless and only
to the extent that the same shall be contested diligently in good faith and
adequate reserves in accordance with GAAP have been established therefor; (b)
do all things necessary to preserve its existence, qualifications, rights and
franchises; (c) comply with all applicable Legal Requirements (including
without limitation Requirements of Environmental Law) in respect of the conduct
of its business and the ownership of its Property; and (d) cause its Property
to be protected, maintained and kept in good repair and make all replacements
and additions to such Property as may be reasonably necessary to conduct its
business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agents and each
Lender each of the following: (a) as soon as available and in any event within
120 days after the end of each applicable fiscal year, beginning with the
fiscal year ending on December 31, 1998, Annual Financial Statements of U.S.
Borrower, Canadian Borrower and Group; (b) as soon as available and in any
event within 45 days after the end of each fiscal quarter of each applicable
fiscal year, Quarterly Financial Statements of U.S. Borrower, Canadian Borrower
and Group; (c) concurrently with the financial statements provided for in
Subsections 7.2(a) and (b) hereof, such schedules, computations and other
information, in reasonable detail, as may be reasonably required by Agents to
demonstrate compliance with the covenants set forth herein or reflecting any
non-compliance therewith as of the applicable date, all certified and signed by
a duly authorized officer of U.S. Borrower as true and correct in all material
respects to the best knowledge of such officer and, commencing with the
quarterly financial statement prepared as of September 30, 1998, a compliance
certificate ("Compliance Certificate") substantially in the form of Exhibit F
hereto, duly executed by such authorized officer; (d) by June 30 of each fiscal
year, U.S. Borrower's and Canadian Borrower's annual business plans for the
next fiscal year (including their proforma balance sheets and income and cash
flow projections for such fiscal year); (e) promptly upon their becoming
publicly available, each financial statement, report, notice or definitive
proxy statements sent by any Obligor to shareholders generally and each regular
or periodic report and each registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed by any
Obligor with, or received by any Obligor in connection therewith from, any
securities exchange or the Securities and Exchange Commission or any successor
agency; (f) (1) as of the Effective Date and (2) within 20 days after (i) the
end of each calendar month or (ii) receipt of a request therefor (which may be
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given from time to time) from any Agent, a U.S. Borrowing Base Certificate and
a Canadian Borrowing Base Certificate as at the Effective Date or the last day
of such calendar month or the date of such receipt, as the case may be,
together with such supporting information as any Agent may reasonably request;
(g) within 30 days after (i) the end of each calendar quarter or (ii) receipt
of a request therefor (which may be given from time to time) from any Agent,
(1) a listing and aging of the Accounts of (x) U.S. Borrower and its
Subsidiaries (other than Canadian Subsidiaries) and (y) the Canadian
Subsidiaries as of the end of the most recently ended calendar month, prepared
in reasonable detail and containing such other information as any Agent may
reasonably request and (2) a summary of the Inventory of (x) U.S. Borrower and
its Subsidiaries (other than Canadian Subsidiaries) and (y) the Canadian
Subsidiaries as of the end of the most recently ended calendar month, prepared
in reasonable detail and containing such other information as any Agent may
reasonably request; (h) from time to time, at any time upon the request of any
Agent, but at the cost of the applicable Borrower, a report of an independent
collateral field examiner approved by Agents in writing and reasonably
acceptable to the applicable Borrower (which may be, or be affiliated with, any
Agent or one of the Lenders) with respect to the Accounts and Inventory
components included in the U.S. Borrowing Base and the Canadian Borrowing Base
(provided, however, that so long as no Event of Default has occurred and is
continuing, Agents shall not require such a report more than once per calendar
year and during the continuance of an Event of Default, Agents shall not
require such a report more than once per calendar quarter), and (i) such other
information relating to the condition (financial or otherwise), operations,
prospects or business of any Obligor as from time to time may be reasonably
requested by any Agent. Each delivery of a financial statement pursuant to this
Section 7.2 shall constitute a restatement of the representations contained in
the last two sentences of Section 6.2.
7.3 Financial Tests. Have and maintain:
(a) Net Worth - Net Worth of not less than (1) at all times
during the period commencing on the Effective Date through and
including September 30, 1998, an amount equal to $32,500,000 and (2)
at all times during each fiscal quarter thereafter, the minimum Net
Worth required as of the end of the immediately preceding fiscal
quarter plus 50% of the net income of U.S. Borrower and its
Subsidiaries, on a consolidated basis (if positive), for the period
from June 30, 1998 through the last day of the fiscal quarter ending
immediately prior to the date of such calculation plus 100% of the net
proceeds realized from the issuance of any equity securities by U.S.
Borrower during that period plus 100% of Net Equity Proceeds received
during that period.
(b) Debt to Capitalization Ratio - a Debt to Capitalization
Ratio of not greater than (1) 60% at all times during the period
commencing on the Effective Date through and including March 31, 1999;
(2) 55% at all times during the period commencing on April 1, 1999
through and including September 30, 1999; (3) 50% at all times during
the period commencing on October 1, 1999 through and including March
31, 2000, and (4) 45% at all times thereafter.
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(c) Fixed Charge Coverage Ratio - a Fixed Charge Coverage
Ratio of not less than 1.25 to 1.00 at all times.
7.4 Inspection. Permit each Agent and each Lender upon 3 days' prior
notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its Property
in a manner consistent with applicable safety requirements and policies of
insurance, to examine its files, books and records, except classified
governmental material, and make and take away copies thereof, and to discuss
its affairs with its officers and accountants, all during normal business hours
and at such intervals and to such extent as any Agent may reasonably desire.
7.5 Further Assurances. Promptly execute and deliver, at the expense
of U.S. Borrower or Canadian Borrower, as the case may be, any and all other
and further instruments which may be reasonably requested by any Agent to cure
any defect in the execution and delivery of any Loan Document in order to
effectuate the transactions contemplated by the Loan Documents, and in order to
grant, preserve, protect and perfect the validity and priority of the Liens
created by the Security Documents.
7.6 Books and Records. Maintain books of record and account which
permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. Maintain insurance on its Property with responsible
companies in such amounts, with such deductibles and against such risks as are
usually carried by owners of similar businesses and Properties in the same
general areas in which the applicable Obligor operates or as any Agent may
otherwise reasonably require, and furnish each Agent satisfactory evidence
thereof promptly upon request. These insurance provisions are cumulative of the
insurance provisions of the Security Documents. Each Agent shall be provided
with a certificate showing coverages provided under the policies of insurance
and such policies shall be endorsed to the effect that they will not be
canceled for nonpayment of premium, reduced or affected in any material manner
without thirty (30) days' prior written notice to Agents.
7.8 Notice of Certain Matters. Give Agents written notice of the
following promptly after any executive officer of U.S. Borrower or Canadian
Borrower shall become aware of the same:
(a) the issuance by any court or governmental agency or authority of
any injunction, order or other restraint prohibiting, or having the effect of
prohibiting, the performance of this Agreement, any other Loan Document, or the
making of the Loans or the acceptance and purchase of Bankers' Acceptances or
the initiation of any litigation, or any claim or controversy which would
reasonably be expected to result in the initiation of any litigation, seeking
any such injunction, order or other restraint;
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(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims in excess of $500,000 or which could reasonably be
expected to result in a Default hereunder; and
(c) any Event of Default or Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with the respect
thereto.
Borrowers will also notify Agents in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and
records. After the Effective Date, Borrowers will notify Agents in writing at
least 45 days prior to any Borrower's or any of their Subsidiaries' (other than
Foreign Subsidiaries which are not Canadian Subsidiaries) acquisition of any
real Property or any material personal Property having aggregate fair market
value in excess of $2,500,000, wherever located, other than the Collateral
covered by the Security Documents (such acquisition or ownership being herein
called an "Additional Collateral Event" and the Property so acquired or owned
being herein called "Additional Collateral"). The occurrence of an Event of
Default shall constitute an Additional Collateral Event in respect of which the
Additional Collateral shall be all real and personal Property of Borrowers and
their Subsidiaries which is not already covered by a Security Document.
7.9 Capital Adequacy. If any Lender shall have determined that the
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation
or treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section, after demand by such Lender
(with a copy to the appropriate Agent) as provided below, pay (subject to
Sections 11.7 and 11.17 hereof) to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. The certificate of
any Lender setting forth such amount or amounts as shall be necessary to
compensate it and the basis thereof and reasons therefor shall be delivered as
soon as practicable to U.S. Borrower or Canadian Borrower, as the case may be,
and shall be conclusive and binding, absent manifest error. U.S. Borrower or
Canadian Borrower, as the case may be, shall pay the amount shown as due on any
such certificate within fifteen (15) Business Days after the delivery of such
certificate. In preparing such certificate, a Lender may employ such
assumptions and allocations of costs and expenses as it shall in good xxxxx
xxxx reasonable and may use any reasonable averaging and attribution method.
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7.10 ERISA Information and Compliance. Promptly furnish to Agents: (i)
immediately upon receipt, a copy of any notice of complete or partial
withdrawal liability under Title IV of ERISA and any notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, (ii) if requested by any Agent, promptly after the filing thereof
with the United States Secretary of Labor or the PBGC or the Internal Revenue
Service or any Governmental Authority having jurisdiction under Applicable
Canadian Pension Legislation, copies of each annual and other report or other
information return with respect to each Plan or any trust created thereunder,
(iii) immediately upon becoming aware of the occurrence of any "reportable
event," as such term is defined in Section 4043 of ERISA, for which the
disclosure requirements of Regulation Section 2615.3 promulgated by the PBGC
have not been waived, or of any "prohibited transaction," as such term is
defined in Section 4975 of the Code, in connection with any Plan or any trust
created thereunder, a written notice signed by an authorized officer of the
applicable Borrower or the applicable member of the Controlled Group specifying
the nature thereof, what action the applicable Borrower or the applicable
member of the Controlled Group is taking or proposes to take with respect
thereto, and, when known, any action taken by the PBGC, the Internal Revenue
Service, the Department of Labor or any other applicable Governmental Authority
with respect thereto, (iv) promptly after the filing or receiving thereof by
any Borrower or any member of the Controlled Group of any notice of the
institution of any proceedings or other actions which may result in the
termination of any Plan, in whole or in part, and (v) each request for waiver
of the funding standards or extension of the amortization periods required by
Sections 303 and 304 of ERISA or Section 412 of the Code promptly after the
request is submitted by any Borrower or any member of the Controlled Group to
the Secretary of the Treasury, the Department of Labor, the Internal Revenue
Service or any other applicable Governmental Authority. To the extent required
under applicable statutory funding requirements, each Borrower will fund, or
will cause the applicable member of the Controlled Group to fund, all current
service pension liabilities as they are incurred under the provisions of all
Plans from time to time in effect and, in addition, with respect to Plans
governed by Applicable Canadian Pension Legislation, all special payments in
connection with solvency deficiencies or going concern Unfunded Liabilities,
and comply with all applicable provisions of ERISA, in each case, except to the
extent that failure to do the same could not reasonably be expected to have a
Material Adverse Effect. Each Borrower covenants that it shall and shall cause
each member of the Controlled Group to (1) make contributions to each Plan in a
timely manner and in an amount sufficient to comply with the contribution
obligations under such Plan and the minimum funding standards requirements of
ERISA; (2) prepare and file in a timely manner all notices and reports required
under the terms of ERISA including but not limited to annual reports; and (3)
pay in a timely manner all required PBGC premiums, in each case, except to the
extent that failure to do the same could not reasonably be expected to have a
Material Adverse Effect.
7.11 Additional Security Documents. As soon as practicable and in any
event within 30 days after an Additional Collateral Event, Borrowers shall (a)
execute and deliver or cause to be executed and delivered Security Documents,
in Proper Form, in favor of the applicable Agent and duly executed by the
applicable Obligor, granting a first-priority Lien (except for Permitted Liens
and except for Liens securing the EXIM Facility covering the "International
Collateral", as such term is defined in the Security Agreements) upon the
applicable Additional Collateral securing all of the
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Canadian Obligations (in the case of Canadian Subsidiaries) or the U.S.
Obligations (in the case of U.S. Borrower and its Subsidiaries which are not
Foreign Subsidiaries), except as Agents may otherwise agree in order to limit
recording taxes or similar charges based upon the amount secured, and such
other documents (including, without limitation, all items reasonably required
by Agents in connection with the applicable Security Documents previously
executed hereunder, all in Proper Form) as may be reasonably required by Agents
in connection with the execution and delivery of such Security Documents; (b)
deliver or cause to be delivered such other documents or certificates
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agents may reasonably request, and (c) pay in full all
documentary stamps, filing and recording fees, taxes and other fees and charges
payable in connection with the filing and recording of any such Security
Document.
7.12 Year 2000. Any reprogramming or testing required to permit the
proper functioning, in and following the year 2000, of (i) each Obligors's
computer systems, to the extent such systems are material to the conduct of any
Obligor's business and (ii) equipment owned by any of the Obligors and
containing embedded microchips (including systems and equipment supplied by
others or with which any Obligor's systems interface), to the extent the proper
functioning of such equipment owned by any of the Obligors is material to the
conduct of any Obligor's business, will be completed in all material respects
by September 30, 1999, to the extent failure to do so would reasonably be
expected to have a Material Adverse Effect. The cost to Obligors of such
reprogramming and testing and of reasonably foreseeable consequences of year
2000 to Obligors (including, without limitation, reprogramming errors and
failure of others' systems or equipment) will not result in an Event of Default
and could not reasonably be expected to have a Material Adverse Effect. Except
for such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management systems of Obligors are and, with
ordinary course upgrading and maintenance, will continue for the term of this
Agreement to be, sufficient to permit Obligors to conduct their business
without a Material Adverse Effect.
8. Negative Covenants.
U.S. Borrower and Canadian Borrower each covenants and agrees with
Agents and the Lenders that prior to the termination of this Agreement it will
not, and will not suffer or permit any of their Subsidiaries to, do any of the
following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit to
exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a)
Indebtedness under this Agreement and the other Loan Documents and Indebtedness
secured by Liens permitted by Section 8.2 hereof; (b) the liabilities existing
on the date of this Agreement and disclosed in the financial statements
delivered on or prior to the Effective Date pursuant to Section 6.2 hereof, and
subject to Section 8.10 hereof, all renewals, extensions and replacements (but
not increases) of any of the foregoing; (c) the Interest Rate Risk
Indebtedness; (d) purchase money Indebtedness to acquire Equipment obtained by
U.S. Borrower or any of its Subsidiaries in the
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ordinary course of business not exceeding $3,000,000 at any one time
outstanding, in the aggregate for all such Indebtedness; (e) Subordinated
Indebtedness; (f) Indebtedness of U.S. Borrower and its Subsidiaries under the
EXIM Facility; (g) Indebtedness created under leases which, in accordance with
GAAP have been recorded or should be recorded as capital leases, in an
aggregate amount not to exceed $1,000,000 at any one time outstanding; (h)
pre-existing Indebtedness, not to exceed $2,000,000 in the aggregate at any one
time outstanding, of Subsidiaries of U.S. Borrower which are acquired after the
date hereof (provided, however, that no such Indebtedness was incurred at the
instigation of U.S. Borrower in contemplation of the acquisition of such
Subsidiary), and (i) without limitation of any other part of this Section,
Indebtedness of U.S. Borrower or any of its Subsidiaries created, incurred or
assumed after the Effective Date, in an aggregate amount not to exceed $500,000
at any one time outstanding.
8.2 Liens. Create or suffer to exist any Lien upon any of its Property
now owned or hereafter acquired, or acquire any Property upon any conditional
sale or other title retention device or arrangement or any purchase money
security agreement; or in any manner directly or indirectly sell, assign,
pledge or otherwise transfer any of its Accounts or General Intangibles;
except: (a) Liens created pursuant to any Loan Document; (b) Permitted Liens;
(c) Liens upon "International Collateral" (as defined in the EXIM Facility)
securing the EXIM Facility, (d) other Liens securing the EXIM Facility which
are subordinate and inferior to the Liens created pursuant to the Loan
Documents; (e) pre-existing Liens securing pre-existing Indebtedness permitted
under Section 8.1(h) hereof covering Property of the applicable Subsidiary of
U.S. Borrower acquired after the date hereof (provided, however, that no such
Liens were created and no such Indebtedness was incurred at the instigation of
U.S. Borrower in contemplation of the acquisition of such Subsidiary); (f)
Liens evidenced by capital leases permitted hereunder, and (g) a Lien on cash
of Borrower or a Subsidiary of Borrower in an amount not exceeding $300,000
securing an existing $262,000 letter of credit issued by Bank One, Texas, N.A.
in respect of which Borrower or a Subsidiary of Borrower is the applicant.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agents in the financial statements delivered on or
prior to the Effective Date pursuant to Section 6.2 hereof (and all renewals,
extensions and replacements--but not increases--of such obligations after the
Effective Date), (c) those liabilities permitted under Sections 8.1 or 8.2
hereof, (d) accounts payable incurred in the ordinary course of business and
(e) other contingent liabilities not exceeding $1,000,000 at any one time
outstanding.
8.4 Mergers, Consolidations and Dispositions of Assets. In any single
transaction or series of transactions, directly or indirectly:
(a) liquidate or dissolve; provided that any Subsidiary of U.S.
Borrower may liquidate, dissolve or take action to wind-up
its operations if (i) U.S. Borrower determines such
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action to be in the best interests of U.S. Borrower and its
Subsidiaries, (ii) liquidating dividends are paid to U.S.
Borrower or to a wholly-owned Subsidiary of U.S. Borrower,
and (iii) U.S. Borrower gives Agents written notice of such
action at least thirty (30) days prior to taking such action;
(b) be a party to any merger or consolidation unless and so long
as (i) no Default or Event of Default has occurred that is
then continuing, (ii) immediately thereafter and giving
effect thereto, no event will occur and be continuing which
constitutes a Default, (iii) an Obligor is the surviving
Person; (iv) the surviving Person ratifies and assumes each
Loan Document to which any party to such merger was a party,
and (v) Agents are given at least 30 days' prior written
notice of such merger or consolidation;
(c) sell, convey or lease all or any part of its assets, except
for (i) sales of Inventory in the ordinary course of
business, (ii) sales of other Property in the ordinary course
of business, (iii) sales or other dispositions of Property
not constituting Inventory or other Collateral in the
ordinary course of business; (iv) sales or other dispositions
of Property not constituting Collateral outside the ordinary
course of business; provided the fair market value of all
such Property does not exceed $1,000,000 during any fiscal
year; (v) sales or other dispositions of Property (whether or
not Collateral) expressly permitted by the other terms of
this Agreement or any Loan Document, (vi) the sale or other
disposition of the Property described on Exhibit K hereto and
(vii) subject to the Borrowers' compliance with Section
3.2(b), dispositions occurring as the result of a casualty
event or condemnation; provided, however, that, unless the
Majority Lenders shall have otherwise consented in writing,
the net proceeds realized from such sales or dispositions
permitted under subclauses (iii), (iv), (v) and (vi) of this
clause (c) must, within ninety (90) days after the applicable
sale or disposition, either (I) be used to make a prepayment
on the Term Loans pro rata based on their outstanding
principal balances (with such payments to be credited to
installments in inverse order of their maturity) or (II) be
reinvested in assets that may be productively used in the
business of U.S. Borrower or the applicable Subsidiary of
U.S. Borrower, or
(d) except for Liens in favor of Agents, pledge, transfer or
otherwise dispose of any equity interest in any of U.S.
Borrower's Subsidiaries or any Indebtedness of any of U.S.
Borrower's Subsidiaries or issue or permit any Subsidiary of
U.S. Borrower to issue any additional equity interest other
than stock dividends subject to a Lien in favor of Agents.
8.5 Redemption, Dividends and Distributions. At any time: (a) redeem,
retire or otherwise acquire, directly or indirectly, any equity interest in any
Obligor or (b) make any distributions of any Property or cash to the owner of
any of the equity interests in any Obligor other than Permitted Dividends and
Permitted Investments.
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8.6 Nature of Business. Change the nature of its business or enter
into any business which is substantially different from the business in which
it is presently engaged.
8.7 Transactions with Related Parties. Enter into any transaction or
agreement with any officer, director or holder of any equity interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources (to the
best knowledge of Borrowers, after making reasonable inquiry).
8.8 Loans and Investments. Make any loan, advance, extension of credit
or capital contribution to, or make or, except as permitted by Sections 8.4 or
8.9 hereof, have any Investment in, any Person, or make any commitment to make
any such extension of credit or Investment, except (a) Permitted Investments;
(b) normal and reasonable advances in the ordinary course of business to
officers and employees; (c) accounts receivable and accounts payable arising in
the ordinary course of business; (d) deposits in money market funds investing
exclusively in Permitted Investments; (e) Investments disclosed in the
financial statements delivered pursuant to Section 6.1; (f) routine advances by
any Obligor to another Obligor (or any Subsidiary of an Obligor) in the
ordinary course of business other than Investments, not to exceed $1,000,000 in
the aggregate at any time; (g) Investments by any Obligor in any other Obligor
which is not a Foreign Subsidiary, and (h) other Investments not to exceed
$2,500,000 in the aggregate at any time.
8.9 Subsidiaries. Form, create or acquire any Subsidiary, except that
U.S. Borrower (or any of its Subsidiaries) may form, create or acquire a
wholly-owned Subsidiary so long as (a) immediately thereafter and giving effect
thereto, no event will occur and be continuing which constitutes a Default; (b)
if such Subsidiary is not a Foreign Subsidiary, (1) such Subsidiary shall
execute and deliver to each Agent a Guaranty in substantially the same form as
the Guaranties executed concurrently herewith, (2) such Subsidiary shall
execute and deliver to U.S. Agent such Security Documents as U.S. Agent may
reasonably require in order to create a valid, perfected, first priority Lien
upon all of the real and personal Property of such Subsidiary (subject to
exceptions set forth in this Agreement) securing the U.S. Obligations and (3)
the applicable owner(s) of the equity interests in such Subsidiary shall
execute and deliver to U.S. Agent such Security Documents as U.S. Agent may
reasonably require in order to create a valid, perfected, first priority Lien
upon all of the issued and outstanding equity interests in such Subsidiary; (c)
if such Subsidiary is a Foreign Subsidiary and is not a wholly-owned direct
Subsidiary of another Foreign Subsidiary, the applicable owner(s) of the equity
interests in such Subsidiary shall execute and deliver to U.S. Agent such
Security Documents as U.S. Agent may reasonably require in order to create a
valid, perfected, first priority Lien upon 65% of the issued and outstanding
equity interests in such Subsidiary and shall execute and deliver to Canadian
Agent such Security Documents as Canadian Agent may reasonably require in order
to create a valid, perfected, first priority Lien upon the remaining 35% of the
issued and outstanding equity interests in such Subsidiary; (d) if such
Subsidiary is a Canadian Subsidiary, (1) such Subsidiary shall execute and
deliver to Canadian Agent a Guaranty in substantially the same form as the
Guaranties executed concurrently herewith in favor of Canadian Agent and (2)
such Subsidiary shall execute and deliver to Canadian Agent such Security
Documents as Canadian Agent may reasonably require in order to create a valid,
perfected, first priority Lien upon all of the real and
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personal Property of such Subsidiary (subject to exceptions set forth in this
Agreement) securing the Canadian Obligations, and (e) Agents are given at least
30 days' prior written notice of such formation, creation or acquisition.
Notwithstanding the foregoing, no Foreign Subsidiary may form, create or
acquire a Subsidiary which is not a Foreign Subsidiary.
8.10 Key Agreements. Terminate or agree to the termination of any Key
Agreement or amend, modify or obtain or grant a waiver of any provision of any
of the Key Agreements if such action could reasonably be expected to have a
Material Adverse Effect (provided that no consent of any Agent or any Bank
shall be required with respect to an amendment of the EXIM Facility which has
the sole effect of increasing the EXIM Facility to an amount not greater than
$10,000,000).
8.11 Organizational Documents. Amend, modify, restate or supplement
any of its Organizational Documents if such action could reasonably be expected
to have a Material Adverse Effect.
8.12 Unfunded Liabilities. Incur any Unfunded Liabilities after the
Effective Date or allow any Unfunded Liabilities in excess of $1,000,000, in
the aggregate, to arise or exist.
8.13 Operating Lease Expenses. Aggregate operating lease expenses
(excluding lease payments under capital leases) shall not exceed, for U.S.
Borrower and its Subsidiaries, in the aggregate in any fiscal year, $5,000,000.
8.14 Sale/Leasebacks. U.S. Borrower will not (and will not permit any
of its Subsidiaries to) enter into any sale/leaseback transactions after the
date hereof without the prior written consent of the Majority Lenders. Without
limiting the foregoing, any leasehold estate acquired pursuant to a permitted
sale/leaseback shall constitute Additional Collateral, and the closing of such
sale/leaseback transaction shall constitute an Additional Collateral Event, for
all purposes hereunder.
8.15 Subordinated Indebtedness. Except as expressly permitted in
writing by the Majority Lenders, Borrowers will not amend, modify or obtain or
grant a waiver of any provision of any document or instrument evidencing any
Subordinated Indebtedness or purchase, redeem, retire or otherwise acquire for
value, deposit any monies with any Person with respect to or make any payment
or prepayment of the principal of or any other amount owing in respect of, any
Subordinated Indebtedness.
8.16 Acquisitions. Acquire any real Property or any material personal
Property after the Effective Date with respect to which the aggregate cash
consideration (exclusive of consideration paid in equity and net of additional
equity contributions made to Group by any of its shareholders which is
restricted to be used for the applicable acquisition in a manner satisfactory
to Agents) for a single transaction would exceed $10,000,000.
8.17 Negative Pledges. Except for (a) any of the Loan Documents, (b)
the EXIM Facility, (c) agreements permitted by Section 8.1(g) but only with
respect to the Property subject to the Lien
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permitted thereby; (d) customary provisions in leases, licenses, asset sale
agreements and other customary agreements not related to the Borrowed Money
Indebtedness and entered into in the ordinary course of business, and (e)
restrictions imposed by agreements governing Permitted Liens, enter into any
agreement or contract which limits or restricts in any way the granting of
Liens by U.S. Borrower or any of its Subsidiaries securing any of the
Obligations.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then either Agent may (and at
the direction of the Majority Lenders, shall) do any or all of the following:
(1) without notice to U.S. Borrower, Canadian Borrower or any other Person,
declare the U.S. Commitments and the Canadian Commitments terminated (whereupon
the Commitments shall be terminated) and/or accelerate the Termination Date to
a date as early as the date of termination of the U.S. Commitments and the
Canadian Commitments; (2) terminate any Letter of Credit allowing for such
termination, by sending a notice of termination as provided therein and require
the applicable Borrower to provide Cover for outstanding Letters of Credit; (3)
declare the principal amount then outstanding of and the unpaid accrued
interest on the Loans and Reimbursement Obligations and all fees and all other
amounts payable hereunder, under the Notes and under the other Loan Documents
to be forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate), presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by U.S. Borrower and Canadian Borrower; provided that in the
case of the occurrence of an Event of Default with respect to any Obligor
referred to in clause (f), (g) or (h) of this Section 9.1, the U.S. Commitments
and the Canadian Commitments shall be automatically terminated and the
principal amount then outstanding of and unpaid accrued interest on the Loans
and the Reimbursement Obligations and all fees and all other amounts payable
hereunder, under the Notes and under the other Loan Documents shall be and
become automatically and immediately due and payable, without notice
(including, without limitation, notice of acceleration and notice of intent to
accelerate), presentment, demand, protest or other formalities of any kind, all
of which are hereby expressly waived by U.S. Borrower and Canadian Borrower,
and (4) exercise any or all other rights and remedies available to any Agent or
any Lenders under the Loan Documents, at law or in equity:
(a) Payments - (i) any Obligor shall fail to make any payment
or required prepayment of any installment of principal on the Loans or
any Reimbursement Obligation payable under the Notes, this Agreement
or the other Loan Documents when due or (ii) any Obligor fails to make
any payment or required payment of interest with respect to the Loans,
any Reimbursement Obligation or any other fee or amount under the
Notes, this Agreement or the other Loan Documents when due and, in the
case of clause (ii) only, such failure to pay continues unremedied for
a period of five days; or
(b) Other Obligations - any Obligor shall default in the
payment when due of any principal of or interest on any Indebtedness
having an outstanding principal amount of at
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least $3,000,000 (other than the Loans and Reimbursement Obligations)
and such default shall continue beyond any applicable period of grace
and shall give rise to a right on the part of the holder of such
Indebtedness to accelerate such Indebtedness; or any event or
condition shall occur which results in the acceleration of the
maturity of any such Indebtedness or enables (or, with the giving of
notice or lapse of time or both, would enable) the holder of any such
Indebtedness or any Person acting on such holder's behalf to
accelerate the maturity thereof and such event or condition shall not
be cured within any applicable period of grace; or
(c) Representations and Warranties - any representation or
warranty made or deemed made by or on behalf of any Obligor in this
Agreement or any other Loan Document or in any certificate furnished
or made by any Obligor to Agents or the Lenders in connection herewith
or therewith shall prove to have been incorrect, false or misleading
in any material respect as of the date thereof or as of the date as of
which the facts therein set forth were stated or certified or deemed
stated or certified; or
(d) Affirmative Covenants - (i) default shall be made in the
due observance or performance of any of the covenants or agreements
contained in Section 7.3 hereof or (ii) default is made in the due
observance or performance of any of the other covenants and agreements
contained in Section 7 hereof or any other affirmative covenant of any
Obligor contained in this Agreement or any other Loan Document and
such default continues unremedied for a period of 30 days after (x)
notice thereof is given by any Agent to U.S. Borrower or to Canadian
Borrower or (y) such default otherwise becomes known to any executive
officer of U.S. Borrower or to Canadian Borrower, whichever is
earlier; or
(e) Negative Covenants - default is made in the due
observance or performance by U.S. Borrower or Canadian Borrower of any
of the other covenants or agreements contained in Section 8 of this
Agreement or of any other negative covenant of any Obligor contained
in this Agreement or any other Loan Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a
receiver, receiver-manager, interim receiver, monitor, conservator,
liquidator or trustee of any Obligor or of any of its Property is
appointed by the order or decree of any court or agency or supervisory
authority having jurisdiction, and such decree or order remains in
effect for more than 90 days; or any Obligor is adjudicated bankrupt
or insolvent; or any of such Person's Property is sequestered by court
order and such order remains in effect for more than 90 days; or a
petition is filed against any Obligor under any state or federal
bankruptcy, reorganization, arrangement, insolvency, readjustment or
debt, dissolution, liquidation or receivership law or any
jurisdiction, whether now or hereafter in effect, and is not dismissed
within 90 days after such filing; or
(g) Voluntary Petitions or Consents - any Obligor commences a
voluntary case or other proceeding or order seeking liquidation,
reorganization, arrangement, insolvency,
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readjustment of debt, dissolution, liquidation or other relief with
respect to itself or its debts or other liabilities under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its Property, or consents to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or
other proceeding commenced against it, or fails generally to, or
cannot, pay its debts generally as they become due or takes any
corporate action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - any Obligor makes an assignment for the benefit of its
creditors, or admits in writing its insolvency (including any
admission of its inability to pay its debts generally as they become
due), or consents to the appointment of a receiver, receiver-manager,
interim receiver, monitor, trustee, or liquidator of such Obligor or
of all or any substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable judgment
or judgments for the payment of money exceeding, in the aggregate,
$1,000,000 (exclusive of amounts covered by insurance) is rendered by
any court or other governmental body against any Obligor and such
Obligor does not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof
within 30 days from the date of entry thereof; or
(j) Security Documents - any Security Document after delivery
thereof, shall for any reason, except to the extent permitted by the
terms of this Agreement or such Security Document, ceases to create a
valid and perfected Lien of the first priority (subject to the
Permitted Liens), required thereby on any of the Collateral
individually or in the aggregate having a fair market value in excess
of $1,000,000 purported to be covered thereby and securing that
portion of the Obligations which is therein designated as being
secured, or any Obligor (or any other Person who may have granted or
purported to grant such Lien) will so state in writing or, after the
creation thereof as herein provided, U.S. Agent shall cease to have a
valid, perfected, first priority Lien upon all of the issued and
outstanding equity interests in and to all Subsidiaries (other than
Foreign Subsidiaries) of U.S. Borrower and upon 65% of the issued and
outstanding equity interests in and to Foreign Subsidiaries of U.S.
Borrower securing the U.S. Obligations or, after the creation thereof
as herein provided, Canadian Agent shall cease to have a valid,
perfected, first priority Lien upon the remaining 35% of the issued
and outstanding equity interests in and to Foreign Subsidiaries of
U.S. Borrower securing the Canadian Obligations; or
(k) Ownership Change or Encumbrance - (i) any Person other
than U.S. Borrower shall own any equity interest in any Subsidiary of
U.S. Borrower (other than a 15% equity interest in NATCO Japan Co.,
Inc. currently owned by Persons other than U.S. Borrower) or any
Person other than an Agent shall acquire any Lien on any equity
interest in any Subsidiary of U.S. Borrower (other than a subordinate
Lien in favor of the holder(s) of the
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EXIM Facility); or (ii) Group shall cease to be the beneficial owner,
directly or indirectly, of all of the equity interests in U.S.
Borrower; or (iii) The Capricorn Group (Cap I, II and Affiliates)
shall cease to be the beneficial owners, directly or indirectly, of at
least 20% of the equity interests in Group or any Person shall own,
directly or indirectly, more of the equity interests in Group than The
Capricorn Group (Cap I, II and Affiliates).
(l) Uninsured Loss - any Obligor shall be the subject of any
uninsured or unindemnified casualty losses exceeding, in the
aggregate, $1,000,000 in any fiscal year.
9.2 Right of Setoff. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from
time to time, without notice to any Obligor (any such notice being expressly
waived by U.S. Borrower, Canadian Borrower and the other Obligors), to setoff
and apply any and all deposits, whether general or special, time or demand,
provisional or final (but excluding the funds held in accounts clearly
designated as escrow or trust accounts held by U.S. Borrower, Canadian Borrower
or any other Obligor for the benefit of Persons which are not Affiliates of any
Obligor), whether or not such setoff results in any loss of interest or other
penalty, and including without limitation all certificates of deposit, at any
time held, and any other funds or Property at any time held, and other
Indebtedness at any time owing by such Lender to or for the credit or the
account of U.S. Borrower, Canadian Borrower or any other Obligor against any
and all of the Obligations irrespective of whether or not such Lender or any
Agent will have made any demand under this Agreement, the Notes or any other
Loan Document. Should the right of any Lender to realize funds in any manner
set forth hereinabove be challenged and any application of such funds be
reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to U.S. Borrower or Canadian Borrower or the applicable
other Obligor, as the case may be, pro rata in accordance with their U.S.
Commitments or Canadian Commitments, as the case may be. Each Lender agrees to
promptly notify U.S. Borrower, Canadian Borrower and Agents after any such
setoff and application, provided that the failure to give such notice will not
affect the validity of such setoff and application. The rights of Agents and
the Lenders under this Section are in addition to other rights and remedies
(including without limitation other rights of setoff) which Agents or the
Lenders may have. This Section is subject to the terms and provisions of
Sections 4.5 and 11.7 hereof. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, any amounts realized
under this Section which constitute an asset of any Foreign Subsidiary shall
only be applied to the payment of Canadian Obligations.
9.3 Collateral Account. U.S. Borrower hereby agrees, in addition to
the provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to U.S. Agent an amount in
immediately available funds equal to the then aggregate amount available for
drawings under all outstanding U.S. Letters of Credit, which funds shall be
held by U.S. Agent as Cover. Canadian Borrower hereby agrees, in addition to
the provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to Canadian Agent an amount in
immediately available funds equal to the sum of the then aggregate amount
available for drawings under all
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outstanding Canadian Letters of Credit plus the unpaid principal balance of all
outstanding Bankers' Acceptances, which funds shall be held by Canadian Agent
as Cover.
9.4 Preservation of Security for Letter of Credit Liabilities. In the
event that, following (i) the occurrence of an Event of Default and the
exercise of any rights available to any Agent or any Lender under the Loan
Documents, and (ii) payment in full of the principal amount then outstanding of
and the accrued interest on the Loans and Reimbursement Obligations and fees
and all other amounts payable hereunder and under the Loan Documents and all
other amounts secured by the Security Documents, any Letters of Credit or
Bankers' Acceptances shall remain outstanding and undrawn upon, the applicable
Agent shall be entitled to hold (and each Borrower and each other Obligor
hereby grants and conveys to Agent a security interest in and to) all cash or
other Property ("Proceeds of Remedies") realized or arising out of the exercise
of any rights available under the Loan Documents, at law or in equity,
including, without limitation, the proceeds of any foreclosure, as collateral
for the payment of any amounts due or to become due under or in respect of such
Letters of Credit and/or such Bankers' Acceptances. Such Proceeds of Remedies
shall be held for the ratable benefit of the U.S. Lenders or the Canadian
Lenders, as the case may be. The rights, titles, benefits, privileges, duties
and obligations of the applicable Agent with respect thereto shall be governed
by the terms and provisions of this Agreement and, to the extent not
inconsistent with this Agreement, the applicable Security Documents. The
applicable Agent may, but shall have no obligation to, invest any such Proceeds
of Remedies in such manner as such Agent, in the exercise of its sole
discretion, deems appropriate. Such Proceeds of Remedies shall be applied to
Reimbursement Obligations arising in respect of any such Letters of Credit, the
payment of any Lender's obligations under any such Letter of Credit and/or the
Obligations relating to any such Bankers' Acceptance when such Letter of Credit
is drawn upon or such Bankers' Acceptance matures, as the case may be. Nothing
in this Section shall cause or permit an increase in the maximum amount of the
Obligations permitted to be outstanding from time to time under this Agreement.
Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, any amounts realized under this Section which constitute
an asset of any Foreign Subsidiary or which arise out of any voluntary Lien
upon equity interests in any Foreign Subsidiary other than the 65% of such
equity interests which is pledged as security for the U.S. Obligations shall
only be applied to the payment of Canadian Obligations.
9.5 Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Canadian Lenders hereunder, the Canadian Lenders shall
be entitled to convert, with two (2) Business Days' prior notice to Canadian
Borrower, any and all or any part of the then unpaid and outstanding LIBOR
Borrowings and Base Rate Borrowings of the Canadian Borrower to Canadian Prime
Loans. Any such conversion shall be calculated so that the resulting Canadian
Prime Loans shall be the equivalent on the date of conversion of the amount of
Dollars so converted. Any accrued and unpaid interest denominated in Dollars at
the time of any such conversion shall be similarly converted to Canadian
Dollars, and such Canadian Prime Loans and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.
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9.6 Remedies Cumulative. No remedy, right or power conferred upon any
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
10. Agents.
10.1 Appointment, Powers and Immunities. Each U.S. Lender hereby
irrevocably appoints and authorizes U.S. Agent to act as its agent hereunder,
under the U.S. Letters of Credit and under the other Loan Documents with such
powers as are specifically delegated to U.S. Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental thereto.
Each Canadian Lender hereby irrevocably appoints and authorizes Canadian Agent
to act as its agent hereunder, under the Canadian Letters of Credit and under
the other Loan Documents with such powers as are specifically delegated to
Canadian Agent by the terms hereof and thereof, together with such other powers
as are reasonably incidental thereto. Any Loan Documents executed in favor of
any Agent shall be held by such Agent for the ratable benefit of the applicable
Lenders. None of the Agents ("Agents" as used in this Section 10 shall include
reference to their Affiliates and their own and their Affiliates' respective
officers, shareholders, directors, employees and agents) (a) shall have any
duties or responsibilities except those expressly set forth in this Agreement,
the Letters of Credit, and the other Loan Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee or fiduciary for any
Lender; (b) shall be responsible to any Lender for any recitals, statements,
representations or warranties contained in this Agreement, the Letters of
Credit or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, the Letters of Credit or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or sufficiency
of this Agreement, the Letters of Credit, or any other Loan Document or any
other document referred to or provided for herein or therein or any Property
covered thereby or for any failure by any Obligor or any other Person to
perform any of its obligations hereunder or thereunder, or shall have any duty
to inquire into or pass upon any of the foregoing matters; (c) shall be
required to initiate or conduct any litigation or collection proceedings
hereunder or under the Letters of Credit or any other Loan Document except to
the extent requested and adequately indemnified by the Majority Lenders; (d)
shall be responsible for any mistake of law or fact or any action taken or
omitted to be taken by it hereunder or under the Letters or Credit or any other
Loan Document or any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, including, without
limitation, pursuant to its own negligence, except for its own gross negligence
or willful misconduct; (e) shall be bound by or obliged to recognize any
agreement among or between any Borrower and any Lender to which such Agent is
not a party, regardless of whether such Agent has knowledge of the existence of
any such agreement or the terms and provisions thereof; (f) shall be charged
with notice or knowledge of any fact or information not herein set out or
provided to such Agent in accordance with the terms of this Agreement or any
other Loan Document; (g) shall be responsible for any delay, error, omission or
default of any mail, telegraph, cable or wireless agency or operator, and (h)
shall be responsible for the acts or edicts of any Governmental Authority. Any
Agent may employ agents
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and attorneys-in-fact and none of the Agents shall be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Without in any way limiting any of the foregoing, each
Lender acknowledges that none of the Agents (nor any Issuer) shall have greater
responsibility in the operation of the Letters of Credit than is specified in
the Uniform Customs and Practice for Documentary Credits (1993 Revision,
International Chamber of Commerce Publication No. 500). In any foreclosure
proceeding concerning any Collateral, each holder of an Obligation if bidding
for its own account or for its own account and the accounts of other Lenders is
prohibited from including in the amount of its bid an amount to be applied as a
credit against the Obligations held by it or the Obligations held by the other
Lenders; instead, such holder must bid in cash only. However, in any such
foreclosure proceeding, (i) U.S. Agent may (but shall not be obligated to)
submit a bid for all U.S. Lenders (including itself) in the form of a credit
against the U.S. Obligations, and U.S. Agent or its designee may (but shall not
be obligated to) accept title to such collateral for and on behalf of all U.S.
Lenders and (ii) Canadian Agent may (but shall not be obligated to) submit a
bid for all Canadian Lenders (including itself) in the form of a credit against
the Canadian Obligations, and Canadian Agent or its designee may (but shall not
be obligated to) accept title to such collateral for and on behalf of all
Canadian Lenders
10.2 Reliance. Each Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for any
Borrower), independent accountants and other experts selected by such Agent.
None of the Agents shall be required in any way to determine the identity or
authority of any Person delivering or executing the same. As to any matters not
expressly provided for by this Agreement, the Letters of Credit, or any other
Loan Document, each Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder and thereunder in accordance with
instructions of the Majority Lenders, and any action taken or failure to act by
U.S. Agent pursuant thereto shall be binding on all of the U.S. Lenders and any
action taken or failure to act by Canadian Agent pursuant thereto shall be
binding on all of the Canadian Lenders. Pursuant to instructions of the
Majority Lenders, the Agents shall have the authority to execute releases of
the Security Documents on behalf of the Lenders without the joinder of any
Lender. If any order, writ, judgment or decree shall be made or entered by any
court affecting the rights, duties and obligations of any Agent under this
Agreement or any other Loan Document, then and in any of such events such Agent
is authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it under the terms of this Agreement, the relevant
Loan Document or otherwise; and if such Agent complies with any such order,
writ, judgment or decree, then it shall not be liable to any Lender or to any
other Person by reason of such compliance even though such order, writ,
judgment or decree may be subsequently reversed, modified, annulled, set aside
or vacated.
10.3 Defaults. None of the Agents shall be deemed to have knowledge of
the occurrence of a Default (other than the non-payment of principal of or
interest on Loans or Reimbursement Obligations) unless such Agent has received
notice from a Lender or a Borrower specifying such Default and stating that
such notice is a "Notice of Default." In the event that any Agent receives
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such a Notice of Default, such Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender prompt notice of each such non-payment).
Each Agent shall (subject to Section 10.7 hereof) take such action with respect
to such Notice of Default as shall be directed by the Majority Lenders and
within its rights under the Loan Documents and at law or in equity, provided
that, unless and until an Agent shall have received such directions, such Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, permitted hereby with respect to such Notice of Default as it
shall deem advisable in the best interests of the Lenders and within its rights
under the Loan Documents, at law or in equity.
10.4 Material Written Notices. In the event that any Agent receives
any written notice of a material nature from any Borrower or any Obligor under
the Loan Documents, such Agent shall promptly inform each of the Lenders
thereof.
10.5 Rights as a Lender. With respect to their U.S. Commitments or
Canadian Commitments, as the case may be, and the Obligations, each of Chase
Texas and BNS, in its capacity as a Lender hereunder, shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting in its agency capacity, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include each Agent in
its individual capacity. Each Agent may (without having to account therefor to
any Lender) accept deposits from, lend money to and generally engage in any
kind of banking, trust, letter of credit, agency or other business with any
Borrower (and any of their Affiliates) as if it were not acting as an Agent,
and each Agent may accept fees and other consideration from any Borrower (in
addition to the fees heretofore agreed to between any Borrower and any Agent)
for services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.6 Indemnification. The Canadian Lenders and the U.S. Lenders,
respectively, agree to indemnify Canadian Agent and U.S. Agent, respectively
(to the extent not reimbursed under Section 2.2(c), Section 11.3 or Section
11.4 hereof, but without limiting the obligations of any Borrower under said
Sections 2.2(c), 11.3 and 11.4), ratably in accordance with the sum of the
applicable Lenders' respective U.S. Commitments, Canadian Commitments and Term
Loans, for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY INDEMNIFIED PARTIES, which may be imposed on, incurred by or
asserted against the applicable Agent in any way relating to or arising out of
this Agreement, the Letters of Credit or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which any Borrower is obligated to pay under Sections 2.2(c), 11.3 and
11.4 hereof, interest, penalties, attorneys' fees and amounts paid in
settlement, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified. The obligations of the
Lenders under this Section 10.6 shall survive the termination of this Agreement
and the repayment of the Obligations.
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10.7 Non-Reliance on Agents and Other Lenders. Each Lender agrees that
it has received current financial information with respect to each Borrower and
each other Obligor and that it has, independently and without reliance on any
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis of each Borrower and each
other Obligor and decision to enter into this Agreement and that it will,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. None of the
Agents shall be required to keep itself informed as to the performance or
observance by any Obligor of this Agreement, the Letters of Credit or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of any Obligor. Except
for notices, reports and other documents and information expressly required to
be furnished to the Lenders by an Agent hereunder, under the Letters of Credit
or the other Loan Documents, none of the Agents shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of any Obligor (or any
of their affiliates) which may come into the possession of any Agent.
10.8 Failure to Act. Except for action expressly required of an Agent
hereunder, under the Letters of Credit or under the other Loan Documents, each
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations under Section
10.6 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor U.S. Agent or Canadian Agent, as the case may be, as
provided below, U.S. Agent and Canadian Agent, respectively, may resign at any
time by giving notice thereof to the U.S. Lenders and the Canadian Lenders,
respectively, and to U.S. Borrower and Canadian Borrower, respectively. Any
Agent may be removed at any time with or without cause by the Majority Lenders;
provided, that such Agent shall continue as U.S. Agent or Canadian Agent, as
the case may be, until such time as any successor shall have accepted
appointment hereunder as U.S. Agent or Canadian Agent, as the case may be. Upon
any such resignation or removal, (i) the Majority Lenders without the consent
of any Borrower shall have the right to appoint a successor U.S. Agent or
Canadian Agent, as the case may be, so long as such successor U.S. Agent or
Canadian Agent, as the case may be, is also a Lender at the time of such
appointment and (ii) the Majority Lenders shall have the right to appoint a
successor U.S. Agent or Canadian Agent, as the case may be, that is not a
Lender at the time of such appointment so long as Borrowers consent to such
appointment (which consent shall not be unreasonably withheld). If no successor
U.S. Agent or Canadian Agent, as the case may be, shall have been so appointed
by the Majority Lenders and accepted such appointment within 30 days after the
retiring U.S. Agent's or Canadian Agent's, as the case may be, giving of notice
of resignation or the Majority Lenders' removal of the retiring U.S. Agent or
Canadian Agent, as the case may be, then the retiring Agent may, on behalf of
the applicable Lenders, appoint a successor U.S. Agent or Canadian Agent, as
the case may be, without the necessity of any consent on the part of any
Borrower or any Lender. Any successor U.S. Agent shall be a bank which has an
office in the
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United States and a combined capital and surplus of at least $250,000,000 and
any successor Canadian Agent shall be a bank which has an office in Canada and
a combined capital and surplus of at least C$250,000,000. Upon the acceptance
of any appointment as U.S. Agent or Canadian Agent, as the case may be,
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder and under any other Loan Documents. Such successor Agent
shall promptly specify by notice to Borrowers its Principal Office referred to
in Section 3.1 and Section 4 hereof. After any retiring Agent's resignation or
removal hereunder as an Agent, the provisions of this Section 10 shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agents or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
any Agent. The relationship between the Lenders, on the one hand, and any
Agent, on the other, is and shall be that of principals and agent only, and
nothing in this Agreement or any of the other Loan Documents shall be construed
to constitute any Agent as trustee or other fiduciary for any Lender or to
impose on any Agent any duty, responsibility or obligation other than those
expressly provided for herein and therein.
10.11 Authority of Agent. Each Lender acknowledges that the rights and
responsibilities of each Agent under this Agreement and the Loan Documents with
respect to any action taken by such Agent or the exercise or non-exercise by
any Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement and/or the
other Loan Documents shall, as between such Agent and the Lenders, be governed
by this Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between such Agent and the
Obligors, such Agent shall be conclusively presumed to be acting as agent for
the applicable Lenders with full and valid authority so to act or refrain from
acting; and each Obligor shall not be under any obligation, or entitlement, to
make any inquiry respecting such authority.
11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default shall be a
waiver of any other Default or Event of Default. No failure on the part of any
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
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11.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telegraph, telecopy (confirmed
by mail), cable or other writing and telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (or provided for in an Assignment and
Acceptance); or, as to any party hereto, at such other address as shall be
designated by such party in a notice (given in accordance with this Section) (i)
as to any Borrower, to Agents, (ii) as to U.S. Agent, to U.S. Borrower and to
each U.S. Lender, (iii) as to Canadian Agent, to Canadian Borrower and to each
Canadian Lender, (iv) as to any U.S. Lender, to U.S. Borrower and Agents and (v)
as to any Canadian Lender, to Canadian Borrower and Agents. Except as otherwise
provided in this Agreement, all such notices or communications shall be deemed
to have been duly given when (a) transmitted by telecopier or delivered to the
telegraph or cable office, (b) personally delivered (c) one Business Day after
deposit with an overnight mail or delivery service, postage prepaid or (d) three
Business Days' after deposit in a receptacle maintained by the United States
Postal Service or Canada Post, as the case may be, postage prepaid, registered
or certified mail, return receipt requested, in each case given or addressed as
aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Bankers' Acceptances ever accepted and purchased or any Letter of Credit ever
issued, Borrowers shall pay or reimburse within 10 Business Days after written
demand (a) any Agent for paying the reasonable fees and expenses of legal
counsel to such Agent, together with the reasonable fees and expenses of each
local counsel to such Agent, in connection with the preparation, negotiation,
execution and delivery of this Agreement (including the exhibits and schedules
hereto), the Security Documents and the other Loan Documents and the making of
the Loans and the acceptance and purchase of Bankers' Acceptances and the
issuance of Letters of Credit hereunder, and any modification, supplement or
waiver of any of the terms of this Agreement, the Letters of Credit or any
other Loan Document; (b) any Agent for any reasonable and customary search
fees, collateral audit fees, appraisal fees, survey fees, environmental study
fees, and title insurance costs and premiums; (c) any Agent for reasonable
out-of-pocket expenses incurred in connection with the preparation,
documentation, administration and syndication of the Loans or any of the Loan
Documents (including, without limitation, the advertising, marketing, printing,
publicity, duplicating, mailing and similar expenses) of the Loans and Letter
of Credit Liabilities; (d) Agent for paying all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement, any Letter of Credit or any
other Loan Document or any other document referred to herein or therein; (e)
any Agent for paying all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any Lien contemplated by this Agreement, any Security Document or any
document referred to herein or therein, and (f) following the occurrence and
during the continuation of an Event of Default, any Lender or any Agent for
paying all amounts reasonably expended, advanced or incurred by such Lender or
such Agent to satisfy any obligation of any Obligor under this Agreement or any
other Loan Document, to protect the Collateral, to collect the Obligations or
to enforce, protect, preserve or defend the rights of the Lenders or Agents
under this Agreement or any other Loan Document, including, without limitation,
fees and expenses incurred in connection with such Lender's or such Agent's
participation as a member of a creditor's committee in a case commenced under
the Bankruptcy Code
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or other similar law, fees and expenses incurred in connection with lifting the
automatic stay prescribed in Section 362 of the Bankruptcy Code and fees and
expenses incurred in connection with any action pursuant to Section 1129 of the
Bankruptcy Code and all other reasonable and customary out-of-pocket expenses
incurred by such Lender or such Agent in connection with such matters, together
with interest thereon at the Past Due Rate applicable to U.S. Loans on each
such amount from the due date until the date of reimbursement to such Lender or
such Agent.
11.4 Indemnification. Borrowers, jointly and severally, shall
indemnify each Agent, each Lender and each affiliate thereof and their
respective directors, officers, employees and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, REGARDLESS OF WHETHER CAUSED IN WHOLE OR
IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES, insofar as such losses,
liabilities, claims or damages arise out of or result from any (i) actual or
proposed use by any Borrower of the proceeds of any extension of credit
(whether a Loan, a Bankers' Acceptance or a Letter of Credit) by any Lender
hereunder; (ii) breach by any Obligor of this Agreement or any other Loan
Document; (iii) violation by any Obligor of any Legal Requirement, or (iv)
investigation, litigation or other proceeding relating to any of the foregoing,
and Borrowers, jointly and severally, shall reimburse each Agent, each Lender,
and each Affiliate thereof and their respective directors, officers, employees
and agents, upon demand for any reasonable and customary expenses (including
reasonable and customary legal fees) incurred in connection with any such
investigation or proceeding; provided, however, that none of the Borrowers
shall have any obligations pursuant to this Section with respect to any losses,
liabilities, claims, damages or expenses incurred by the Person seeking
indemnification by reason of the gross negligence or willful misconduct of that
Person or with respect to any disputes between or among any of Agents, Lenders
and Issuers. Nothing in this Section is intended to limit the obligations of
any Borrower under any other provision of this Agreement. Each Agent and each
Lender, respectively, shall indemnify Borrowers and hold Borrowers harmless
from and against the gross negligence or willful misconduct of such Agent or
such Lender, as the case may be. Nothing in this Section shall render Canadian
Borrower liable in respect of the U.S. Obligations. In the case of any
indemnification hereunder, the applicable Agent or the respective Lender, as
appropriate, shall give written notice to the applicable Borrower of any such
claim or demand being made against an indemnified person and the applicable
Borrower shall have the non-exclusive right to join in the defense against any
such claim or demand, provided that if such Borrower provides a defense, the
indemnified person shall bear its own cost of defense unless there is a
conflict of interests between such Borrower and such indemnified person. No
indemnified person may settle any claim to be indemnified without the consent
of the applicable Borrower, such consent not to be unreasonably withheld or
delayed.
11.5 Amendments, Etc. No amendment or modification of this Agreement,
the Notes or any other Loan Document shall in any event be effective against
any Borrower or any other Obligor party thereto unless the same shall be agreed
or consented to in writing by such Person. No amendment, modification or waiver
of any provision of this Agreement, the Notes or any other Loan Document, nor
any consent to any departure by any Obligor therefrom, shall in any event be
effective against the Lenders unless the same shall be agreed or consented to
in writing by the Majority Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the
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specific purpose for which given; provided, that no amendment, modification,
waiver or consent shall, unless in writing and signed by each Lender affected
thereby, do any of the following: (a) increase any U.S. Commitments or Canadian
Commitments of any of the Lenders (or reinstate any termination or reduction of
the U.S. Commitments or Canadian Commitments), or subject any of the Lenders to
any additional obligations; (b) reduce the principal of, or interest on, any
Loan, Reimbursement Obligation, fee or other amount due hereunder; (c) postpone
or extend the Revolving Loan Maturity Date, the Term Loan Maturity Date, the
Termination Date, the Availability Period or any scheduled date fixed for any
payment of principal of, or interest on, any Loan, Reimbursement Obligation,
fee or other sum to be paid hereunder or waive any Event of Default described
in Section 9.1(a) hereof; (d) change the percentage of any of the U.S.
Commitments or Canadian Commitments, as the case may be, or of the aggregate
unpaid principal amount of Obligations, or the percentage of Lenders, which
shall be required for the Lenders or any of them to take any action under this
Agreement; (e) change any provision contained in Sections 2.2(c), 7.9, 11.3 or
11.4 hereof or this Section 11.5; (f) release any Person from liability under a
Guaranty or release all or substantially all of the security for the
Obligations or release Collateral (exclusive of Collateral with respect to
which any Agent is obligated to provide a release pursuant to this Agreement or
any of the other Loan Documents or by law) in any one (1) calendar year
ascribed an aggregate value on the most recent financial statements of the
applicable Borrower delivered to Agents in excess of $1,000,000; (g) increase
any of the fixed percentages to be multiplied by the aggregate amounts of the
components comprising the U.S. Borrowing Base or the Canadian Borrowing Base
that are described in (i) and (ii) of the definition of the U.S. Borrowing Base
and the Canadian Borrowing Base herein, or (h) modify the provisions of
Sections 4.1(b) or 4.2 hereof regarding pro rata application of amounts after
an Event of Default shall have occurred and be continuing. Notwithstanding
anything in this Section 11.5 to the contrary, no amendment, modification,
waiver or consent shall be made with respect to Section 10 without the consent
of U.S. Agent to the extent it affects U.S. Agent, as U.S. Agent or Canadian
Agent to the extent it affects Canadian Agent, as Canadian Agent.
11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agents and the Lenders and their respective successors and assigns;
provided, however, that, except as permitted by Section 8.4 hereof, no Borrower
may assign or transfer any of its rights or obligations hereunder without the
prior written consent of all of the Lenders, and any such assignment or
transfer without such consent shall be null and void. Each Lender may sell
participations to any Person in all or part of any Loan or Bankers' Acceptance,
or all or part of its Notes, U.S. Commitments or Canadian Commitments, as the
case may be, or interests in Letters of Credit or Bankers' Acceptances, in
which event, without limiting the foregoing, the provisions of the Loan
Documents shall inure to the benefit of each purchaser of a participation;
provided, however, the pro rata treatment of payments, as described in Section
4.2 hereof and rights to compensation under Section 3.3 hereof, shall be
determined as if such Lender had not sold such participation. No Lender that
sells one or more participations to any Person shall be relieved by virtue of
such participation from any of its obligations to Borrowers under this
Agreement. In the event any Lender shall sell any participation, such Lender
shall retain the sole right and responsibility to enforce the obligations of
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Borrowers hereunder, including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement other than
amendments, modifications or waivers with respect to (i) any fees payable
hereunder to the Lenders, (ii) the amount of principal or the rate of interest
payable on, or the dates fixed for the scheduled repayment of principal of, any
of the Obligations and (iii) the release of the Liens on all or substantially
all of the Collateral.
(b) Each U.S. Lender may assign to one or more U.S. Lenders or any
other Person all or a portion of its interests, rights and obligations under
this Agreement; provided, however, that (i) the aggregate amount of the U.S.
Commitments and Term Loans of the assigning U.S. Lender subject to each such
assignment shall in no event be less than $5,000,000 and (ii) other than in the
case of an assignment to another U.S. Lender (that is, at the time of the
assignment, a party hereto) or to an Affiliate of such U.S. Lender or to a
Federal Reserve Bank, Agents and, so long as no Event of Default shall have
occurred and be continuing, U.S. Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld. Each Canadian
Lender may assign to one or more Canadian Lenders or any other Person all or a
portion of its interests, rights and obligations under this Agreement;
provided, however, that (i) the aggregate amount of the Canadian Commitments of
the assigning Canadian Lender subject to each such assignment shall in no event
be less than $5,000,000 and (ii) other than in the case of an assignment to
another Canadian Lender (that is, at the time of the assignment, a party
hereto) or to an Affiliate of such Canadian Lender, Agents and, so long as no
Event of Default shall have occurred and be continuing, Canadian Borrower must
each give its prior written consent, which consents shall not be unreasonably
withheld. As a condition precedent to any such assignment, the parties to each
such assignment shall execute and deliver to the applicable Agent, for its
acceptance an Assignment and Acceptance in substantially the form of Exhibit E
hereto (each an "Assignment and Acceptance") with blanks appropriately
completed, together with any Note or Notes subject to such assignment and a
processing and recording fee of $3,000 paid by the assignee (for which
Borrowers will have no liability). Upon such execution, delivery and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (B) the Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto except in respect of provisions of this Agreement which survive
payment of the Obligations and termination of the U.S. Commitments or Canadian
Commitments, as the case may be). Notwithstanding anything contained in this
Agreement to the contrary, any Lender may at any time assign all or any portion
of its rights under this Agreement and the other Loan Documents as collateral
to a Federal Reserve Bank; provided that no such assignment shall release such
Lender from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any
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statements, warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any of the other Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such Lender assignor makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Borrower or any Obligor or the performance or observance by
any Borrower or any Obligor of any of its obligations under this Agreement or
any of the other Loan Documents to which it is a party or any other instrument
or document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements most recently delivered under either Section 6.2 or Section 7.2
hereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon
any Agent, such Lender assignor 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 Loan Documents; (v) such assignee appoints and authorizes U.S. Agent
or Canadian Agent, as the case may be, to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to such Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all obligations that by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(d) The entries in the records of each applicable Agent as to each
Assignment and Acceptance delivered to it and the names and addresses of the
Lenders and the U.S. Commitments or Canadian Commitments of, and principal
amount of the Obligations owing to, each Lender from time to time shall be
conclusive, in the absence of manifest error, and Obligors, Agents and the
Lenders may treat each Person the name of which is recorded in the books and
records of the applicable Agent as a Lender hereunder for all purposes of this
Agreement and the other Loan Documents.
(e) Upon the applicable Agent's receipt of an Assignment and
Acceptance executed by an assigning Lender and the assignee thereunder,
together with any Note or Notes subject to such assignment and the written
consent to such assignment (to the extent consent is required), such Agent
shall, if such Assignment and Acceptance has been completed with blanks
appropriately filled, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in its records and (iii) give prompt notice
thereof to the applicable Borrower. Within five Business Days after receipt of
notice, the applicable Borrower, at its own expense, shall execute and deliver
to the applicable Agent new Notes payable to the order of such assignee in the
appropriate amounts and, if the assigning Lender has retained U.S. Commitments
or Canadian Commitments, as the case may be, or Term Loans hereunder, new Notes
to the order of the assigning Lender in the appropriate amounts. Such new Notes
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in the forms required hereunder. Thereafter, the replaced Notes
shall be surrendered to the applicable Agent by the applicable Lender or
Lenders, marked renewed and substituted and the originals thereof delivered to
the applicable Borrower (with copies to be retained by the applicable Agent).
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(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.6, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to any Borrower furnished to such Lender by or on behalf
of any Borrower; provided such Person agrees to maintain the confidentiality of
such information in accordance with Section 11.18.
11.7 Limitation of Interest. U.S. Borrower and the U.S. Lenders intend
to strictly comply with all applicable usury laws of the United States and
Texas (or the usury laws of any jurisdiction, including Canada, whose usury
laws are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of
Texas). Canadian Borrower and the Canadian Lenders intend to strictly comply
with all applicable usury laws of Canada and Ontario (or the usury laws of any
jurisdiction, including the State of Texas, whose usury laws are deemed to
apply to the Notes or any other Loan Documents despite the intention and desire
of the parties to apply the usury laws of Ontario and Canada). Accordingly, the
provisions of this Section 11.7 shall govern and control over every other
provision of this Agreement or any other Loan Document which conflicts or is
inconsistent with this Section, even if such provision declares that it
controls. As used in this Section, the term "interest" includes the aggregate
of all charges, fees, benefits or other compensation which constitute interest
under applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, in equal parts during the full term of the Obligations.
In no event shall Borrowers or any other Person be obligated to pay, or any
Agent, any Issuer or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under applicable laws or (b) total interest in excess of the
amount which such Person could lawfully have contracted for, reserved,
received, retained or charged had the interest been calculated for the full
term of the Obligations at the Ceiling Rate. To the maximum extent permitted by
applicable law, the daily interest rates to be used in calculating interest at
the Ceiling Rate shall be determined by dividing the applicable Ceiling Rate
per annum by the number of days in the calendar year for which such calculation
is being made. None of the terms and provisions contained in this Agreement or
in any other Loan Document (including, without limitation, Section 9.1 hereof)
which directly or indirectly relate to interest shall ever be construed without
reference to this Section 11.7, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Ceiling Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or
by reason of any required or permitted prepayment, and if for that (or any
other) reason any Agent, any Issuer or any Lender at any time, including but
not limited to, the stated maturity, is owed or receives (and/or has received)
interest in excess of interest calculated at the Ceiling Rate, then and in any
such event all of any such excess interest shall be canceled automatically as
of the date of such acceleration, prepayment or other event which produces the
excess, and, if such excess interest has been paid to such Person, it shall be
credited pro tanto against the then-outstanding principal balance of the
applicable Borrower's obligations to such Person, effective as of the date or
dates when the event occurs which causes it to be excess interest, until such
excess is exhausted or all of such principal has been fully paid and
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satisfied, whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.
11.8 Survival. The obligations of Borrowers under Sections 2.2(c),
2.2(d), 7.9, 11.3 and 11.4 hereof and all other obligations of Borrowers in any
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of
the Lenders under Sections 4.1(d), 10.6, 11.7, 11.13 and 11.18 hereof, shall,
notwithstanding anything herein to the contrary, survive the repayment of the
Loans and Reimbursement Obligations and the termination of the U.S.
Commitments, the Canadian Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED)
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM
TIME TO TIME IN EFFECT; PROVIDED, HOWEVER, THAT, EXCEPT AS MAY BE REQUIRED
UNDER APPLICABLE LAWS, THE USURY LAWS OF THE STATE OF TEXAS OR THE UNITED
STATES OF AMERICA SHALL NOT APPLY TO LOANS MADE TO AND BANKERS ACCEPTANCES
ACCEPTED IN CANADA BY CANADIAN LENDERS DRAWN BY CANADIAN BORROWER, BUT RATHER
THE USURY LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA
APPLICABLE THEREIN SHALL GOVERN IN SUCH CONTEXT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of any Loan Document shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions of such Loan Document
shall not be affected or impaired thereby.
11.13 Tax Forms; Net Payments.
(a) Each U.S. Lender which is organized under the laws of a
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such U.S. Lender hereunder and from time to time thereafter
if requested by U.S. Borrower or U.S. Agent, provide U.S. Agent and U.S.
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying as to such U.S. Lender's status for purposes of determining
exemption from United States
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withholding taxes with respect to all payments to be made to such U.S. Lender
hereunder or other documents satisfactory to such U.S. Lender, U.S. Borrower and
U.S. Agent indicating that all payments to be made to such U.S. Lender hereunder
are not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty. Unless U.S. Borrower and U.S. Agent
shall have received such forms or such documents indicating that payments to
such U.S. Lender hereunder are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, U.S.
Borrower and U.S. Agent shall be entitled to withhold taxes from such payments
at the applicable statutory rate.
(b) Each Canadian Lender is a resident of Canada for purposes of the
Income Tax Act (Canada).
11.14 Interest Act (Canada). Whenever interest is calculated on the
basis of a year of 360 or 365 days, for the purposes of the Interest Act
(Canada), the yearly rate of interest which is equivalent to the rate payable
hereunder is the rate payable multiplied by the actual number of days in the
year and divided by 360 or 365, as the case may be. All interest will be
calculated using the nominal rate method and not the effective rate method and
the deemed reinvestment principle shall not apply to such calculations.
11.15 Judgment Currency. The obligation of each Borrower to make
payments on any Obligation to the Lenders or to any Agent hereunder in any
currency (the "first currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency (the "second currency") except to the extent to which such
tender or recovery shall result in the effective receipt by the applicable
Lender or the applicable Agent of the full amount of the first currency
payable, and accordingly the primary obligation of each Borrower shall be
enforceable as an alternative or additional cause of action for the purpose of
recovery in the second currency of the amount (if any) by which such effective
receipt shall fall short of the full amount of the first currency payable and
shall not be affected by a judgment being obtained for any other sum due
hereunder.
11.16 Conflicts Between This Agreement and the Other Loan Documents.
In the event of any conflict between the terms of this Agreement and the terms
of any of the other Loan Documents, the terms of this Agreement shall control.
11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 2.2(d), 3.3(c) or 7.9 notwithstanding:
(1) No Borrower shall be required to pay to any Lender
reimbursement or indemnification with regard to any costs or expenses
described in such Sections, unless such Lender notifies the applicable
Borrower of such costs or expenses within 90 days after the date paid
or incurred;
(2) none of the Lenders shall be permitted to pass through to
any Borrower charges and costs under such Sections on a discriminatory
basis (i.e., which are not also
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passed through by such Lender to other customers of such Lender
similarly situated where such customer is subject to documents
providing for such pass through); and
(3) if any Lender elects to pass through to any Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time, the
applicable Borrower may, within 60 days after the date of such event
and so long as no Default shall have occurred and be continuing, elect
to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination such Borrower shall (i) if Agents
and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender
through such date of termination or (ii) have arranged for another
financial institution approved by Agents (such approval not to be
unreasonably withheld or delayed) as of such date, to become a
substitute Lender for all purposes under this Agreement in the manner
provided in Section 11.6; provided further that, prior to substitution
for any Lender, the applicable Borrower shall have given written
notice to Agents of such intention and the Lenders shall have the
option, but no obligation, for a period of 60 days after receipt of
such notice, to increase their U.S. Commitments or Canadian
Commitments, as the case may be, in order to replace the affected
Lender in lieu of such substitution.
11.18 Confidentiality. Each Lender agrees to exercise its best efforts
to keep any information delivered or made available by any Obligor which is
clearly indicated to be confidential information, confidential from anyone
other than Persons employed or retained by such Lender or any of its Affiliates
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Obligations; provided that nothing herein shall prevent
any Lender from disclosing such information (a) to any other Lender; (b)
pursuant to subpoena or upon the order of any court or administrative agency;
(c) upon the request or demand of any regulatory agency or authority having
jurisdiction over such Lender; (d) which has been publicly disclosed; (e) to
the extent reasonably required in connection with any litigation to which any
Agent, any Lender, any Obligor or their respective Affiliates may be a party;
(f) to the extent reasonably required in connection with the exercise of any
remedy hereunder; (g) to such Lender's bank counsel and independent auditors;
and (h) to any actual or proposed participant or assignee of all or part of its
rights hereunder which has agreed in writing to be bound by the provisions of
this Section.
11.19 Amendment and Restatement. This Agreement amends and restates in
entirety that certain Loan Agreement dated June 30, 1997 executed by and among
U.S. Borrower, Chase Bank of Texas, National Association (formerly known as
Texas Commerce Bank National Association), as Agent and certain lenders therein
named, as the same may have been amended.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
NATIONAL TANK COMPANY,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX, III
------------------------------------------------
Xxxxxxx X. Xxxxxx, III, Senior Vice President
NATCO CANADA, LTD., a corporation formed
under the laws of the Province of Ontario
By: /s/ XXXXXXX X. XXXXXX, III
------------------------------------------------
Xxxxxxx X. Xxxxxx, III, Senior Vice President
Address for Notices:
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, III
Telecopy No.: (000) 000-0000
91
00
XXXXX XXXX XX XXXXX, NATIONAL
ASSOCIATION, as U.S. Agent, Issuer of U.S. Letters
of Credit and a U.S. Lender
By: /s/ XXXX X. XXXX
------------------------------------------------
Xxxx X. Xxxx, Senior Vice President
Address for Notices:
U.S. Commitment: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
$10,697,247.71 Attention: Manager, Structured Finance - Oil Service
Telecopy No.: (000) 000-0000
with a copy to:
Canadian Commitment:
Xx. Xxxxxxx Xxxxxxx
$0 The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Term Loans: Telecopy No.: (000) 000-0000
$15,802,752.29
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00
XXX XXXX XX XXXX XXXXXX,
as Canadian Agent, Issuer of Canadian Letters
of Credit and a Canadian Lender
By: /s/ XXXXX DE ST. GORRE
-------------------------------------------------
Name: Xxxxx De St. Gorre
-----------------------------------------------
Title: Account Manager
----------------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
$0 Attention: Xx. Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
Canadian Commitment: with a copy to:
$10,000,000 The Bank of Nova Scotia
Calgary Commercial Banking Centre
Term Loans: 000-0 Xxx. X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
$0 Attention: Ms. Xxxxx de St. Jorre
Telecopy No.: (000) 000-0000
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00
XXX XXXX XX XXXX XXXXXX,
as a U.S. Lender
By: /s/ F.C.H. XXXXX
-------------------------------------------------
Name: F.C.H. Xxxxx
-----------------------------------------------
Title: Senior Manager
----------------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
$2,018,348.62 Attention: Xx. Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
Canadian Commitment: with a copy to:
$0 The Bank of Nova Scotia
Calgary Commercial Banking Centre
Term Loans: 000-0 Xxx. X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
$2,981,651.38 Attention: Ms. Xxxxx de St. Jorre
Telecopy No.: (000) 000-0000
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XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By: /s/ XXXXX X. XXXXXXXXX
-------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Title: Vice President
----------------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
$2,018,348.62 Attention: Xx. Xxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
Canadian Commitment:
$0
Term Loans:
$2,981,651.38
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000
XXXX XXX, XXXXX, N.A.
By: /s/ XXXXX X. XXXXXX
-------------------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------------------------
Title: Vice President
----------------------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
$7,266,055.05 Attention: Xx. Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Canadian Commitment:
$0
Term Loans:
$10,733,944.95
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NATCO Group Inc. joins in the execution hereof for the purpose of (i)
acknowledging the representations, warranties, covenants and agreements set
forth herein which relate to it, (ii) agreeing to be bound by the covenants and
agreements set forth herein which relate to it and (iii) confirming the
accuracy of the representations and warranties set forth herein which relate to
it.
NATCO GROUP INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX, III
-----------------------------------------------
Xxxxxxx X. Xxxxxx, III, Senior Vice President
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AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of June 30, 1999 by and among NATIONAL TANK COMPANY, a Delaware
corporation (the "U.S. Borrower"); NATCO CANADA, LTD., a corporation formed
under the laws of the Province of Ontario (the "Canadian Borrower"); each of
the Lenders which is or may from time to time become a party to the Loan
Agreement (as defined below) (individually, a "Lender" and, collectively, the
"Lenders"), CHASE BANK OF TEXAS, N. A., a national banking association
(previously known as Texas Commerce Bank National Association), acting as agent
for the U.S. Lenders (in such capacity, together with its successors in such
capacity, the "U.S. Agent"), and THE BANK OF NOVA SCOTIA, as agent for the
Canadian Lenders (in such capacity, together with its successors in such
capacity, the "Canadian Agent"). The U.S. Borrower and the Canadian Borrower
are herein collectively called the "Borrowers" and the U.S. Agent and the
Canadian Agent are herein collectively called the "Agents".
RECITALS
A. The Borrowers, the Lenders and the Agents executed and delivered
that certain Loan Agreement (the "Loan Agreement") dated as of November 20,
1998. Any capitalized term used in this Amendment and not otherwise defined
shall have the meaning ascribed to it in the Loan Agreement.
B. The Borrowers, the Lenders and the Agents desire to amend the Loan
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein set forth, and further good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers, the Lenders and the Agents do hereby agree as
follows:
SECTION 1. Amendments to Loan Agreement. On and after the
Amendment Effective Date, the Loan Agreement shall be amended as follows:
(a) The definition of "Capital Expenditures" set forth in Section 1.1
of the Loan Agreement is hereby amended to read in its entirety as follows:
Capital Expenditures means, with respect to any Person for
any period, expenditures in respect of fixed or capital assets by such
Person, including capital lease obligations incurred during such
period (to the extent not already included), which would be reflected
as additions to Property, plant or equipment on a balance sheet of
such Person and its consolidated Subsidiaries, if any, prepared in
accordance with GAAP; but excluding (i) expenditures during such
period for the repair or replacement of any fixed or capital asset
104
which was destroyed, damaged or taken, in whole or in part, to the
extent financed by the proceeds of an insurance policy maintained by
such Person or the proceeds of a condemnation award and (ii) capital
expenditures in the amount of $897,000.00 incurred during the
nine-month period ending June 30, 1999 related to the expansion of
plants of The Cynara Company and the Borrowers.
(b) The definition of "U.S. Borrowing Base" set forth in Section 1.1
of the Loan Agreement is hereby amended to read in its entirety as follows:
U.S. Borrowing Base means, as at any date, the amount of the
U.S. Borrowing Base shown on the Borrowing Base Certificate then most
recently delivered pursuant to Section 7.2(b) hereof, determined by
calculating the amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts
of U.S. Borrower and its Subsidiaries (other than
Canadian Subsidiaries) at said date, plus
(ii) the sum of (w) 75% of that portion of Eligible
Inventory of Test, Inc. at said date (determined at
the lower of cost or market on a consistent basis)
which consists of costs in excess of xxxxxxxx for
time and material contracts and which relate to
signed time and material tickets, (x) 20% of that
portion of Eligible Inventory of U.S. Borrower and
its Subsidiaries (other than Canadian Subsidiaries)
at said date (determined at the lower of cost or
market on a consistent basis) which consists of used
finished goods, (y) 25% of that portion of Eligible
Inventory of U.S. Borrower and its Subsidiaries
(other than Canadian Subsidiaries) at said date
(determined at the lower of cost or market on a
consistent basis) which consists of work-in- process
relating to projects for customers that are not
account debtors with respect to any Accounts owing
to U.S. Borrower and its Subsidiaries (other than
Canadian Subsidiaries) which are not Eligible
Accounts and (z) 50% of the aggregate amount of all
other Eligible Inventory of U.S. Borrower and its
Subsidiaries (other than Canadian Subsidiaries) at
said date (determined at the lower of cost or market
on a consistent basis); provided that the amount
calculated pursuant to this clause (ii) shall not
exceed 50% of the U.S. Borrowing Base.
In the absence of a current Borrowing Base Certificate, U.S. Agent
shall determine the U.S. Borrowing Base from time to time in its
reasonable discretion, taking into account all information reasonably
available to it, and the U.S. Borrowing Base from time to time so
determined shall be the Borrowing Base for all purposes of this
Agreement until a current Borrowing Base Certificate, in Proper Form,
is furnished to and accepted by U.S. Agent.
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105
(c) Section 7.3 of the Loan Agreement is hereby amended to read in its
entirety as follows:
7.3 Financial Tests. Have and maintain:
(a) Net Worth - Net Worth of not less than (1) at
all times during the period commencing on June 30, 1999
through and including September 30, 1999, an amount equal to
$30,000,000 and (2) at all times during each fiscal quarter
thereafter, the sum of $30,000,000 plus 50% of the net income
of U.S. Borrower and its Subsidiaries, on a consolidated
basis (if positive), for the period from June 30, 1999
through the last day of the fiscal quarter ending immediately
prior to the date of such calculation, plus 100% of the net
proceeds realized from the issuance of any equity securities
by U.S. Borrower during that period plus 100% of Net Equity
Proceeds received during that period.
(b) Debt to Capitalization Ratio - a Debt to
Capitalization Ratio of not greater than (1) 60% at all times
during the period commencing on June 30, 1999 through and
including March 31, 2000; (2) 55% at all times during the
period commencing on April 1, 2000 through and including June
30, 2000; (3) 50% at all times during the period commencing
on July 1, 2000 through and including December 31, 2000, and
(4) 45% at all times thereafter.
(c) Fixed Charge Coverage Ratio - a Fixed Charge
Coverage Ratio of not less than (1) 1.00 to 1.00 at all times
during the period commencing on June 30, 1999 through and
including December 31, 1999; (2) 1.10 to 1.00 at all times
during the period commencing on January 1, 2000 through and
including March 31, 2000 and (3) 1.25 to 1.00 at all times
thereafter.
(d) Section 8.10 of the Loan Agreement is hereby amended to read in
its entirety as follows:
8.10 Key Agreements. Terminate or agree to the termination of
any Key Agreement or amend, modify or obtain or grant a waiver of any
provision of any of the Key Agreements if such action could reasonably
be expected to have a Material Adverse Effect (provided that no
consent of any Agent or any Lender shall be required with respect to
an amendment of the EXIM Facility which has the sole effect of
increasing the EXIM Facility to an amount not greater than
$12,500,000).
SECTION 2. Ratification. Except as expressly amended by this
Amendment, the Loan Agreement and the other Loan Documents shall remain in full
force and effect. None of the rights, title and interests existing and to exist
under the Loan Agreement are hereby released, diminished
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106
or impaired, and the Borrowers hereby reaffirm all covenants, representations
and warranties in the Loan Agreement.
SECTION 3. Expenses. The Borrowers shall pay to the Agents all
reasonable fees and expenses of their respective legal counsel (pursuant to
Section 11.3 of the Loan Agreement) incurred in connection with the execution
of this Amendment.
SECTION 4. Certifications. The Borrowers hereby certify that (a)
no event which could reasonably be expected to have a Material Adverse Effect
has occurred and is continuing and (b) no Default or Event of Default has
occurred and is continuing or will occur as a result of this Amendment.
SECTION 5. Miscellaneous. This Amendment (a) shall be binding upon
and inure to the benefit of the Borrowers, the Lenders and the Agents and their
respective successors, assigns, receivers and trustees; (b) may be modified or
amended only by a writing signed by the required parties; (c) shall be governed
by and construed in accordance with the laws of the State of Texas and the
United States of America; (d) may be executed in several counterparts by the
parties hereto on separate counterparts, and each counterpart, when so executed
and delivered, shall constitute an original agreement, and all such separate
counterparts shall constitute but one and the same agreement and (e) together
with the other Loan Documents, embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, consents and understandings relating to such subject
matter. The headings herein shall be accorded no significance in interpreting
this Amendment.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SECTION 26.02
THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN
DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY
CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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107
IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agents have
caused this Amendment to be signed by their respective duly authorized
officers, effective as of the date first above written.
NATIONAL TANK COMPANY,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Vice President - Finance and Accounting
---------------------------------------
NATCO CANADA, LTD., a corporation formed
under the laws of the Province of Ontario
By: /s/ XXXXXX XXXXXXXXX
------------------------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------------------
Title: Controller
---------------------------------------
5
000
XXXXX XXXX XX XXXXX, NATIONAL
ASSOCIATION, as U.S. Agent, Issuer of U.S.
Letters of Credit and a U.S. Lender
By: /s/ XXXX X. XXXX
------------------------------------------
Name: Xxxx X. Xxxx
----------------------------------------
Title: Managing Director
---------------------------------------
6
000
XXX XXXX XX XXXX XXXXXX,
as Canadian Agent, Issuer of Canadian Letters
of Credit and a Canadian Lender
By: /s/ XXXXX DE ST. GORRE
------------------------------------------
Name: Xxxxx De St. Gorre
----------------------------------------
Title: Account Manager
---------------------------------------
7
000
XXX XXXX XX XXXX XXXXXX,
as a U.S. Lender
By: /s/ F.C.H. XXXXX
------------------------------------------
Name: F.C.H. Xxxxx
----------------------------------------
Title: Senior Manager
---------------------------------------
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XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By: /s/ XXXX X. XXXX
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Name: Xxxx X. Xxxx
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Title: Vice President
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000
XXXX XXX, XXXXX, N.A.
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
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Title: Vice President
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The undersigned hereby join in this Amendment to evidence their
consent to execution by Borrowers of this Amendment, to confirm that each Loan
Document now or previously executed by the undersigned applies and shall
continue to apply to the Loan Agreement, as amended hereby, to acknowledge that
without such consent and confirmation, Lender would not execute this Amendment
and to join in the notice pursuant to Tex. Bus. & Comm. Code Section 26.02 set
forth above.
TOTAL ENGINEERING SERVICES TEAM, INC., a
Louisiana corporation, TEST, INC., a
Louisiana corporation, NATCO LONDON, INC.,
a Delaware corporation and NATCO GROUP INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XxXXXXXX
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Name: Xxxxxxx X. XxXxxxxx
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Title: President - Natco Group Inc.
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