EXHIBIT 10.29
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[EXECUTION COPY]
$37,500,000
CREDIT AGREEMENT
Dated as of March 27, 2002
among
WOLVERINE TUBE, INC.,
and
Certain of its Subsidiaries,
as Borrowers
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.3 HEREOF,
as Lenders,
WACHOVIA BANK, N.A.,
as Administrative Agent,
and
CONGRESS FINANCIAL CORPORATION (CANADA),
as Canadian Agent
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FIRST UNION SECURITIES, INC., d/b/a WACHOVIA SECURITIES,
as Sole Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...................................................1
1.1 General Definitions.........................................................1
1.2 Accounting Terms...........................................................31
1.3 Other Definitional Provisions..............................................32
1.4 Dollar Equivalent Provisions...............................................32
ARTICLE II THE REVOLVING LOANS..............................................................33
2.1 The U.S. Revolving Loans...................................................33
2.2 U.S. Letter of Credit Subfacility..........................................34
2.3 The Canadian Revolving Loans...............................................39
2.4 Canadian Letter of Credit Facility.........................................41
2.5 Bankers' Acceptances.......................................................47
2.6 Minimum Amounts of Loans...................................................51
2.7 Funding of Loans to Borrowers..............................................51
2.8 Term.......................................................................56
2.9 Revolving Notes............................................................57
2.10 Reduction of Revolving Loan Commitments....................................57
ARTICLE III CASH DOMINION ARRANGEMENTS......................................................57
3.1 U.S. Lockbox Arrangements..................................................57
3.2 Canadian Lockbox Arrangements..............................................59
3.3 Maintenance of Account.....................................................60
3.4 Statement of Account.......................................................61
ARTICLE IV ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT......................62
4.1 Continuations and Conversions..............................................62
4.2 Interest...................................................................63
4.3 Place and Manner of Payments...............................................64
4.4 Prepayments................................................................65
4.5 Fees.......................................................................67
4.6 Pro Rata Treatment.........................................................68
4.7 Allocation of Payments After Event of Default..............................69
4.8 Sharing of Payments........................................................71
4.9 Capital Adequacy...........................................................71
4.10 Inability To Determine Interest Rate or Create Bankers' Acceptances........72
4.11 Illegality.................................................................73
4.12 Requirements of Law........................................................73
4.13 Taxes......................................................................74
4.14 Compensation...............................................................77
ARTICLE V CONDITIONS PRECEDENT..............................................................78
5.1 Closing Conditions.........................................................78
5.2 Conditions to All Extensions of Credit.....................................82
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ARTICLE VI REPRESENTATIONS AND WARRANTIES...................................................83
6.1 Organization and Good Standing.............................................83
6.2 Due Authorization..........................................................84
6.3 No Conflicts...............................................................84
6.4 Consents...................................................................84
6.5 Enforceable Obligations....................................................84
6.6 Financial Condition........................................................85
6.7 No Default.................................................................85
6.8 Liens......................................................................85
6.9 Indebtedness...............................................................86
6.10 Litigation.................................................................86
6.11 Material Contracts.........................................................86
6.12 Taxes......................................................................86
6.13 Compliance with Law........................................................86
6.14 ERISA......................................................................87
6.15 Subsidiaries...............................................................88
6.16 Use of Proceeds; Margin Stock..............................................89
6.17 Government Regulation......................................................89
6.18 Hazardous Substances.......................................................89
6.19 Patents, Franchises, etc...................................................90
6.20 Solvency...................................................................90
6.21 Location of Assets.........................................................90
6.22 D/B/A or Trade Names.......................................................91
6.23 No Employee Disputes.......................................................91
6.24 Brokers' Fees..............................................................91
6.25 Labor Matters..............................................................91
6.26 Status of Accounts.........................................................91
6.27 Trade Suppliers............................................................92
6.28 Key Members of Management..................................................92
6.29 Accuracy and Completeness of Information...................................92
ARTICLE VII AFFIRMATIVE COVENANTS...........................................................93
7.1 Information Covenants......................................................93
7.2 Preservation of Existence and Franchises...................................96
7.3 Books and Records..........................................................96
7.4 Compliance with Law........................................................96
7.5 Payment of Taxes and Other Indebtedness....................................96
7.6 Insurance; Casualty Loss...................................................97
7.7 Maintenance of Property....................................................98
7.8 Performance of Obligations.................................................98
7.9 ERISA......................................................................99
7.10 Use of Proceeds............................................................99
7.11 Additional Subsidiaries...................................................100
7.12 Audits/Inspections........................................................100
7.13 Inventory.................................................................101
7.14 Collateral Records........................................................101
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7.15 Security Interests........................................................101
7.16 Schedules of Accounts and Purchase Orders.................................102
7.17 Collection of Accounts....................................................102
7.18 Notice; Credit Memoranda; and Returned Goods..............................103
7.19 Acknowledgment Agreements.................................................103
7.20 Trademarks................................................................103
7.21 Priority of Liens........................................................104
ARTICLE VIII FINANCIAL COVENANTS...........................................................104
8.1 Fixed Charge Coverage Ratio...............................................104
8.2 Capital Expenditures......................................................104
8.3 Minimum Consolidated EBITDA...............................................104
8.4 Minimum Excess Availability...............................................105
ARTICLE IX NEGATIVE COVENANTS..............................................................105
9.1 Indebtedness..............................................................105
9.2 Liens.....................................................................106
9.3 Nature of Business........................................................106
9.4 Consolidation or Merger...................................................107
9.5 Sale or Lease of Assets...................................................107
9.6 Acquisitions..............................................................107
9.7 Transactions with Affiliates..............................................107
9.8 Ownership of Subsidiaries.................................................107
9.9 Fiscal Year...............................................................108
9.10 Investments...............................................................108
9.11 Restricted Payments.......................................................108
9.12 No Additional Bank Accounts...............................................108
9.13 Amendments of Organizational Documents....................................108
9.14 Additional Negative Pledges...............................................109
9.15 Other Indebtedness........................................................109
9.16 Licenses, Etc.............................................................109
9.17 Limitations...............................................................109
ARTICLE X POWERS...........................................................................110
10.1 Appointment of Administrative Agent as Attorney-in-Fact...................110
10.2 Limitation on Exercise of Power...........................................111
10.3 Canadian Agent............................................................111
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES..................................................111
11.1 Events of Default.........................................................111
11.2 Acceleration; Remedies....................................................113
11.3. Conversion and Redenomination Certain Loans; Purchase of
Risk Participations.......................................................114
ARTICLE XII TERMINATION....................................................................115
ARTICLE XIII THE AGENTS....................................................................116
13.1 Appointment...............................................................116
13.2 Delegation of Duties......................................................116
13.3 Exculpatory Provisions....................................................117
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13.4 Reliance on Communications................................................117
13.5 Notice of Default.........................................................118
13.6 Non-Reliance on Agents and Other Lenders..................................118
13.7 Indemnification...........................................................118
13.8 Agent in its Individual Capacity..........................................119
13.9 Successor Agent...........................................................119
13.10 Collateral Matters........................................................120
13.11 Rights and Remedies to be Exercised by Agent Only.........................121
ARTICLE XIV MISCELLANEOUS..................................................................122
14.1 Notices...................................................................122
14.2 Right of Set-Off..........................................................122
14.3 Benefit of Agreement......................................................122
14.4 No Waiver; Remedies Cumulative............................................125
14.5 Payment of Expenses; Indemnification......................................125
14.6 Amendments, Waivers and Consents..........................................126
14.7 Defaulting Lender.........................................................127
14.8 Counterparts..............................................................127
14.9 Headings..................................................................127
14.10 Survival of Indemnification and Representations and Warranties............127
14.11 Currency..................................................................127
14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE..........................128
14.13 Arbitration...............................................................128
14.14 Waiver of Jury Trial......................................................130
14.15 Severability..............................................................130
14.16 Loan Entirety.............................................................130
14.17 Binding Effect; Amendment and Restatement of Existing Credit
Agreement; Further Assurances.............................................130
14.18 Confidentiality...........................................................131
14.19 Judgment Currency.........................................................131
14.20 Maximum Rate..............................................................132
14.21 Concerning Joint and Several Liability of the U.S. Borrowers..............133
14.22 Concerning Joint and Several Liability of the Canadian Borrowers..........135
14.23 Nonliability of Agents and Lenders........................................138
14.24 Independent Nature of Lenders' Rights.....................................138
14.25 Power of Attorney.........................................................138
14.26 Choice of Language........................................................139
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Guaranty Agreement
Exhibit C Form of Landlord Agreement
Exhibit D Form of Notice of Borrowing/Continuation/Conversion
Exhibit E [Intentionally Omitted]
Exhibit F Form of Revolving Credit Note
Exhibit G Form of Bankers' Acceptance Notice
Exhibit H-1 Form of U.S. Security Agreement
Exhibit H-2 Form of Canadian Security Agreement
Exhibit H-3 Form of U.S. Pledge Agreement
Exhibit H-4 Form of Canadian Hypothec
Exhibit I-1 Form of Lockbox Agreement
Exhibit I-2 Form of Lockbox Letter
Exhibit I-3 Form of Blocked Account Agreement
Exhibit J Form of Borrowing Base Certificate
Exhibit K Form of Solvency Certificate
Exhibit L Form of Compliance Certificate
Exhibit M Form of Assignment and Acceptance
Exhibit N Form of Joinder Agreement
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Eligible Inventory Locations
Schedule 1.1C Investments
Schedule 1.1D Liens
Schedule 1.1E Existing Letters of Credit
Schedule 5.1(n) Corporate Structure
Schedule 6.1 Jurisdictions of Organization
Schedule 6.2 Authorization
Schedule 6.9 Indebtedness
Schedule 6.10 Litigation
Schedule 6.15 Subsidiaries
Schedule 6.18 Hazardous Substances
Schedule 6.21 Collateral Locations
Schedule 6.22 Fictitious Business Names
Schedule 6.27 Trade Suppliers
Schedule 6.28 Key Members of Management
Schedule 7.6 Insurance
Schedule 9.5 Permitted Asset Dispositions
Schedule 9.12 Bank Accounts
Schedule 14.1 Addresses for Notices
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of March 27, 2002, among
WOLVERINE TUBE, INC., a Delaware corporation (the "Company"), its U.S. and
Canadian Subsidiaries identified as Subsidiary Borrowers on the signature pages
hereto and any additional U.S. or Canadian Subsidiaries of the Company which
become parties hereto in accordance with the terms hereof (collectively referred
to as the "Subsidiary Borrowers" or individually referred to as a "Subsidiary
Borrower") (hereinafter, the Company and the Subsidiary Borrowers are
collectively referred to as the "Borrowers" or individually referred to as a
"Borrower"), each of the financial institutions identified as Lenders on
Schedule 1.1A hereto (together with each of their successors and assigns,
referred to individually as a "Lender" and, collectively, as the "Lenders"),
WACHOVIA BANK, N.A. ("Wachovia"), acting in the manner and to the extent
described in Article XIII hereof (in such capacity, the "Administrative Agent")
and CONGRESS FINANCIAL CORPORATION (CANADA) acting in the manner and to the
extent described in Article XIII hereof (in such capacity, the "Canadian
Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a revolving credit facility to
provide for the working capital, letter of credit and general corporate needs of
the Borrowers; and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances to the Borrowers;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrowers, the Lenders, the
Administrative Agent and the Canadian Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Acceptance Fee" means, in respect of a particular Bankers' Acceptance
accepted by a Canadian Lender, an amount equal to the product of (a) the
Applicable Percentage for Eurodollar Loans and Bankers' Acceptances as at the
date of acceptance of such Bankers' Acceptance; (b) the aggregate Face Amount of
such Bankers' Acceptance; and (c) a fraction (i) the numerator of which is the
number of days in the term of such Bankers' Acceptance, and (ii) the denominator
of which is the number of days in the then current calendar year.
"Accounts" means all of each Credit Party's "accounts" (as defined in
the UCC or the PPSA, as applicable), whether now existing or existing in the
future, and shall include (whether or not otherwise included in such
definitions, and without limiting the generality thereof), all (i) accounts
receivable (whether or not specifically listed on schedules furnished to the
Administrative Agent), including, without limitation, all accounts created by or
arising from all of each Credit Party's sales of goods or rendition of services
made under any of each Credit Party's trade names or styles, or through any of
each Credit Party's divisions; (ii) unpaid seller's rights (including
rescission, replevin, reclamation and stopping in transit) relating to the
foregoing or arising therefrom, (iii) rights to any goods represented by any of
the foregoing, including returned or repossessed goods; (iv) reserves and credit
balances held by each Credit Party with respect to any such accounts receivable
or account debtors; (v) guarantees or collateral for any of the foregoing; and
(vi) insurance policies or rights relating to any of the foregoing.
"Acknowledgment Agreements" means (i) the acknowledgment agreements,
substantially in the form of Exhibit A hereto, between each Credit Party's
warehousemen, fillers, packers, processors and mortgagees and the Administrative
Agent, in each case acknowledging and agreeing, among other things, (A) that
such warehousemen, fillers, packers, processors and mortgagees waive any Liens
on any of the Collateral of any Credit Party and (B) to the collateral
assignment by each Credit Party to the Administrative Agent of each such Credit
Party's interest in the contracts with each of such warehousemen, fillers,
packers, processors and mortgagees and (ii) Landlord Agreements.
"Acquired Company" means any Person (or assets thereof) which is
acquired pursuant to an Acquisition.
"Acquisition" means the acquisition of (a) all of the capital stock of
another Person or (b) all or substantially all of the assets of another Person.
"Adjusted Eurodollar Rate" means the Eurodollar Rate, plus the
Applicable Percentage.
"Administrative Agent" means Wachovia Bank, N.A.
"Administrative Agent Fee Letter" means the letter agreement, dated as
of March 14, 2002, among the Company, the Administrative Agent and First Union
Securities, Inc. d/b/a Wachovia Securities, as amended, modified and replaced
from time to time.
"Affiliate" of any Person means any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such
Person), controlled by or under direct or indirect common control with such
Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power (a) to vote fifteen percent (15%)
or more of the securities having ordinary voting power for the election of
directors of such corporation or (b) to direct or cause direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agents" means the Administrative Agent and the Canadian Agent.
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"Applicable BA Discount Rate" means with respect to any Canadian Lender
named on Schedule I to the Bank Act (Canada) (a "Schedule I Bank"), as
applicable to a Bankers' Acceptance being purchased by such Lender on any day,
the respective percentage discount rate per annum for a Canadian Dollar bankers'
acceptance for the term and face amount comparable to the term and face amount
of such Bankers' Acceptance that appears on the Reuters Screen CDOR Page as of
10:00 a.m., Toronto, Ontario time, on the date of determination as reported by
the Canadian Agent; provided, however, that (a) if the Canadian Lender is not a
Schedule I Bank or (b) if on such day no rate appears on the Reuters Screen CDOR
Page as contemplated, the rate for such day shall be the average (as calculated
by the Canadian Agent) of the respective percentage discount rates (expressed to
two decimal places and rounded upward, if necessary, to the nearest 1/100th of
1%) quoted to the Canadian Agent by each of the five largest Canadian chartered
banks named on Schedule I to the Bank Act (Canada) (each a "Schedule I Reference
Bank") as the percentage discount rate at which such Schedule I Reference Bank
would, in accordance with its normal practices, at or about 10:00 a.m., Toronto,
Ontario time, on such day, be prepared to purchase bankers' acceptances accepted
by such Schedule I Reference Bank having a term and a face amount comparable to
the term and face amount of such Bankers' Acceptance.
"Applicable Percentage" means for purposes of calculating the
applicable interest rate for any day for (i) Eurodollar Loans, Bankers'
Acceptances, Letter of Credit Fees, the applicable percentage shall be 2.50%,
(ii) Base Rate Loans, the applicable percentage shall be 1.00% and (iii) Unused
Fees, the applicable percentage shall be 0.50%.
"Asset Disposition" means the disposition of any or all of the Accounts
or Inventory of a Credit Party whether by sale, lease, transfer or otherwise,
other than (a) sales of Inventory in the ordinary course of business and (b)
transfers of Accounts or Inventory among the Credit Parties.
"BA Discount Proceeds" means proceeds in respect of any Bankers'
Acceptance to be purchased on any day under Section 2.5(b), in an amount
(rounded to the nearest whole Canadian cent, and with one-half of one Canadian
cent being rounded up) calculated on such day by dividing:
(a) the Face Amount of such Bankers' Acceptance; by
(b) the sum of one plus the product of:
(i) the Applicable BA Discount Rate (expressed as a
decimal) applicable to such Bankers' Acceptance; and
(ii) a fraction, the numerator of which is the number
of days in the term of such Bankers' Acceptance and the
denominator of which is the number of days in the then current
calendar year;
with such product being rounded up or down to the fifth
decimal place and .000005 being rounded up to .00001.
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"BA Documents" means with respect to any Bankers' Acceptance, such
documents and agreements as the Canadian Lenders accepting the same may require
in connection with the creation of such Bankers' Acceptance.
"BA Obligations" means all obligations of the Canadian Borrowers with
respect to Bankers' Acceptances created under the Canadian Revolving Loan
Commitment.
"Bankers' Acceptance" means a depository xxxx as defined in the
Depository Bills and Notes Act (Canada) in Canadian Dollars that is in the form
of an order signed by the Canadian Borrowers and accepted by a Canadian Lender
pursuant to this Credit Agreement or, for Lenders not participating in clearing
services contemplated in that Act, a draft or xxxx of exchange in Canadian
Dollars payable in Canada that is drawn in Canada by the Canadian Borrowers and
accepted by a Canadian Lender pursuant to this Credit Agreement. Orders that
become depository bills, drafts and bills of exchange are sometimes collectively
referred to in this Credit Agreement as "orders".
"Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following with respect to such Person: (a) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its property
or ordering the winding up or liquidation of its affairs; or (b) any proceeding
shall be instituted against such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property including, but not limited to, an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against a Person and any such proceeding or petition remains unstayed
and in effect for a period of sixty (60) consecutive days; or (c) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or any substantial
part of its property or make any general assignment for the benefit of
creditors; or (d) such Person shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts generally as
they become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.
"Base Rate Loans" means all Loans accruing interest based on the U.S.
Base Rate, the CA U.S. Base Rate or the Canadian Prime Rate.
"Blocked Account Agreement" means a three party agreement among the
Administrative Agent or the Canadian Agent, the applicable depository bank and a
Credit Party in the form of Exhibit I-3 hereto.
"Borrower" means any of the U.S. Borrowers or the Canadian Borrowers.
4
"Borrowers" means the U.S. Borrowers and the Canadian Borrowers.
"Borrowing Base Certificate" means such term as defined in Section
7.1(i).
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday in Charlotte, North Carolina, Atlanta, Georgia, New York, New York or
Toronto, Ontario or a day on which banking institutions located in Charlotte,
North Carolina, Atlanta, Georgia, New York, New York or Toronto, Ontario are
authorized by law or other governmental actions to close; except that in the
case of Eurodollar Loans, a Business Day shall also be a day on which dealings
between banks are carried on in U.S. dollar deposits in the London interbank
Eurodollar market.
"CA U.S. Base Rate" means the higher of (a) the Federal Funds Rate plus
0.5% or (b) the CA U.S. Prime Rate; provided, however, that if, in the
reasonable judgment of the Canadian Agent, the Federal Funds Rate cannot be
determined, then the CA U.S. Prime Rate shall apply until the circumstances
giving rise to such inability to determine the Federal Funds Rate no longer
exist. Any change in the CA U.S. Base Rate due to a change in the CA U.S. Prime
Rate or the Federal Funds Rate shall be effective as of the opening of business
on the effective day of such change in the CA U.S. Base Rate or the Federal
Funds Rate, respectively.
"CA U.S. Base Rate Loans" means Revolving Loans made by the Canadian
Lenders in U.S. Dollars accruing interest based on the CA U.S. Base Rate.
"CA U.S. Prime Rate" means, for any day, the fluctuating rate of
interest per annum publicly announced by the Bank of Montreal as its "prime
rate" or "reference rate" for loans made in U.S. dollars, which rate is not
necessarily the best or lowest rate of interest offered for loans in U.S.
dollars by the Bank of Montreal.
"Canadian Agent" or "CA" means Congress Financial Corporation (Canada).
"Canadian Base Rate Loans" means, collectively, CA U.S. Base Rate Loans
and Canadian Prime Rate Loans.
"Canadian Borrowers" means 1105836 Ontario Inc., Wolverine Joining
Technologies (Canada), Inc., 1263143 Ontario Inc., 1158909 Ontario Inc.,
Wolverine Tube (Canada) Inc. and such other Persons organized under the laws of
Canada or any province thereof, and resident in Canada or any province thereof,
that become parties hereto pursuant to Joinder Agreements in accordance with
Section 7.11.
"Canadian Borrowing Base" means a U.S. dollar amount equal to the sum
of (a) an amount up to 85% of Eligible Accounts Receivable of the Canadian
Credit Parties, plus (b) an amount up to 60% of Eligible Inventory of the
Canadian Credit Parties consisting of raw materials and finished goods
inventory; provided, however, so long as the public service workers in the
province of Ontario are on strike and the Canadian Agent is prohibited from
determining whether it shall receive or whether it has obtained a first
priority, perfected security interest in the Canadian Collateral, the Canadian
Borrowing Base shall mean a U.S. dollar amount equal to (a)
5
the sum of (i) an amount up to 85% of Eligible Accounts Receivable of the
Guarantors, plus (ii) an amount up to 60% of Eligible Inventory of the
Guarantors consisting of raw materials and finished goods inventory minus (b)
the sum of the aggregate amount of U.S. Revolving Loans outstanding plus U.S.
LOC Obligations.
"Canadian Cash Collateral Account" means any account established and
maintained in the name of the Canadian Borrowers at The Bank of Nova Scotia,
with the Canadian Agent named as secured party thereon, into which funds
transferred from any Canadian Lockbox will be deposited.
"Canadian Collateral" means any and all assets and rights and interests
in or to property of the Canadian Credit Parties pledged from time to time as
security for the Canadian Obligations pursuant to the Security Documents whether
now owned or hereafter acquired, including, without limitation, all of the
Accounts and Inventory of the Canadian Credit Parties, any Chattel Paper,
Documents or Instruments evidencing or relating to such Accounts or Inventory,
Deposit Accounts and all Proceeds thereof, as defined in the Canadian Security
Agreement.
"Canadian Credit Parties" means the Canadian Borrowers.
"Canadian Dollars" and "C$" mean dollars in the lawful currency of
Canada.
"Canadian Hypothec" means the Deed of Hypothec made by the Canadian
Credit Parties in favor of the Administrative Agent in the form attached hereto
as Exhibit H-3.
"Canadian Lenders" means Congress Financial Corporation (Canada), and
such other Lenders permitted under Canadian law to carry on business in Canada
as may be added as Canadian Lenders in accordance with the terms of this
Agreement, each of whom is either resident in Canada for the purposes of the
Income Tax Act (Canada) or an authorized foreign bank for the purposes of the
Bank Act (Canada) for which the Canadian Obligations are in respect of its
Canadian banking business for purposes of subsection 212(13.3) of the Income Tax
Act (Canada).
"Canadian Letter of Credit" means a Letter of Credit issued under the
Canadian LOC Facility, as referenced in Section 2.4(a).
"Canadian LOC Obligations" means LOC Obligations relating to Canadian
Letters of Credit.
"Canadian LOC Facility" means the Letter of Credit facility established
pursuant to Section 2.4.
"Canadian Maturity Date" means the date 364 days following the Closing
Date.
"Canadian Obligations" means the Obligations of the Canadian Borrowers.
6
"Canadian Prime Rate" means, at any time, the greater of (i) the rate
from time to time publicly announced by the Bank of Montreal as its prime rate
in effect for determining interest rates on Canadian Dollar denominated
commercial loans in Canada, and (ii) the annual rate of interest equal to the
sum of (A) the CDOR Rate at such time and (B) one (1%) percent per annum.
"Canadian Prime Rate Loans" means Revolving Loans made by the Canadian
Lenders in Canadian Dollars accruing interest based on the Canadian Prime Rate.
"Canadian Revolving Loan Commitment" means $7,500,000 (U.S.), or its
equivalent as determined from time to time in Canadian Dollars, as such amount
may be reduced in accordance with Section 2.10.
"Canadian Revolving Loan Commitment Percentage" means, for each
Canadian Lender, the percentage identified as its Canadian Revolving Loan
Commitment Percentage opposite such Canadian Lender's name on Schedule 1.1A as
such percentage may be modified by assignment in accordance with the terms of
this Agreement.
"Canadian Revolving Loans" means the revolving loans made by the
Canadian Lenders to the Canadian Borrowers pursuant to Section 2.3.
"Canadian Security Agreement" means the Security Agreement, of even
date herewith, among the Canadian Agent, the Administrative Agent and the
Canadian Credit Parties, in the form attached hereto as Exhibit H-2.
"Canadian Subsidiary" means any direct or indirect Subsidiary of the
Canadian Borrowers which is incorporated or organized under the laws of Canada.
"Canadian Unutilized Revolving Commitment" means, for any period, the
amount by which (a) the then applicable Canadian Revolving Loan Commitment
exceeds (b) the daily average sum for such period of the outstanding aggregate
principal amount of all Canadian Revolving Loans, Canadian LOC Obligations and
BA Obligations.
"Capital Expenditures" means any current expenditure by the
Consolidated Parties for fixed or capital assets as reflected on the financial
statements of the Consolidated Parties, as prepared in accordance with U.S.
GAAP.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other equity interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued directly or fully
guaranteed or insured by the United States of America or Canada or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America or Canada is pledged in support thereof) having
7
maturities of not more than one year from the date of acquisition, (b) U.S. or
Canadian dollar denominated time deposits and certificates of deposit of (i) any
U.S. or Canadian commercial bank of recognized standing having capital and
surplus in excess of $100,000,000 or (ii) any bank whose short-term commercial
paper rating from Standard & Poor's Corporation ("S&P") is at least A-1 or the
equivalent thereof or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at
least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than one year from the date of
acquisition, (c) Bankers' Acceptances accepted by any Approved Bank, (d)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any U.S. or Canadian corporation to the extent that such paper or
notes are rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the
equivalent thereof) or better by Moody's and maturing within one year of the
date of acquisition and (e) repurchase agreements with a bank or trust company
or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America or Canada in which a Credit Party shall have a perfected first
priority security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations.
"Cash Dominion Period" means (i) any period beginning on the date an
Event of Default shall have occurred (beyond the expiration of the applicable
grace or cure period) and continuing until such Event of Default has been waived
by the Required Lenders or (ii) any period beginning on the date on which the
Credit Parties shall have Excess Availability of less than $5,000,000 and
continuing until such date following ninety (90) consecutive days on which the
Credit Parties shall have had Excess Availability of greater than $5,000,000.
"Cash Management Products" means any one or more of the following types
of services or facilities extended to the Borrowers by any Lender or any
Affiliate of a Lender in reliance on such Lender's agreement to indemnify such
Affiliate: (i) ACH transactions; (ii) cash management, including controlled
disbursement services; and (iii) establishing and maintaining deposit accounts.
"Casualty Loss" means such term as defined in Section 7.6.
"CDOR Rate" means, on any day, the annual rate of interest which is the
rate based on an average 30 day rate applicable to Canadian Dollar bankers'
acceptances appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swap Dealer Association, Inc., definitions, as modified and
amended from time to time) as of 10:00 a.m. on such day; provided, that if such
rate does not appear on the Reuters Screen CDOR Page as contemplated, then the
CDOR Rate on any day shall be the 30 day rate applicable to Canadian Dollar
bankers' acceptances quoted by the Bank of Montreal or, if the Bank of Montreal
is not quoting such rate, any bank listed in Schedule I of the Bank Act (Canada)
selected by the Canadian Agent as of 10:00 a.m. on such day.
"Change of Control" means the occurrence of any of the following
events: (a) the acquisition, directly or indirectly, whether voluntarily or by
operation of law, by any person (as such term in used in Section 13(d) of the
Exchange Act) of (i) beneficial ownership of a sufficient portion of the voting
power of the outstanding Voting Stock of the Company to elect a majority
8
of the Board of Directors of the Company (the "Board") (either immediately or
upon the expiration of their respective current terms) pursuant to a transaction
that is not approved by such Board as constituted immediately prior to the
consummation of such transaction or (ii) all or substantially all of the assets
of the Company or (b) except as permitted by Section 9.5 or Section 9.8, the
Company shall fail to own, directly or indirectly, 100% of the outstanding
shares of Capital Stock of the other Credit Parties or (c) the occurrence of a
"Change of Control" under the 2008 Note Indenture, the 2008 Senior Notes, or
other documents evidencing the 2008 Senior Notes or (d) the occurrence of a
"Change of Control" under the 2009 Senior Note Indenture, the 2009 Senior Notes,
or other documents evidencing the 2009 Senior Notes.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" means collectively, the U.S. Collateral and the Canadian
Collateral.
"Commitments" means the U.S. Revolving Loan Commitment and the Canadian
Revolving Loan Commitment.
"Commitment Percentage" means, with respect to any Lender, at any time
after the Commitments have terminated, the percentage which such Lender's Credit
Exposure constitutes of the aggregate principal amount of all Loans, LOC
Obligations and BA Obligations then outstanding under this Credit Agreement.
"Commitment Termination Event" means such term as defined in Section
11.3.
"Company" has the meaning set forth in the introductory paragraph
hereof.
"Consolidated Cash Interest Expense" means, for any period, whether
expensed or capitalized, all cash interest expense of the Consolidated Parties
for such period, net of interest income for such period, all as determined in
accordance with U.S. GAAP.
"Consolidated Cash Taxes" means, for any applicable period of
computation, the aggregate of all taxes of the Consolidated Parties determined
in accordance with applicable law and U.S. GAAP applied on a consistent basis,
to the extent the same are paid in cash during such period.
"Consolidated EBITDA" means, for any applicable period of computation,
without duplication, the sum of (i) Consolidated Net Income for such period, but
excluding therefrom all extraordinary items of income or loss, plus (ii) the
aggregate amount of depreciation and amortization charges made in calculating
Consolidated Net Income for such period, plus (iii) aggregate Consolidated
Interest Expense for such period, plus (iv) the aggregate amount of all income
taxes reflected on the consolidated statements of income of the Consolidated
Parties for
9
such period. Except as otherwise provided herein, the applicable period of
computation shall be for the four (4) consecutive quarters ending as of the date
of determination.
"Consolidated Fixed Charges" means, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Cash Interest
Expense for the applicable period plus (ii) cash dividends paid by the Company
for the applicable period plus (iii) all Consolidated Scheduled Funded Debt
Payments for the applicable period.
"Consolidated Funded Debt" means, as of the date of determination, all
Funded Debt of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with US GAAP.
"Consolidated Interest Expense" means, for any period, whether expensed
or capitalized, all interest expense of the Consolidated Parties for such
period, net of interest income for such period, all as determined in accordance
with U.S. GAAP.
"Consolidated Parties" means the Company and all of its consolidated
Subsidiaries whether direct or indirect and whether now owned or hereafter
acquired.
"Consolidated Net Income" means, for any period, the net income after
taxes of the Consolidated Parties for such period, as adjusted for (i) non-cash
adjustments to Consolidated Net Income due to the effect of changes in
accounting methods required by U.S. GAAP and (ii) adjustments to Consolidated
Net Income on account of the discontinuation of the operations of Wolverine
Ratcliffs, Inc. with respect to the 2002 fiscal year in an amount not to exceed
$7,500,000, as determined in accordance with U.S. GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of the end of
each fiscal quarter of the Company and its consolidated Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal on
Consolidated Funded Debt (other than intercompany Indebtedness) for the four (4)
consecutive quarters beginning on such date (including the principal component
of payments due on Capital Leases or under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product during the applicable period beginning on such date).
"Conversion Date" means such term as defined in Section 11.3.
"Credit Agreement" or "Agreement" means this credit agreement, dated as
of the date hereof, as the same may be modified, amended, extended, restated or
supplemented from time to time.
"Credit Documents" means this Credit Agreement, the Revolving Credit
Notes, the LOC Documents, the BA Documents, the Guaranty Agreements, the
Security Documents and all other documents and instruments executed or delivered
in connection therewith, as the same may be modified, amended, extended,
restated or supplemented from time to time.
"Credit Exposure" means such term as defined in the definition of
Required Lenders.
10
"Credit Parties" means, collectively, the U.S. Credit Parties and the
Canadian Credit Parties and "Credit Party" means any one of them.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) has failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Agreement, (b) has failed to pay to the
Administrative Agent, the Canadian Agent or any Lender an amount owed by such
Lender pursuant to the terms of this Agreement or (c) has become insolvent or
has become subject to a receiver, trustee or similar official.
"DOL" means the U.S. Department of Labor and any successor department
or agency.
"Effective Date" means the date on which all of the conditions set
forth in Section 5.1 have been fulfilled or waived by the Lenders.
"Eligible Accounts Receivable" means the aggregate face amount of the
Credit Parties' Accounts that conform to the warranties contained herein, less
the aggregate amount of all returns, discounts, claims, credits, charges
(including warehousemen's charges) and allowances of any nature (whether issued,
owing, granted or outstanding). Unless otherwise approved in writing by the
Administrative Agent, no Account, without duplication, shall be deemed to be an
Eligible Account Receivable if:
(i) it arises out of a sale made by any Credit Party to an
Affiliate; or
(ii) the Account is unpaid more than one hundred and twenty
(120) days after the original invoice date or more than sixty (60) days
after the original payment due date; or
(iii) such Account is from the same account debtor (or any
affiliate thereof) and twenty-five percent (25%) or more, in face
amount, of all Accounts from such account debtor (or any affiliate
thereof) are due or unpaid more than one hundred and twenty (120) days
after the original invoice date or sixty (60) days after the original
payment due date; or
(iv) (A) the account debtor is also a creditor of any Credit
Party, to the extent of the amount owed by such Credit Party to the
account debtor, (B) the account debtor has disputed its liability on,
or the account debtor has made any claim with respect to, such Account
due from such account debtor to such Credit Party, which has not been
resolved or (C) the Account otherwise is subject to any right of setoff
by the account debtor, to the extent of the amount of such setoff; or
(v) the Account is owing by an account debtor that has
commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter
11
amended, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to such account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or if any other petition or other application for
relief under the federal bankruptcy laws has been filed by or against
the account debtor, or if such account debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a receiver,
trustee, liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or
(vi) the sale is to an account debtor outside the continental
United States or Canada; unless the sale is (A) on letter of credit,
guaranty or acceptance terms, or subject to credit insurance, in each
case acceptable to the Administrative Agent in its reasonable
discretion (such Accounts supported by guaranty or acceptance terms or
credit insurance not to exceed more than $5,000,000 of aggregate
Eligible Account Receivable), (B) is to The Trane Company, Carrier
Corporation, York International or Whirlpool Corporation (or any
foreign equivalents) in an aggregate amount not to exceed $3,000,000 at
any time; provided, however, it is understood and agreed that any
allowance pursuant to this subclause (B) is subject to modification
and/or adjustment (increase or decrease) in whole or in part at the
sole reasonable discretion of the Administrative Agent or (C) otherwise
approved by and acceptable to the Administrative Agent in its
reasonable discretion; or
(vii) the sale to the account debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis
or made pursuant to any other written agreement providing for
repurchase or return (other than repuchases or returns for defective or
nonconforming goods); or
(viii) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless the
applicable Credit Party duly assigns its rights to payment of such
Account to the Administrative Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C.ss.3727 et seq.); or
(ix) the account debtor is the government of Canada or any
department, agency or instrumentality thereof to which Part VII of the
Financial Administration Act (Canada) applies, or the government of a
province or territory of Canada (or any department, agency or
instrumentality thereof) in which legislation is in force which limits
or restricts the assignment of Crown debts, unless the applicable
Borrower has complied with the provisions of such Part (or such
legislation, as the case may be) in respect of the assignment of such
Account to the Administrative Agent; or
(x) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or its
designee or the services giving rise to such Account have not been
performed by or on behalf of the applicable Credit Party and accepted
by the account debtor or its designee or the Account otherwise does not
represent a final sale; or
12
(xi) such Credit Party is not able to bring suit or otherwise
enforce its remedies against the account debtor of such Account through
judicial process; or
(xii) that is an obligation for which the total unpaid
accounts of the account debtor to the Consolidated Parties exceed 15%
of the aggregate of all Accounts of the Credit Parties, to the extent
of such excess; or
(xiii) that represents interest payments, late or finance
charges, or service charges owing to such Credit Party; or
(xiv) which is in a currency other than U.S. dollars or
Canadian Dollars; provided, however, with respect to Accounts due from
The Trane Company, Carrier Corporation, York International or Whirlpool
Corporation (or any foreign equivalents), such Accounts may be in
Euros; or
(xv) that is not otherwise acceptable in the good faith
discretion of the Administrative Agent; or
(xvi) the Administrative Agent does not have a first priority,
perfected security interest in the Account.
"Eligible Assignee" means (a) any Lender or Affiliate or subsidiary of
a Lender and (b) any other commercial bank, financial institution, institutional
lender or "accredited investor" (as defined in Regulation D of the Securities
and Exchange Commission (other than a natural Person)) with a net worth of at
least $2,000,000,000; provided, that, in the case of the Canadian Loans and
other Canadian Obligations, (i) prior to an Event of Default, any such Lender
shall also be either resident in Canada for the purposes of the Income Tax Act
(Canada) or an authorized foreign bank for the purposes of the Bank Act (Canada)
for which the Canadian Obligations are in respect of its Canadian banking
business for the purposes of subsection 212(13.3) of the Income Tax Act (Canada)
and (ii) after an Event of Default, any such Lender shall be a financial
institution meeting the requirements of clause (a) or (b) hereof, regardless of
residence status.
"Eligible Inventory" means (i) the aggregate gross amount of each
Credit Party's Inventory, valued at cost (on a FIFO basis), which (A) is owned
solely by such Credit Party and with respect to which such Credit Party has
good, valid and marketable title, (B) is stored on property that is either (1)
owned or leased by such Credit Party or (2) owned or leased by a warehouseman
that has contracted with such Credit Party to store Inventory on such
warehouseman's property or by a filler, processor or packer of such Credit Party
(provided that, with respect to Inventory stored on property leased by such
Credit Party, such Credit Party shall have delivered in favor of the
Administrative Agent, an Acknowledgment Agreement from the landlord of such
leased location; (C) is subject to a valid, enforceable and first priority Lien
in favor of the Administrative Agent, except, with respect to Inventory stored
at sites described in clause (B)(2) above for normal and customary warehouseman,
filler, packer and processor charges); (D) is located in the United States or
Canada; and (E) is not obsolete or slow moving, and which otherwise conforms to
the warranties contained herein, less (ii) markdown reserves, less (iii) any
goods returned or rejected by such Credit Party's customers for which a credit
has
13
not yet been issued and goods in transit to third parties (other than to such
Credit Party's agents, warehouses, fillers, processors or packers that comply
with clause (i)(B)(2) above), less (iv) damaged Inventory, less (v) any
Inventory that is a no charge or sample item, less (vi) packaging supplies, less
(vii) a reserve equal to the amount of all accounts payable of such Credit Party
owed or owing to any filler, packer or processor of such Credit Party, less
(viii) Inventory which is work in process, less (ix) Inventory consisting of MRO
supply parts, less (x) any reserves required by the Administrative Agent in its
reasonable discretion for special order goods and market value declines, and
less (xi) any Inventory which is held by a Credit Party pursuant to consignment,
sale or return, sale on approval or similar arrangement.
"Environmental Laws" means any current or future Requirement of Law of
any Governmental Authority applicable to the Credit Parties pertaining to (a)
the protection of health, safety, and the environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the protection or use
of surface water and groundwater or (d) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling of, or
exposure to, any hazardous or toxic substance or material and includes, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and
Solid Waste Amendments of 1984, 42 USC 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq.,
Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances Control
Act of 1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act, 49 USC
App. 1801 et seq., Occupational Safety and Health Act of 1970, as amended, 29
USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act
of 1974, as amended, 42 USC 300(f) et seq., the Canadian Environmental
Assessment Act, the Canadian Environmental Protection Act, the Environmental
Assessment Act (Ontario), the Environmental Protection Act (Ontario) and all
other applicable Canadian federal or provincial environmental statutes, any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated, which
is under common control with the U.S. Borrowers within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the U.S.
Borrowers and which is treated as a single employer under Sections 414(b) or (c)
of the Code.
"ERISA Event" means (a) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (b) the withdrawal of the U.S. Borrowers or any
ERISA Affiliate from a Multiple Employer Plan during a
14
plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(c) the distribution of a notice of intent to terminate or the actual
termination of a Single Employer Plan or Multi-Employer Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to terminate or
the actual termination of a Single Employer Plan or a Multiemployer Plan by the
PBGC under Section 4042 of ERISA; (e) the termination of, or the appointment of
a trustee to administer, any Single Employer Plan or Multiemployer Plan pursuant
to Section 4042 of ERISA; (f) the complete or partial withdrawal of the U.S.
Borrowers or any ERISA Affiliate from a Multiemployer Plan; (g) the conditions
for imposition of a Lien under Section 302(f) of ERISA exist with respect to any
Single Employer Plan; or (h) the adoption of an amendment to any Single Employer
Plan requiring the application of Section 307 of ERISA.
"Eurodollar Loans" means Loans accruing interest at the Adjusted
Eurodollar Rate. All Eurodollar Loans shall be made in U.S. dollars.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including continuations and
conversions), a per annum interest rate determined pursuant to the following
formula:
Eurodollar Rate = London Interbank Offered Rate
-----------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not a Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Excess Availability" means at any time (a) the lesser of (i) the
aggregate Commitments and (ii) the U.S. Borrowing Base minus (b) (i) the
aggregate amount of Revolving Loans outstanding plus (ii) the LOC Obligations
plus (iii) BA Obligations.
"Existing Letters of Credit" means the existing letters of credit
described by date of issuance, letter of credit number, undrawn amount, name of
beneficiary and date of expiry on Schedule 1.1E.
"Event of Default" means such terms as defined in Section 11.1.
15
"Face Amount" means, in respect of a Bankers' Acceptance, the amount
payable to the holder thereof at maturity.
"Federal Funds Rate" means, for any day, (i) with respect to
Obligations denominated in U.S. Dollars, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve Bank of
New York, or if such rate is not released on any Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by the
Administrative Agent, of the quotations for the day of such transactions,
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it and (ii) with respect to Obligations
denominated in Canadian Dollars, the Bank of Canada overnight rate.
"Financial Statements" means such term as defined in Section 6.6.
"Fixed Charge Coverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated EBITDA less Unfinanced Capital
Expenditures less all Consolidated Cash Taxes paid during the applicable period
to (ii) total Consolidated Fixed Charges. The applicable period of computation
shall be for the four (4) consecutive quarters ending as of the date of
determination, except with respect to the Consolidated Scheduled Funded Debt
Payments component of Consolidated Fixed Charges, which shall be for the four
(4) consecutive quarters beginning as of the date of determination.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Consolidated Parties for borrowed money, (b) the principal
portion of all obligations of the Consolidated Parties under capital leases
(including capital leases incurred in accordance with the terms of Section 9.1),
(c) all commercial letters of credit and the maximum or face amount of all
performance and standby letters of credit issued or bankers' acceptance
facilities created for the account of a member of the Consolidated Parties,
including, without duplication, all unreimbursed draws thereunder, (d) all
Guaranty Obligations of the Consolidated Parties with respect to Funded Debt of
another Person, (e) all Funded Debt of another entity secured by a Lien on any
property of the Consolidated Parties, to the extent of the book value of the
property secured thereby, whether or not such Funded Debt has been assumed by a
member of the Consolidated Parties, (f) all Funded Debt of any partnership or
unincorporated joint venture to the extent a member of the Consolidated Parties
is legally obligated or has a reasonable expectation of being liable with
respect thereto, net of any assets of such partnership or joint venture and (g)
the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product of a member of the Consolidated Parties where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with U.S. GAAP.
"Government Acts" means such term as defined in Section 2.2(k)(i).
"Governmental Authority" means any Federal, State, Provincial, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantor" means any U.S. Borrower.
16
"Guaranty Agreements" means the Guaranty Agreement in the form attached
hereto as Exhibit B executed by the U.S. Borrowers with respect to the
obligations of the Canadian Borrowers and any future Guaranty Agreement executed
in accordance with the terms of this Agreement, as each such Guaranty Agreement
may be amended, modified or replaced from time to time.
"Guaranty Obligations" of any Person means any obligations (other than
(a) endorsements in the ordinary course of business of negotiable instruments
for deposit or collection, (b) obligations arising under the Guaranty Agreements
and (c) obligations arising under guaranties by a Credit Party of another Credit
Party) guaranteeing or intended to guarantee any Indebtedness, leases, dividends
or other obligations of any other Person in any manner, whether direct or
indirect, and including, without limitation, any obligation, whether or not
contingent to, (i) purchase any such Indebtedness or other obligation or any
property constituting security therefor, (ii) advance or provide funds or other
support for the payment or purchase of such indebtedness or obligation or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements), (iii) lease
or purchase property, securities or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation, or (iv) otherwise assure
or hold harmless the owner of such Indebtedness or obligation against loss in
respect thereof.
"Hedging Agreements" means any Interest Rate Protection Agreement or
other interest rate protection agreement, foreign currency exchange agreement,
commodity purchase or option agreement or other interest or exchange rate or
commodity price hedging agreements
"Highest Lawful Rate" means, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of North Carolina (or the law of any
other jurisdiction whose laws may be mandatorily applicable notwithstanding
other provisions of this Credit Agreement and the other Credit Documents), or
under applicable United States or Canadian federal laws which may presently or
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than under North Carolina or such other jurisdiction's law, in any case
after taking into account, to the extent permitted by applicable law, any and
all relevant payments or charges under this Credit Agreement and any other
Credit Documents executed in connection herewith, and any available exemptions,
exceptions and exclusions. Without limiting the generality of the foregoing, in
relation to any amount payable hereunder by any Canadian Borrower or to any
Canadian Lender, "Highest Lawful Rate" shall mean a rate of "interest" on the
"credit advanced", calculated in accordance with the definition of "criminal
rate" (all such terms being used herein as defined by section 347 of the
Criminal Code of Canada or any successor provision in force at the relevant
time) equal to 59%.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person with respect to Funded Debt, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all
17
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person to the extent of the
value of such property (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations, including without limitation intercompany items,
of such Person issued or assumed as the deferred purchase price of property or
services purchased by such Person which would appear as liabilities on a balance
sheet of such Person, (e) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of Property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (f) all Guaranty Obligations of such Person, (g) the principal
portion of all obligations of such Person under (i) capital leases and (ii) any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with U.S. GAAP, (h) all payment obligations of such Person
in respect of Hedging Agreements, (i) the maximum amount of all standby letters
of credit issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date, in cash or other property (other than shares of common
stock or the same class of preferred stock), (k) all other obligations which
would be shown as a liability on the balance sheet of such Person and (l) the
aggregate purchase price paid by third parties for the purchase of the accounts
receivable of such Person subject at such time to a sale of receivables (or
similar transaction) regardless of whether such transaction is effected without
recourse to such Person or in a manner that would not be reflected on the
balance sheet of such Person in accordance with U.S. GAAP. The Indebtedness of
any Person shall include the Indebtedness of any partnership or unincorporated
joint venture but only to the extent such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto; provided, however,
Indebtedness shall not include (i) any accumulated provisions for deferred taxes
or deferred credits reflected as a liability on the balance sheet of such
Person, or (ii) any Indebtedness in respect of which moneys sufficient to pay
and discharge the same in full (either on the expressed date of maturity thereof
or on such earlier date as such indebtedness may be duly called for redemption
and payment) have been deposited with a depository, agency or trustee in trust
for the payment thereof.
"Interest Payment Date" means (a) as to all Loans, other than
Eurodollar Loans, the last day of each month and (b) as to Eurodollar Loans
having an Interest Period of three months or less, the last day of each
applicable Interest Period; provided, that if an Interest Payment Date falls on
a date which is not a Business Day, such Interest Payment Date shall be deemed
to be the next succeeding Business Day, except that in the case of an Interest
Period where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day.
"Interest Period" means, with respect to Eurodollar Loans, a period of
one, two or three month's duration, as the Borrowers may elect from time to
time, commencing, in each case, on the date of the borrowing (or continuation or
conversions thereof); provided, however, (a) if any Interest Period would end on
a day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no
18
Interest Period shall extend beyond the U.S. Maturity Date or Canadian Maturity
Date, as the case may be, and (c) where an Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month in which
the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity purchase or option
agreement or other interest or exchange rate or commodity price hedging
agreements or any other derivative product hedging arrangement between any
Borrower and any Lender, or any affiliate of a Lender.
"Inventory" means all of each Credit Party's inventory, including
without limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Credit Parties'
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale; and (iii) all goods returned to or repossessed by the Credit Parties.
"Investment" means, with respect to any Person, (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness or securities
or otherwise) of assets comprising a business, shares of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of another Person, (b) any deposit with, or advance, loan or other extension of
credit to, such other Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of business) or (c)
any other investment in such other Person, including without limitation, any
Guaranty Obligation for the benefit of such other Person.
"Issuing Lender" means (i) as to the U.S. LOC Subfacility, Wachovia and
(ii) as to the Canadian LOC facility, Congress Financial Corporation (Canada) or
such other Issuing Lender reasonably acceptable to the Company and the
Administrative Agent.
"Issuing Lender Fee" means such term as defined in Section 4.5.
"Joinder Agreement" means the form of Joinder Agreement to be executed
by each new Borrower under the Credit Agreement pursuant to Section 7.11 hereof,
substantially in the form of Exhibit N hereto.
"Landlord Agreement" means a Landlord Lien Waiver Agreement,
substantially in the form of Exhibit C hereto, between a Credit Party's landlord
and the Administrative Agent acknowledging and agreeing, among other things, (i)
that such landlord waives any Liens on any of the Collateral of such Credit
Party and (ii) to permit the Administrative Agent access to the property for the
purposes of exercising its remedies under the applicable Security Agreement.
"Lenders" means U.S. Lenders and Canadian Lenders.
"Letter of Credit" means (a) a Letter of Credit issued for the account
of a U.S. Borrower or one of its U.S. Subsidiaries by the Issuing Lender
pursuant to Section 2.2, as such Letter of Credit may be amended, modified,
extended, renewed or replaced and (b) a Letter of Credit issued for the account
of a Canadian Borrower or one of its Canadian Subsidiaries by the Issuing Lender
pursuant to Section 2.4 as such Letter of Credit may be amended, modified,
extended, renewed or replaced.
19
"Letter of Credit Fee" means such term as defined in Section 4.5.
"Lien" means any mortgage, pledge, hypothecation, collateral
assignment, deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), hypothec, preference, priority, or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any financing or similar statement filed under the Uniform
Commercial Code as adopted and in effect in the relevant jurisdiction, the PPSA,
or other similar recording or notice statute, and any lease in the nature
thereof).
"Loans" means the Revolving Loans.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered thereunder,
and any other agreements, instruments, guarantees or other documents (whether
general in application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned or at risk
or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under all
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Lockbox Agreement" means such term as defined in Section 3.1.
"London Interbank Offered Rate" means, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.
"Material Adverse Effect" means a material adverse effect, after taking
into account any applicable insurance (to the extent the provider of such
insurance has the financial ability to support its obligations with respect
thereto and is not disputing or refusing to acknowledge same), on (a) the
business, assets, operations, prospects or condition (financial or otherwise) of
the Consolidated Parties, taken as a whole, (b) the ability of (i) the U.S.
Borrowers to perform their obligations under
20
this Credit Agreement or any of the other Credit Documents, (ii) the Canadian
Borrowers to perform their obligations under this Credit Agreement or any of the
other Credit Documents, or (iii) the Credit Parties to perform their obligations
under this Agreement or any of the other Credit Documents, (c) the Collateral or
(d) the validity or enforceability of this Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or thereunder
taken as a whole.
"Material Contract" means any contract or other arrangement (other than
any of the Leases or the Credit Documents), whether written or oral, to which
any Credit Party is a party as to which the breach, nonperformance, cancellation
or failure to renew by any party thereto could reasonably be expected to have a
Material Adverse Effect.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan)
which the U.S. Borrowers or any ERISA Affiliate and at least one other employer
other than any U.S. Borrower or any ERISA Affiliate are contributing sponsors.
"Net Proceeds" means all cash proceeds received in connection with an
Asset Disposition, net of (a) the actual cash costs incurred in connection with
and attributable to such Asset Disposition, (b) any tax liability attributable
to such transaction and (c) amounts applied to repayment of Indebtedness (other
than the Obligations) secured by a Permitted Lien on a disposed asset.
"Notes" means the Revolving Credit Notes.
"Notice of Borrowing" means the request by a Borrower for a Revolving
Loan in the form of Exhibit D.
"Notice of Continuation/Conversion" means a request by (a) the U.S.
Borrowers to (i) continue an existing Eurodollar Loan, (ii) convert a U.S. Base
Rate Loan to a Eurodollar Loan, or (iii) convert a Eurodollar Loan to a U.S.
Base Rate Loan or (b) the Canadian Borrowers to (i) continue a maturing Bankers'
Acceptance to a new maturity date, (ii) convert a maturing Bankers' Acceptance
to a Canadian Prime Rate Loan, (iii) convert a Canadian Prime Rate Loan to a
Bankers' Acceptance, (iv) continue an existing Eurodollar Loan, (v) convert a CA
U.S. Base Rate Loan to a Eurodollar Loan or (vi) convert a Eurodollar Loan to a
CA U.S. Base Rate Loan, in the form of Exhibit D.
"Obligations" means the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Borrower, or to
others for any Borrower's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which would be payable as post-petition interest in connection with any
bankruptcy or similar proceeding) and, including, without limitation, any
reimbursement obligation or indemnity of the Borrowers on account of Letters of
Credit and all other LOC Obligations, all BA Obligations, and all indebtedness,
fees, liabilities, guarantees and obligations
21
which may at any time be owing by any Borrower or any other Credit Party to any
Lender in each case pursuant to this Credit Agreement or any other Credit
Document, whether now in existence or incurred by a Borrower or any other Credit
Party from time to time hereafter, whether unsecured or secured by pledge, Lien
upon or security interest in any of a Borrower's or other Credit Party's assets
or property or the assets or property of any other Person, whether such
indebtedness is absolute or contingent, joint or several, matured or unmatured,
direct or indirect and whether such Borrower or other Credit Party is liable to
such Lender for such indebtedness as principal, surety, endorser, guarantor or
otherwise. Obligations shall also include any other indebtedness owing to any
Lender by any Borrower or other Credit Party under this Credit Agreement and the
other Credit Documents, any Borrower's liability to any Lender pursuant to this
Credit Agreement as maker or endorser of any promissory note or other instrument
for the payment of money, any Borrower's or other Credit Party's liability to
any Lender pursuant to this Credit Agreement or any other Credit Document under
any instrument of guaranty or indemnity, or arising under any guaranty,
endorsement or undertaking which any Lender may make or issue to others for any
such Borrower's account pursuant to this Credit Agreement, including any
accommodation extended with respect to applications for Letters of Credit, and
all liabilities and obligations owing from any Borrower to any Lender, or any
affiliate of a Lender, arising under Interest Rate Protection Agreements entered
into for the purpose of hedging interest rate risk under this Credit Agreement
and the other Credit Documents, all liabilities and obligations now or hereafter
arising from or in connection with any Cash Management Products, and all
obligations of the Guarantors to any Lender (or an Affiliate of any Lender) and
the Agent arising under or in connection with the Guaranty Agreement or any
other Credit Document, including, without limitation, the Guaranteed Obligations
(as defined in the Guaranty Agreement).
"Participation Interest" means a participation in Letters of Credit or
LOC Obligations purchased pursuant to Section 2.2 or Section 2.4 or in Loans or
BA Obligations purchased pursuant to Section 4.6 or Section 11.3.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, and any successor thereof.
"Permitted Investments" means:
(a) cash and Cash Equivalents;
(b) money market investment programs that invest exclusively
in Cash Equivalents and that are classified as a current asset in
accordance with U.S. GAAP and that are administered by broker-dealers
reasonably acceptable to the Administrative Agent;
(c) Investments of a Credit Party into another Credit Party;
(d) loans or advances in the usual and ordinary course of
business to officers, directors and employees for expenses incidental
to carrying on the business of the Credit Parties, including, without,
limitation, relocation and other reasonable expenses associated with
employee compensation and perquisites;
22
(e) accounts receivable arising from the sale of goods and
services in the ordinary course of business of the Credit Parties;
(f) stock or securities received in settlement of debts
(created in the ordinary course of business) owing to a Credit Party;
(g) Investments existing on the Closing Date and set forth on
Schedule 1.1C attached hereto;
(h) loans to officers and employees of the Company to purchase
the Capital Stock of the Company in an amount up to $1,000,000 in the
aggregate at any time outstanding;
(i) transactions permitted pursuant to Section 9.10;
(j) promissory notes issued as consideration in connection
with asset sales permitted hereunder;
(k) Investments by the Credit Parties in their direct or
indirect Subsidiaries which are not Credit Parties, in an amount up to
$5,000,000 in the aggregate at any time outstanding;
(l) Investments by Wolverine Tube (Canada) Inc. ("WTIC") in an
amount not to exceed C$2,200,000 to buy Ratcliffs-Severn Ltd.'s ("RSL")
interest in Wolverine Ratcliffs, Inc. ("WRI"); provided, that (i) WRI
will call indebtedness (approximately C$2,200,000) owed to it by RSL,
(ii) RSL will pay the indebtedness with the funds it will receive from
WTIC, (iv) Xxxxxx-Xxxxx'x interest in RSL will be redeemed in
satisfaction of an outstanding note, (v) WRI will use the proceeds
received from RSL to fund a severance package (approximately $700,000)
and pay the remainder to WTIC to partially satisfy the Indebtedness
owed by WRI;
(m) Investments consisting of prepayments, redemptions or
purchases of the 2009 Senior Notes permitted under Section 9.15(b);
(n) Investments consisting of any sale, disposition or
transfer of assets of WRI to any Credit Party permitted under Section
9.5(c);
(o) Investments in Hedging Agreements permitted under Section
9.1(a); and
(p) such other Investments as the Administrative Agent and the
Required Lenders may approve in their reasonable discretion.
"Permitted Liens" means:
(a) Liens in favor of the Lenders pursuant to any Credit
Document or any Interest Rate Protection Agreement;
23
(b) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with U.S. GAAP have been established;
(c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmen's, mechanics',
warehousemen's, supplier's or vendor's and other like Liens provided
that such Liens secure only amounts not yet due and payable or if
overdue are being contested in good faith by appropriate actions or
proceedings and adequate reserves have been established;
(d) pledges or deposits made to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social
security programs;
(e) Liens arising from good faith deposits in connection with
or to secure performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (other than obligations in respect of the
payment of borrowed money);
(f) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not impairing, in any material respect,
the use of such property for its intended purposes or interfering, in
any material respect, with the ordinary conduct of business of the
Credit Parties;
(g) Liens securing purchase money indebtedness (it being
understood for the purposes of this Agreement that conditional sales
contracts shall constitute purchase money indebtedness) permitted by
Section 9.1(d);
(h) Liens existing on property or assets of any Consolidated
Party as of the date of this Agreement and disclosed on Schedule 1.1D;
provided that the Liens set forth on Schedule 1.1D shall not extend to
or secure any Indebtedness other than any such Indebtedness outstanding
on the date hereof;
(i) financing statements filed in connection with operating
leases made in the ordinary course of business; and
(j) judgments and other similar Liens arising in connection
with court proceedings to the extent such judgments do not constitute
Events of Default; provided the execution or other enforcement of such
Lien is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
24
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the U.S. Borrowers or
any ERISA Affiliate is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"PPSA" means the Personal Property Security Act in effect from time to
time in Ontario, Canada (or such other analogous statute in effect from time to
time in any other province of Canada, as applicable).
"Production Month" means for the first two Production Months of a
quarter a 4 week production period and for the third Production Month of a
production quarter a five week production period of the Credit Parties.
"Production Quarter" means each thirteen week production period of the
Credit Parties.
"Regulation U or X" means Regulation U or X, respectively, of the Board
of Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitute at least 51% of the aggregate Credit Exposure of
all Lenders at such time; provided, however, that Required Lenders shall be
comprised of at least two (2) Lenders and provided, further, that if any Lender
shall be a Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders at such time the aggregate principal amount of
Credit Exposure of such Lender at such time. For purposes of the preceding
sentence, the term "Credit Exposure" as applied to each Lender shall mean (a) at
any time prior to the termination of the Commitments, the sum of (i) the U.S.
Revolving Loan Commitment Percentage of such Lender multiplied times the U.S.
Revolving Loan Commitments, plus (ii) the Canadian Revolving Loan Commitment
Percentage of such Lender multiplied times the Canadian Revolving Loan
Commitments, and (b) at any time after the termination of the Commitments, the
sum of (i) the principal balance of outstanding Revolving Loans of such Lender,
plus (ii) the Face Amount of all Bankers' Acceptances created by such Lender
plus (iii) such Lender's Participation Interests in the face amount of
outstanding Letters of Credit. In determining each Lender's Credit Exposure as
set forth above, amounts denominated in Canadian Dollars shall be converted into
U.S. Dollars based on an exchange rate determined by the Administrative Agent in
accordance with its normal practices.
"Requirement of Law" means, as to any Person, any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to our binding upon such
Person or to which any of its property is subject.
"Restricted Payment" means (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the
25
Consolidated Parties, now or hereafter outstanding, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
member of the Consolidated Parties now or hereafter outstanding by such member
of the Consolidated Parties, except for any redemption, retirement, sinking
funds or similar payment payable solely in such shares of that class of stock or
in any class of stock junior to that class or (iii) any cash payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any shares of any class
of Capital Stock of any member of the Consolidated Parties now or hereafter
outstanding.
"Revolving Credit Notes" means the promissory notes of the Borrowers in
favor of each Lender evidencing the Revolving Loans and substantially in the
form of Exhibit F, as such promissory notes may be amended, modified,
supplemented or replaced from time to time.
"Revolving Loan Commitments" means the U.S. Revolving Loan Commitment
and the Canadian Revolving Loan Commitment.
"Revolving Loans" means the loans made pursuant to Section 2.1 and 2.3,
which may be U.S. Revolving Loans and/or Canadian Revolving Loans.
"Security Agreements" means the Canadian Security Agreement, the U.S.
Security Agreement and the Canadian Hypothec.
"Security Documents" means, collectively, the Security Agreements, the
U.S. Pledge Agreement, any Acknowledgment Agreements and any Lockbox Agreement.
"Senior Financial Officers" means the Chief Executive Officer, Chief
Financial Officer, Controller and Treasurer of the Company or any other Credit
Party.
"Senior Management Members" means such term as defined in Section 6.28.
"Senior Officers" means each of the Senior Financial Officers and each
Senior Management Member of the Credit Parties.
"Settlement Period" means such term as defined in Section 2.7(a) and
(b).
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" means, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's assets would constitute
unreasonably small capital after giving due consideration to the
26
prevailing practice in the industry in which such Person is engaged or is to
engage, (d) the fair value of the assets of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (e) the present fair saleable value of the
assets of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Subsidiary" of any Person means (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of the capital stock of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries of such Person, and (b) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries of such Person has more than 50% of the equity interest at any
time.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Benefit Plan
pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
"Total Borrowing Base" means a U.S. dollar amount equal to the sum of
the U.S. Borrowing Base and the Canadian Borrowing Base.
"UCC" means such term as defined in Section 1.3.
"Unfinanced Capital Expenditures" means, for any period, all Capital
Expenditures not financed from proceeds of Consolidated Funded Debt (other than
Loans made under this Agreement).
"Unused Fees" means such term as defined in Section 4.5.
"U.S. Base Rate" means the higher of (a) the Federal Funds Rate plus
0.5% or (b) the U.S. Prime Rate; provided, however, that if in the reasonable
judgment of the Administrative Agent the Federal Funds Rate cannot be determined
then the U.S. Prime Rate shall apply until the circumstances giving rise to such
inability to determine the Federal Funds Rate no longer exist. Any change in the
U.S. Base Rate due to a change in the U.S. Prime Rate or the Federal Funds
27
Rate shall be effective as of the opening of business on the effective day of
such change in the U.S. Base Rate or the Federal Funds Rate, respectively.
"U.S. Base Rate Loans" means any Loans accruing interest based on the
U.S. Base Rate.
"U.S. Borrowers" means Wolverine Tube, Inc., TF Investor, Inc., Tube
Forming Holdings, Inc., Tube Forming, LP, Wolverine Finance Company, STPC
Holding, Inc., Small Tube Manufacturing Corporation, Wolverine China
Investments, LLC and Wolverine Joining Technologies, Inc. and such other Persons
organized under the laws of, and resident in, the United States that become
parties hereto pursuant to a Joinder Agreement in accordance with Section 7.11.
"U.S. Borrowing Base" means a U.S. dollar amount equal to the sum of
(a) an amount equal to 85% of Eligible Accounts Receivable of the U.S. Credit
Parties, plus (b) an amount equal to the lesser of (i) 60% of Eligible Inventory
of the U.S. Credit Parties consisting of raw materials and finished goods
inventory or (ii) $17,500,000 minus, (c) so long as the public service workers
in the province of Ontario are on strike and the Canadian Agent is prohibited
from determining whether it shall receive or whether it has obtained a first
priority, perfected security interest in the Canadian Collateral, the sum of (i)
the Canadian Revolving Loans outstanding plus (ii) Canadian LOC Obligations
outstanding plus (iii) BA Obligations.
"U.S. Collateral" means any and all assets and rights and interests in
or to property of the U.S. Credit Parties pledged from time to time as security
for the Obligations pursuant to the Security Documents whether now owned or
hereafter acquired, including, without limitation, all of the Accounts and
Inventory of the U.S. Credit Parties, any Chattel Paper, Documents or
Instruments evidencing or relating to such Accounts or Inventory, Deposit
Accounts and all Proceeds thereof, as defined in the U.S. Security Agreement.
"U.S. Credit Parties" means the U.S. Borrowers and all of their U.S.
Subsidiaries whether direct or indirect and whether now owned or hereafter
acquired.
"U.S. Dollar Equivalent" means such term as defined in Section 1.4.
"U.S. GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of Section
1.2.
"U.S. Lenders" means the Lenders identified as such on Schedule 1.1A
and such other Lenders as may be added in accordance with the terms of this
Agreement.
"U.S. Letter of Credit" means a Letter of Credit issued under the U.S.
LOC Facility, as referenced in Section 2.2(a).
"U.S. Lockbox" means such term as defined in Section 3.1.
"U.S. Lockbox Account" means such term as defined in Section 3.1.
"U.S. Lockbox Bank" means such term as defined in Section 3.1.
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"U.S. LOC Obligations" means LOC Obligations relating to U.S. Letters
of Credit.
"U.S. LOC Facility" means the Letter of Credit facility established
pursuant to Section 2.2.
"U.S. Maturity Date" means March 27, 2005.
"U.S. Obligations" means the Obligations of the U.S. Borrowers.
"U.S. Pledge Agreement" means the Pledge Agreement, of even date
herewith, between the Administrative Agent and the U.S. Credit Parties, in the
form attached hereto as Exhibit H-3.
"U.S. Prime Rate" means the per annum rate of interest established from
time to time by the Administrative Agent at its principal office in Charlotte,
North Carolina (or such other principal office of the Administrative Agent as
communicated in writing to the Borrowers and the Lenders) as its Prime Rate. Any
change in the interest rate resulting from a change in the U.S. Prime Rate shall
become effective as of 12:01 a.m. of the Business Day on which each change in
the U.S. Prime Rate is announced by the Administrative Agent. The U.S. Prime
Rate is a reference rate used by the Administrative Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor.
"U.S. Revolving Loan Commitment" means $37,500,000 (U.S.), as such
amount may be reduced in accordance with Section 2.10.
"U.S. Revolving Loan Commitment Percentage" means, for each U.S.
Lender, the percentage identified as its U.S. Revolving Loan Commitment
Percentage opposite such U.S. Lender's name on Schedule 1.1A, as such percentage
may be modified by assignment in accordance with the terms of this Agreement.
"U.S. Revolving Loans" means the revolving loans made by the U.S.
Lenders to the U.S. Borrowers pursuant to Section 2.1.
"U.S. Security Agreement" means the Security Agreement, of even date
herewith, between the Administrative Agent and the U.S. Credit Parties, in the
form attached hereto as Exhibit H-1.
"U.S. Subsidiary" means any direct or indirect Subsidiary of the U.S.
Borrowers which is incorporated or organized under the laws of any State of the
United States or the District of Columbia.
"U.S. Unutilized Revolving Commitment" means, for any period, the
amount by which (a) the then applicable U.S. Revolving Loan Commitment exceeds
(b) the daily average sum for such period of the outstanding aggregate principal
amount of all U.S. Revolving Loans plus the daily average balance of U.S. LOC
Obligations for such period plus the Canadian Unutilized Revolving Commitment.
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"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
"Wachovia" means Wachovia Bank, N.A., having its principal office in
North Carolina, and its successors and permitted assigns.
"Wachovia Cash Collateral Accounts" means any Wachovia account
established and maintained in the name of the U.S. Borrowers at Wachovia, with
the Administrative Agent named as secured party thereon, into which funds
transferred from any U.S. Lockbox will be deposited.
"Wachovia Funding Account" means any account established and maintained
in the name of the U.S. Borrowers at Wachovia, with the Administrative Agent
named as secured party thereon.
"2008 Senior Note Indenture" means the Indenture, dated as of August 4,
1998 by and among the Company and First Union National Bank, as trustee, as the
same may be amended, modified, restated or supplemented and in effect from time
to time in accordance with the terms hereof..
"2008 Senior Noteholders" means a collective reference to the holders
from time to time of the 2008 Senior Notes and "2008 Senior Noteholder" means
any one of them.
"2008 Senior Notes" means a reference to any one of the Company's
$150,000,000 7 3/8% Senior Notes, due August, 2008 issued by the Company in
favor of the 2008 Senior Noteholders pursuant to the 2008 Senior Note Indenture,
as such 2008 Senior Notes may be amended, modified, restated or supplemented and
in effect from time to time in accordance with the terms hereof.
"2009 Senior Note Indenture" means that certain Indenture dated as of
March 27, 2002 by and among the Company, the Subsidiaries listed therein and
Wachovia Bank, N.A., as Trustee, as such 2009 Senior Note Indenture may be
amended, modified, restated, replaced or supplemented and in effect from time to
time in accordance with the terms hereof.
"2009 Senior Noteholders" means a collective reference to the holders
from time to time of the 2009 Senior Notes and "2009 Senior Noteholder" means
any one of them.
"2009 Senior Notes" means a reference to any one of the Company's
$120,000,000 10.5% Senior Notes, due April 1, 2009 issued by the Company in
favor of the 2009 Senior Noteholders pursuant to the 2009 Senior Note Indenture,
as such 2009 Senior Notes may be amended, modified, restated, replaced or
supplemented and in effect from time to time in accordance with the terms
hereof.
1.2 ACCOUNTING TERMS.
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Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared in accordance with U.S. GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of U.S. GAAP applied on a basis consistent with those used in the
preparation of the latest annual or quarterly financial statements under Section
7.1 (or prior to the delivery of the first financial statements under Section
7.1 used in the preparation of the financial statements described in Section
6.6). In determining "pro forma" compliance with the financial covenants herein,
as required pursuant to any provision hereof, any Indebtedness incurred or asset
sale made or Acquisition completed shall be deemed to have been incurred, made
or completed, as the case may be, on the first day of the four fiscal quarters
most recently ended prior to such occurrence.
The Borrowers shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 7.1, (a) a
description in reasonable detail of any material variation between the
application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the most recent preceding annual or quarterly financial
statements and (b) reasonable estimates of the difference between such
statements arising as a consequence thereof.
1.3 OTHER DEFINITIONAL PROVISIONS.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of North Carolina (the "UCC") shall
have the meanings given them in the UCC. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Credit Agreement shall
refer to the Credit Agreement as a whole and not to any particular provision of
this Credit Agreement, unless otherwise specifically provided. References in
this Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.1 may,
unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing, computer disk, e-mail and other
means of reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof. References to
any Person include the successors and permitted assigns of such Person.
References "from" or "through" any date mean, unless otherwise specified, "from
and including" or "through and including", respectively. References to any times
herein unless otherwise specified herein shall refer to Eastern Standard or
Daylight time, as from time to time in effect.
1.4 DOLLAR EQUIVALENT PROVISIONS.
For the purpose of any provision of this Credit Agreement in which any
limitation, requirement, condition, event or circumstance is expressed by
reference to an amount in U.S. dollars: (a) any amount outstanding in Canadian
Dollars shall be converted to an amount in U.S.
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dollars (the "U.S. Dollar Equivalent") based on an exchange rate as of the
relevant date(s) determined by the Canadian Agent in accordance with normal
practices; and (b) such U.S. dollar amount shall be converted to an amount in
Canadian Dollars (the "Canadian Dollar Equivalent) based on an exchange rate as
of the relevant date(s) determined by the Canadian Agent in accordance with
normal practices. The Canadian Agent shall use the applicable noon or closing
exchange rate of the Bank of Canada as the basis for any such determinations.
ARTICLE II
THE REVOLVING LOANS
2.1 THE U.S. REVOLVING LOANS.
(a) U.S. Revolving Loan Commitment. Subject to the terms and conditions
set forth herein, each U.S. Lender agrees, severally and not jointly, at any
time and from time to time from the Effective Date to the U.S Maturity Date, to
make revolving loans (each a "U.S. Revolving Loan" and collectively, the "U.S.
Revolving Loans") in U.S. dollars to the U.S. Borrowers; provided, however, that
(i) the aggregate amount of U.S. Revolving Loans outstanding plus U.S. LOC
Obligations outstanding at any one time may not exceed the lesser of the U.S.
Borrowing Base and the U.S. Revolving Loan Commitment; (ii) the aggregate amount
of U.S. Revolving Loans outstanding plus Canadian Revolving Loans outstanding
plus LOC Obligations outstanding plus the aggregate Face Amount of Bankers'
Acceptances at any one time may not exceed the lesser of the Total Borrowing
Base and $37,500,000 (U.S.); and (iii) with regard to each individual U.S.
Lender, the U.S. Lender's pro rata share of outstanding U.S. Revolving Loans
plus U.S. LOC Obligations outstanding shall not exceed such U.S. Lender's U.S.
Revolving Loan Commitment Percentage of the U.S. Revolving Loan Commitment;
provided, however, upon any Canadian Maturity Date occurring prior to the U.S.
Maturity Date, the Borrowers shall be entitled to receive (and the
Administrative Agent is hereby authorized by the Lenders to provide) a U.S.
Revolving Loan in an amount which is sufficient to pay in full the Canadian
Obligations so long as (i) the proceeds of such U.S. Revolving Loan are applied
to repay in full the Canadian Obligations simultaneously with the making of such
U.S. Revolving Loan and (ii) the Borrowers are in compliance with the foregoing
provisions of this Section 2.1(a) immediately after such application and (iii)
the Borrowers are in compliance in all respects with Section 5.2.
U.S. Revolving Loans shall consist of U.S. Base Rate Loans or
Eurodollar Loans (or a combination thereof) as the U.S. Borrowers may request,
and the U.S. Borrowers may borrow, repay and reborrow in accordance with the
terms hereof. The Administrative Agent shall have the continuing right to deduct
reserves from the U.S. Borrowing Base, and to increase and decrease such
reserves from time to time, if and to the extent that in the Administrative
Agent's reasonable discretion, such reserves are necessary, including to protect
the Administrative Agent's and/or Lender's interest in the U.S. Collateral or to
protect the Administrative Agent against possible non-payment of Accounts for
any reason by account debtors or possible diminution of the value of any of the
U.S. Collateral or
32
possible non-payment of any of the Obligations or for any Taxes or in respect of
any state of facts that could constitute a Default. The Administrative Agent
may, at its option, or shall at the request of the Required Lenders, implement
reserves by designating as ineligible a sufficient amount of the Account or
Inventory that would otherwise be Eligible Accounts or Eligible Inventory, as
the case may be, so as to reduce the U.S. Borrowing Base by the amount of the
intended reserves.
(b) Method of Borrowing for U.S. Revolving Loans.
(i) U.S. Base Rate Loans. By no later than 11:00 a.m., on the
date of the request, the applicable U.S. Borrower shall submit a Notice
of Borrowing to the Administrative Agent setting forth the amount
requested, the desire to have such Revolving Loan made as a U.S. Base
Rate Loan and complying in all respects with Section 5.2; provided,
however, that certain U.S. Base Rate Loans may be made without a Notice
of Borrowing in accordance with Section 2.7(a).
(ii) Eurodollar Loans. By no later than 11:00 a.m., three (3)
Business Days prior to the date of the requested Eurodollar Loan, the
applicable U.S. Borrower shall submit a Notice of Borrowing to the
Administrative Agent setting forth the amount thereof, the desire to
have such Revolving Loan made as a Eurodollar Loan, the Interest Period
applicable thereto and complying in all respects with Section 5.2.
2.2 U.S. LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, the Issuing Lender shall from time to time upon request
issue, in U.S. dollars, and the U.S. Lenders shall participate in, letters of
credit (the "U.S. Letters of Credit") for the account of the U.S. Borrowers or
any of their U.S. Subsidiaries, from the Effective Date until the U.S. Maturity
Date, in a form reasonably acceptable to the Issuing Lender; provided, however,
that (i) the aggregate amount of U.S. LOC Obligations shall not at any time
exceed $7,500,000 (U.S.), (ii) the sum of the aggregate amount of U.S. LOC
Obligations outstanding plus U.S. Revolving Loans shall not exceed the lesser of
the U.S. Borrowing Base and the U.S. Revolving Loan Commitment, (iii) with
respect to each individual U.S. Lender, the U.S. Lender's pro rata share of
outstanding U.S. Revolving Loans plus its pro rata share of outstanding U.S. LOC
Obligations shall not exceed such U.S. Lender's Revolving Loan Commitment
Percentage of the U.S. Revolving Loan Commitment and (iv) the sum of U.S.
Revolving Loans outstanding plus Canadian Revolving Loans outstanding plus LOC
Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances
at any one time shall not exceed the lesser of the Total Borrowing Base and
$37,500,000 (U.S.). The issuance and expiry date of each U.S. Letter of Credit
shall be a Business Day. Except as otherwise expressly agreed upon by all the
U.S. Lenders, no U.S. Letter of Credit shall have an original expiry date more
than one year from the date of issuance, or as extended, shall have an expiry
date extending beyond the U.S Maturity Date, except that prior to the U.S
Maturity Date a U.S. Letter of Credit may be
33
issued or extended with an expiry date extending beyond the U.S Maturity Date,
if and to the extent that the U.S. Borrowers shall provide cash collateral to
the Issuing Lender on the U.S. Maturity Date in an amount equal to the maximum
amount available to be drawn under such U.S. Letter of Credit and the Required
Lenders or the Issuing Lender shall not otherwise object. Each U.S. Letter of
Credit shall be either (x) a standby letter of credit issued to support the
obligations (including pension or insurance obligations), contingent or
otherwise, of a U.S. Borrower or any of its U.S. Subsidiaries, or (y) a
commercial letter of credit in respect of the purchase of goods or services by a
U.S. Borrower or any of its U.S. Subsidiaries in the ordinary course of
business. Each U.S. Letter of Credit shall comply with the related LOC
Documents.
(b) Notice and Reports. The request for the issuance of a U.S. Letter
of Credit shall be submitted to the Issuing Lender at least three (3) Business
Days prior to the requested date of issuance. The Issuing Lender will, at least
quarterly and more frequently upon request, provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the U.S. Letters
of Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary, the
face amount, and the expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the Administrative
Agent, promptly upon request, copies of the U.S. Letters of Credit.
(c) Participations. Each U.S. Lender, upon issuance of a U.S. Letter of
Credit, shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such U.S. Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, in each case in an
amount equal to its U.S. Revolving Loan Commitment Percentage of the obligations
under such U.S. Letter of Credit, and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to the Issuing Lender therefor and discharge when due, its U.S. Revolving
Loan Commitment Percentage of the obligations arising under such U.S. Letter of
Credit. Without limiting the scope and nature of each U.S. Lender's
participation in any U.S. Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed as required hereunder or under any such U.S.
Letter of Credit, each such U.S. Lender shall pay to the Issuing Lender its U.S.
Revolving Loan Commitment Percentage of such unreimbursed drawing in same day
funds on the day of notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) hereof. The obligation of
each U.S. Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the U.S. Borrowers or any other
U.S. Credit Party to reimburse the Issuing Lender under any U.S. Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any U.S. Letter of
Credit, the Issuing Lender will promptly notify the U.S. Borrowers. Unless the
U.S. Borrowers shall immediately notify the Issuing Lender of its intent to
otherwise reimburse
34
the Issuing Lender, the U.S. Borrowers shall be deemed to have requested a U.S.
Revolving Loan made as a U.S. Base Rate Loan, in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be used to satisfy
the reimbursement obligations. The U.S. Borrowers shall reimburse the Issuing
Lender on the day of drawing under any U.S. Letter of Credit either with the
proceeds of a U.S. Revolving Loan obtained hereunder or otherwise in same day
funds as provided herein or in the LOC Documents. If the U.S. Borrowers shall
fail to reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the U.S.
Base Rate, plus the sum of the Applicable Percentage for Base Rate Loans and two
percent (2%). Subject to Section 2.2(k)(v), the U.S. Borrowers' reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of (but without waiver of) any rights of set-off,
counterclaim or defense to payment that the applicable account party or the U.S.
Borrowers may claim or have against the Issuing Lender, the Administrative
Agent, the U.S. Lenders, the beneficiary of the Letter of Credit drawn upon or
any other Person, including without limitation, any defense based on any failure
of the applicable account party, the U.S. Borrowers or any other U.S. Credit
Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the U.S. Lenders of the amount of any unreimbursed drawing and each U.S.
Lender shall promptly pay to the Administrative Agent for the account of the
Issuing Lender, in Dollars and in immediately available funds, the amount of
such U.S. Lender's Revolving Loan Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
U.S. Lender from the Issuing Lender if such notice is received at or before 2:00
p.m., otherwise such payment shall be made at or before 12:00 Noon on the
Business Day next succeeding the day such notice is received. If such U.S.
Lender does not pay such amount to the Issuing Lender in full upon such request,
such U.S. Lender shall, on demand, pay to the Administrative Agent for the
account of the Issuing Lender interest on the unpaid amount during the period
from the date the U.S. Lender received the notice regarding the unreimbursed
drawing until such U.S. Lender pays such amount to the Issuing Lender in full at
a rate per annum equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the U.S. Base
Rate. Each U.S. Lender's obligation to make such payment to the Issuing Lender,
and the right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and without
regard to the termination of this Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of each such
payment by a U.S. Lender to the Issuing Lender, such U.S. Lender shall,
automatically and without any further action on the part of the Issuing Lender
or such U.S. Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to the
Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the U.S. Borrowers and the other applicable U.S.
Credit Parties with respect thereto.
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(e) Repayment with Revolving Loans. On any day on which the U.S.
Borrowers shall have requested, or been deemed to have requested, a U.S.
Revolving Loan borrowing to reimburse a drawing under a U.S. Letter of Credit,
the Administrative Agent shall give notice to the U.S. Lenders that a U.S.
Revolving Loan has been requested or deemed requested in connection with a
drawing under a U.S. Letter of Credit, in which case a U.S. Revolving Loan
borrowing comprised solely of U.S. Base Rate Loans (each such borrowing, a
"Mandatory Borrowing") shall be immediately made from all U.S. Lenders (without
giving effect to any termination of the Commitments pursuant to Section 9.2) pro
rata based on each U.S. Lender's respective U.S. Revolving Loan Commitment
Percentage and the proceeds thereof shall be paid directly to the Issuing Lender
for application to the respective LOC Obligations. Each such U.S. Lender hereby
irrevocably agrees to make such U.S. Revolving Loans immediately upon any such
request or deemed request on account of each such Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date notwithstanding (i) the amount of Mandatory Borrowing may not comply
with the minimum amount for borrowings of U.S. Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or Event of Default then exists, (iv)
the failure of any such request or deemed request for U.S. Revolving Loans to be
made by the time otherwise required hereunder, (v) the date of such Mandatory
Borrowing, or (vi) any reduction in the U.S. Revolving Loan Commitment or any
termination of the Commitments. In the event that any Mandatory Borrowing cannot
for any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the U.S.
Bankruptcy Code with respect to the U.S. Borrowers or any other U.S. Credit
Party), then each such U.S. Lender hereby agrees that it shall forthwith fund
(as of the date the Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the U.S. Borrowers on or after such date
and prior to such purchase) its Participation Interest in the outstanding U.S.
LOC Obligations; provided, further, that in the event any U.S. Lender shall fail
to fund its Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such U.S. Lender's unfunded
Participation Interest therein shall bear interest payable to the Issuing Lender
upon demand, at the rate equal to, if paid within two (2) Business Days of such
date, the Federal Funds Rate, and thereafter at a rate equal to the U.S. Base
Rate.
(f) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, a U.S. Letter of Credit
issued hereunder may contain a statement to the effect that such U.S. Letter of
Credit is issued for the account of a U.S. Subsidiary of a U.S. Borrower;
provided that notwithstanding such statement, such U.S. Borrower shall be the
actual account party for all purposes of this Agreement for such Letter of
Credit and such statement shall not affect the U.S. Borrowers' reimbursement
obligations hereunder with respect to such Letter of Credit.
(g) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any U.S. Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new U.S. Letter of Credit hereunder.
36
(h) Uniform Customs and Practices. The U.S. Letters of Credit shall be
subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce
(Publication No. 500 or the most recent publication, the "UCP").
(i) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the U.S. Lenders
are only those expressly set forth in this Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.2 shall be deemed to prejudice the right of any U.S.
Lender to recover from the Issuing Lender any amounts made available by such
U.S. Lender to the Issuing Lender pursuant to this Section 2.2 in the event that
it is determined by a court of competent jurisdiction that the payment with
respect to a U.S. Letter of Credit constituted gross negligence or willful
misconduct on the part of the Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict between
this Agreement and any LOC Document, this Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Agreement,
the U.S. Borrowers hereby agree to protect, indemnify, pay and save the
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any U.S. Letter of Credit or (B) the failure of the Issuing Lender to
honor a drawing under a U.S. Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions, herein called "Government Acts").
(ii) As between the U.S. Borrowers and the Issuing Lender, the
U.S. Borrowers shall assume all risks of the acts, omissions or misuse
of any U.S. Letter of Credit by the beneficiary thereof. The Issuing
Lender shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any U.S. Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any U.S.
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of a U.S.
Letter of Credit to comply fully with conditions required in order to
draw upon a U.S. Letter of Credit; (D) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail,
37
cable, telegraph, telex or otherwise, whether or not they be in cipher;
(E) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a U.S. Letter of Credit or of
the proceeds thereof; and (F) any consequences arising from causes
beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's rights or powers
hereunder.
(iii)In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by the Issuing Lender, under or in connection with any U.S. Letter of
Credit or the related certificates, if taken or omitted in good faith,
shall not put the Issuing Lender under any resulting liability to the
U.S. Borrowers or any U.S. Credit Party. It is the intention of the
parties that this Agreement shall be construed and applied to protect
and indemnify the Issuing Lender against any and all risks involved in
the issuance of the U.S. Letters of Credit, all of which risks are
hereby assumed by the U.S. Borrowers, including, without limitation,
any and all risks of the acts or omissions, whether rightful or
wrongful, of any present or future Government Acts. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender
or anyone else to pay any drawing under any U.S. Letter of Credit as a
result of any Government Acts or any other cause beyond the control of
the Issuing Lender.
(iv)Nothing in this subsection (k) is intended to limit the
reimbursement obligation of the U.S. Borrowers contained in this
Section 2.2. The obligations of the U.S. Borrowers under this
subsection (k) shall survive the termination of this Agreement. No act
or omission of any current or prior beneficiary of a U.S. Letter of
Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Agreement.
(v)Notwithstanding anything to the contrary contained in this
subsection (k), the U.S. Borrowers shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred by
the Issuing Lender arising out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a court of competent
jurisdiction. Nothing in this Agreement shall relieve the Issuing
Lender of any liability to the U.S. Borrowers in respect of any action
taken by the Issuing Lender which action constitutes gross negligence
or willful misconduct of the Issuing Lender or a violation of the UCP
or Uniform Commercial Code (as applicable), as determined by a court of
competent jurisdiction.
2.3 THE CANADIAN REVOLVING LOANS.
(a) Canadian Revolving Loan Commitment. Subject to the terms and
conditions set forth herein, each Canadian Lender agrees, severally and not
jointly, at any time and from time to time from the Effective Date to the
Canadian Maturity Date, to make revolving loans (each a "Canadian Revolving
Loan" and collectively, the "Canadian Revolving Loans") to the Canadian
Borrowers in Canadian Dollars or U.S. Dollars, as requested by the Canadian
Borrowers; provided, however, that (i) the aggregate amount of
38
Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding
plus the aggregate Face Amount of Bankers' Acceptances at any one time may not
exceed the lesser of the Canadian Borrowing Base and the Canadian Revolving Loan
Commitment; (ii) the aggregate amount of U.S. Revolving Loans outstanding plus
Canadian Revolving Loans outstanding plus LOC Obligations outstanding plus the
aggregate Face Amount of Bankers' Acceptances at any one time may not exceed the
lesser of the Total Borrowing Base and $37,500,000 (U.S.); and (iii) with regard
to each individual Canadian Lender, the Canadian Lender's pro rata share of
Canadian Revolving Loans outstanding plus Canadian LOC Obligations outstanding
plus such Canadian Lender's pro rata share of the aggregate Face Amount of
Bankers' Acceptances at any one time shall not exceed such Canadian Lender's
Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Loan
Commitment. Canadian Revolving Loans shall consist of Canadian Base Rate Loans,
Eurodollar Loans or the creation of Bankers' Acceptances (or a combination
thereof) as the Canadian Borrowers may request and the Canadian Borrowers may
borrow, repay and reborrow in accordance with the terms hereof. All Canadian
Revolving Loans advanced on the Effective Date shall be Canadian Base Rate Loans
and may thereafter be converted to Eurodollar Loans in accordance with Section
4.1. The Administrative Agent shall have the continuing right to deduct reserves
from the Canadian Borrowing Base, and to increase and decrease such reserves
from time to time, if and to the extent that in the Administrative Agent's
reasonable discretion, such reserves are necessary, including to protect the
Lenders' interest in the Canadian Collateral or to protect the Administrative
Agent against possible non-payment of Accounts for any reason by account debtors
or possible diminution of the value of any of the Canadian Collateral or
possible non-payment of any of the Obligations or for any Taxes or in respect of
any state of facts that could constitute a Default. The Administrative Agent
may, at its option, or shall at the request of the Required Lenders, implement
reserves by designating as ineligible a sufficient amount of the Account or
Inventory that would otherwise be Eligible Accounts or Eligible Inventory, as
the case may be, so as to reduce the Canadian Borrowing Base by the amount of
the intended reserves.
(b) Method of Borrowing for Canadian Revolving Loans.
(i) Canadian Base Rate Loans. By no later than 11:00 a.m.,
Toronto, Ontario time, on the date of the request, the applicable
Canadian Borrower shall submit a Notice of Borrowing to the Canadian
Agent and the Administrative Agent setting forth the amount requested,
the desire to have such Revolving Loan made as a CA U.S. Base Rate Loan
or a Canadian Prime Rate Loan and complying in all respects with
Section 5.2; provided, however, that certain Canadian Base Rate Loans
may be made without a Notice of Borrowing in accordance with Section
2.7(b). All or any portion of such CA U.S. Base Rate Loans may be
converted into Eurodollar Loans and all or any portion of such Canadian
Prime Rate Loans may be converted into Bankers' Acceptances, in each
case, in accordance with the terms of Section 4.1.
(ii) Eurodollar Loans. By no later than 11:00 a.m., Toronto,
Ontario time, three (3) Business Days prior to the date of the
requested Canadian Revolving Loan, the applicable Canadian Borrower
shall submit a Notice of Borrowing to the
39
Canadian Agent and the Administrative Agent setting forth the amount
thereof, the desire to have such Revolving Loan made as a Eurodollar
Loan, the Interest Period applicable thereto, and complying in all
respects with Section 5.2.
(iii) Bankers' Acceptances. In addition to Canadian Base Rate
Loans and Eurodollar Loans, the Canadian Revolving Loan Commitment may
be utilized by the creation of Bankers' Acceptances pursuant to Section
2.5 hereof.
2.4 CANADIAN LETTER OF CREDIT FACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require (so long as such terms and conditions do not impose any
financial obligation on or require any Lien not otherwise contemplated by this
Agreement to be given by any Credit Party or conflict with any obligation of, or
detract from any action which may be taken by, any Credit Party under this
Agreement), the Issuing Lender shall from time to time upon request issue, in
U.S. Dollars or Canadian Dollars, and the Canadian Lenders shall participate in,
letters of credit (the "Canadian Letters of Credit") for the account of the
Canadian Borrowers or any of their Canadian Subsidiaries, from the Effective
Date until the Canadian Maturity Date, in a form reasonably acceptable to the
Issuing Lender; provided, however, that (i) the aggregate amount of Canadian LOC
Obligations shall not at any time exceed $7,500,000 (U.S.), (ii) the sum of the
aggregate amount of Canadian Revolving Loans outstanding plus Canadian LOC
Obligations outstanding plus the aggregate Face Amount of Bankers' Acceptances
at any one time shall not exceed the lesser of the Canadian Borrowing Base and
the Canadian Revolving Loan Commitment, (iii) with respect to each individual
Canadian Lender, the Canadian Lender's pro rata share of outstanding Canadian
Revolving Loans plus its pro rata share of outstanding Canadian LOC Obligations
plus its pro rata share of the Face Amount of Bankers' Acceptances outstanding
shall not exceed such Canadian Lender's Revolving Loan Commitment Percentage of
the Canadian Revolving Loan Commitment and (iv) the sum of U.S. Revolving Loans
outstanding plus Canadian Revolving Loans outstanding plus LOC Obligations
outstanding plus the aggregate Face Amount of Bankers' Acceptances at any one
time shall not exceed the lesser of the Total Borrowing Base and $37,500,000
(U.S.). The issuance and expiry date of each Canadian Letter of Credit shall be
a Business Day. Except as otherwise expressly agreed upon by all the Canadian
Lenders, no Canadian Letter of Credit shall have an original expiry date
extending beyond the Canadian Maturity Date, except that prior to the Canadian
Maturity Date a Canadian Letter of Credit may be issued or extended with an
expiry date extending beyond the Canadian Maturity Date, if and to the extent
that the Canadian Borrowers shall provide cash collateral to the Issuing Lender
on the Canadian Maturity Date in an amount equal to the maximum amount available
to be drawn under such Canadian Letter of Credit and the Required Lenders or the
Issuing Lender shall not otherwise object. Each Canadian Letter of Credit shall
be either (x) a standby letter of credit issued to support the obligations
(including pension or insurance obligations), contingent or otherwise, of the
Canadian Borrowers or any of their Canadian Subsidiaries, or (y) a commercial
letter of credit in respect of the purchase of goods or services by the Canadian
40
Borrowers or any of their Canadian Subsidiaries in the ordinary course of
business. Each Canadian Letter of Credit shall comply with the related LOC
Documents.
(b) Notice and Reports. The request for the issuance of a Canadian
Letter of Credit shall be submitted to the Issuing Lender at least three (3)
Business Days prior to the requested date of issuance. The Issuing Lender will,
at least quarterly and more frequently upon request, provide to the
Administrative Agent for dissemination to the Lenders a detailed report
specifying the Canadian Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since the date of
the prior report, and including therein, among other things, the account party,
the beneficiary, the face amount, and the expiry date as well as any payments or
expirations which may have occurred. The Issuing Lender will further provide to
the Administrative Agent, promptly upon request, copies of the Canadian Letters
of Credit.
(c) Participations. Each Canadian Lender, upon issuance of a Canadian
Letter of Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Canadian Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Canadian Revolving Loan Commitment Percentage of the
obligations under such Canadian Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Issuing Lender therefor and discharge when due,
its Canadian Revolving Loan Commitment Percentage of the obligations arising
under such Canadian Letter of Credit. Without limiting the scope and nature of
each Canadian Lender's participation in any Canadian Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required hereunder or
under any such Canadian Letter of Credit, each such Canadian Lender shall pay to
the Issuing Lender its Canadian Revolving Loan Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Canadian Lender to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair the obligation of
the Canadian Borrowers or any other Canadian Credit Party to reimburse the
Issuing Lender under any Canadian Letter of Credit, together with interest as
hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Canadian
Letter of Credit, the Issuing Lender will promptly notify the Canadian
Borrowers. Unless the Canadian Borrowers shall immediately notify the Issuing
Lender of their intent to otherwise reimburse the Issuing Lender, the Canadian
Borrowers shall be deemed to have requested a Canadian Revolving Loan made as a
Canadian Base Rate Loan at the Canadian Prime Rate or the CA U.S. Prime Rate, as
appropriate, in the amount of the drawing as provided in subsection (e) hereof,
the proceeds of which will be used to satisfy the reimbursement obligations. The
Canadian Borrowers shall reimburse the Issuing Lender on the day of drawing
under any Canadian Letter of Credit either with the proceeds of a Canadian
Revolving Loan obtained hereunder or otherwise in same day funds as provided
herein or in the LOC Documents. If the Canadian Borrowers shall fail to
reimburse the Issuing Lender
41
as provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Canadian Prime Rate or the CA U.S.
Prime Rate, as appropriate, plus the sum of the Applicable Percentage for Base
Rate Loans and two percent (2%). Subject to Section 2.4(k)(v), the Canadian
Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of (but without waiver of)
any rights of set-off, counterclaim or defense to payment the applicable account
party or the Canadian Borrowers may claim or have against the Issuing Lender,
the Administrative Agent, the Canadian Agent, the Canadian Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation, any defense based on any failure of the applicable account
party, the Canadian Borrowers or any other Canadian Credit Party to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the Canadian Lenders
of the amount of any unreimbursed drawing and each Canadian Lender shall
promptly pay to the Canadian Agent for the account of the Issuing Lender, in
immediately available funds, the amount of such Canadian Lender's Revolving Loan
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Canadian Lender from the Issuing
Lender if such notice is received at or before 2:00 p.m., otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next succeeding the
day such notice is received. If such Canadian Lender does not pay such amount to
the Issuing Lender in full upon such request, such Canadian Lender shall, on
demand, pay to the Canadian Agent for the account of the Issuing Lender interest
on the unpaid amount during the period from the date the Canadian Lender
received the notice regarding the unreimbursed drawing until such Canadian
Lender pays such amount to the Issuing Lender in full at a rate per annum equal
to, if paid within two (2) Business Days of the date of drawing, the Federal
Funds Rate and thereafter at a rate equal to the Canadian Prime Rate for Loans
made in Canadian Dollars or the CA U.S. Prime Rate for Loans made in U.S.
Dollars, as appropriate. Each Canadian Lender's obligation to make such payment
to the Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Canadian Lender to the Issuing Lender, such Canadian
Lender shall, automatically and without any further action on the part of the
Issuing Lender or such Canadian Lender, acquire a participation in an amount
equal to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the Canadian LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Canadian Borrowers and
the other Canadian Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Canadian
Borrowers shall have requested, or been deemed to have requested, a Canadian
Revolving Loan borrowing to reimburse a drawing under a Canadian Letter of
Credit, the Canadian Agent shall give notice to the Canadian Lenders that a
Canadian Revolving Loan has been requested or deemed requested in connection
with a drawing under a Canadian Letter of
42
Credit, in which case a Canadian Revolving Loan borrowing comprised solely of
Canadian Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made from all Canadian Lenders (without giving effect to any
termination of the Commitments pursuant to Section 11.2) pro rata based on each
Canadian Lender's respective Canadian Revolving Loan Commitment Percentage and
the proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective Canadian LOC Obligations. Each such Canadian
Lender hereby irrevocably agrees to make such Canadian Revolving Loans
immediately upon any such request or deemed request on account of each such
Mandatory Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date notwithstanding (i) the amount of Mandatory
Borrowing may not comply with the minimum amount for borrowings of Canadian
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 5.2 are then satisfied, (iii) whether a Default or Event of
Default then exists, (iv) the failure of any such request or deemed request for
Canadian Revolving Loans to be made by the time otherwise required hereunder,
(v) the date of such Mandatory Borrowing, or (vi) any reduction in the Canadian
Revolving Loan Commitment or any termination of the Commitments. In the event
that any Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the U.S. Bankruptcy Code (or applicable Canadian
bankruptcy law) with respect to the Canadian Borrowers or any other Canadian
Credit Party), then each such Canadian Lender hereby agrees that it shall
forthwith fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Canadian Borrowers on
or after such date and prior to such purchase) its Participation Interest in the
outstanding Canadian LOC Obligations; provided, further, that in the event any
Canadian Lender shall fail to fund its Participation Interest on the day the
Mandatory Borrowing would otherwise have occurred, then the amount of such
Canadian Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if paid within
two (2) Business Days of such date, the Federal Funds Rate, and thereafter at a
rate equal to the Canadian Prime Rate, plus two percent (2%).
(f) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Agreement, a Canadian Letter of
Credit issued hereunder may contain a statement to the effect that such Canadian
Letter of Credit is issued for the account of a Canadian Subsidiary of the
Canadian Borrowers; provided that notwithstanding such statement, the Canadian
Borrowers shall be the actual account parties for all purposes of this Agreement
for such Letter of Credit and such statement shall not affect the Canadian
Borrowers' reimbursement obligations hereunder with respect to such Letter of
Credit.
(g) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Canadian Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Canadian Letter of Credit hereunder.
43
(h) Uniform Customs and Practices. The Canadian Letters of Credit shall
be subject to The Uniform Customs and Practice for Documentary Credits, as
published as of the date of issue by the International Chamber of Commerce
(Publication No. 500 or the most recent publication, the "UCP"). ---
(i) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Canadian
Lenders are only those expressly set forth in this Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent set
forth in Section 5.2 have been satisfied unless it shall have acquired actual
knowledge that any such condition precedent has not been satisfied; provided,
however, that nothing set forth in this Section 2.4 shall be deemed to prejudice
the right of any Canadian Lender to recover from the Issuing Lender any amounts
made available by such Canadian Lender to the Issuing Lender pursuant to this
Section 2.4 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Canadian Letter of Credit
constituted gross negligence or willful misconduct on the part of the Issuing
Lender.
(j) Conflict with LOC Documents. In the event of any conflict between
this Agreement and any LOC Document, this Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Agreement,
the Canadian Borrowers hereby agree to protect, indemnify, pay and save
the Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Canadian Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Canadian Letter of Credit as
a result of any Government Act.
(ii) As between the Canadian Borrowers and the Issuing Lender,
the Canadian Borrowers shall assume all risks of the acts, omissions or
misuse of any Canadian Letter of Credit by the beneficiary thereof. The
Issuing Lender shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any Canadian Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Canadian Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of a
Canadian Letter of Credit to comply fully with conditions required in
order to draw upon a Canadian Letter of Credit; (D) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (E) any loss or delay in the transmission
44
or otherwise of any document required in order to make a drawing under
a Canadian Letter of Credit or of the proceeds thereof; and (F) any
consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of the
above shall affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any Canadian
Letter of Credit or the related certificates, if taken or omitted in
good faith, shall not put the Issuing Lender under any resulting
liability to the Canadian Borrowers or any other Canadian Credit Party.
It is the intention of the parties that this Agreement shall be
construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Canadian
Letters of Credit, all of which risks are hereby assumed by the
Canadian Borrowers, including, without limitation, any and all risks of
the acts or omissions, whether rightful or wrongful, as a result of any
Government Act. The Issuing Lender shall not, in any way, be liable for
any failure by the Issuing Lender or anyone else to pay any drawing
under any Canadian Letter of Credit as a result of any Government Acts
or any other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (k) is intended to limit the
reimbursement obligation of the Canadian Borrowers contained in this
Section 2.4. The obligations of the Canadian Borrowers under this
subsection (k) shall survive the termination of this Agreement. No act
or omission of any current or prior beneficiary of a Canadian Letter of
Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (k), the Canadian Borrowers shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred by
the Issuing Lender arising out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a court of competent
jurisdiction. Nothing in this Agreement shall relieve the Issuing
Lender of any liability to the Canadian Borrowers in respect of any
action taken by the Issuing Lender which action constitutes gross
negligence or willful misconduct of the Issuing Lender or a violation
of the UCP or Uniform Commercial Code (as applicable), as determined by
a court of competent jurisdiction.
2.5 BANKERS' ACCEPTANCES.
(a) Form.
(i) To facilitate the acceptance of Bankers' Acceptances
hereunder, the Canadian Borrowers hereby appoint each Canadian Lender
as its attorney to sign and endorse on its behalf, as and when
considered necessary by such Canadian Lender, an appropriate number of
orders in the form prescribed by such Canadian Lender.
45
(ii) Each Canadian Lender may, at its option, execute any
order in handwriting or by the facsimile or mechanical signature of any
of its authorized officers, and the Canadian Lenders are hereby
authorized to accept or pay, as the case may be, any order of the
Canadian Borrowers which purports to bear such a signature
notwithstanding that any such individual has ceased to be an authorized
officer of such Canadian Lender. Any such order or Bankers' Acceptance
shall be as valid as if he or she were an authorized officer at the
date of issue of the order or Bankers' Acceptance.
(iii) Any order signed by a Canadian Lender as attorney for
the Canadian Borrowers, whether signed in handwriting or by the
facsimile or mechanical signature of an authorized officer of a
Canadian Lender, may be dealt with by the Canadian Agent or any
Canadian Lender to all intents and purposes and shall bind the Canadian
Borrowers as if duly signed and issued by the Canadian Borrowers.
(iv) The receipt by the Canadian Agent of a notice under
Section 2.5(d) requesting Bankers' Acceptances shall be each Canadian
Lender's sufficient authority to execute, and each Canadian Lender
shall, subject to the terms and conditions of this Credit Agreement,
execute orders in accordance with such request, and the orders so
executed shall thereupon be deemed to have been presented for
acceptance.
(b) Issuance. Subject to the terms and conditions hereof and of the BA
Documents executed in connection with the creation of each Banker's Acceptance
and any other terms and conditions which the Canadian Lenders may reasonably
require (so long as such terms and conditions do not impose any financial
obligation on or require any Lien (not otherwise contemplated by this Credit
Agreement) to be given by the Canadian Borrowers or any other Credit Party or
conflict with any obligation of, or detract from any action which may be taken
by, any Credit Party under this Agreement), each Canadian Lender agrees,
severally and not jointly, at any time and from time to time (from the Effective
Date to the Canadian Maturity Date or such earlier date on which the Canadian
Revolving Loan Commitment has been terminated as provided herein), to create
Bankers' Acceptances by accepting orders of the Canadian Borrowers presented to
it for acceptance equal to such Canadian Lender's Canadian Revolving Loan
Commitment Percentage of such Bankers' Acceptances as the Canadian Borrowers may
request on such date; provided, however, that (i) the sum of the aggregate Face
Amount of Bankers' Acceptances outstanding plus the aggregate amount of Canadian
Revolving Loans outstanding plus Canadian LOC Obligations outstanding shall not
exceed the Canadian Revolving Loan Commitment, (ii) with respect to each
individual Canadian Lender, such Lender's pro rata share of outstanding Canadian
Revolving Loans plus its pro rata share of outstanding Canadian LOC Obligations
plus its pro rata share of the Face Amount of Bankers' Acceptances outstanding
shall not exceed such Lender's Canadian Revolving Loan Commitment Percentage of
the Canadian Revolving Loan Commitment, and (iii) if the Face Amount of a
Bankers' Acceptance, which would otherwise be accepted by a Canadian Lender,
would not be C$100,000 or a larger multiple thereof, such Face Amount shall be
46
increased or reduced by the Canadian Agent in its discretion to the nearest
multiple of C$100,000. Upon the acceptance of any order of the Canadian
Borrowers pursuant hereto, the Canadian Borrowers shall pay to each of the
applicable Canadian Lenders, in advance, the Acceptance Fee. Forthwith after
each request for drawdown of, continuation of or conversion into Bankers'
Acceptances, the Canadian Agent shall notify each Canadian Lender of the amount
of Bankers' Acceptances to be accepted by such Canadian Lender. The Canadian
Borrowers shall as soon as practical deliver to the Canadian Agent a notice
confirming the issuance of Bankers' Acceptances and specifying the BA Discount
Proceeds derived therefrom. For greater certainty, with respect to each
extension of credit by way of Bankers' Acceptances, each Bankers' Acceptance
shall have the same term and, upon sale, each Bankers' Acceptance shall be
discounted at the Applicable BA Discount Rate.
(c) Requirements of Bankers' Acceptances. Each Bankers' Acceptance
shall comply with the related BA Documents and shall be executed by the Canadian
Borrowers and presented to the Canadian Lenders pursuant to such procedures as
are provided for in such BA Documents or as otherwise provided or required by a
Canadian Lender. The creation and maturity date of each Bankers' Acceptance
shall be a Business Day and no Bankers' Acceptance shall have a maturity date
later than the Canadian Maturity Date.
(d) Method of Requesting a Bankers' Acceptance. By no later than 11:00
a.m., Toronto, Ontario time, two Business Days prior to the date of the
requested Bankers' Acceptance, the Canadian Borrowers shall submit an
irrevocable notice, substantially in the form of Exhibit G, to the Canadian
Agent setting forth the aggregate amount of Bankers' Acceptances requested and
the maturity date of the requested Bankers' Acceptances which shall be from 30
up to 180 days, at the election of the Canadian Borrowers, and complying in all
respects with subsection 5.2.
(e) Safekeeping of Orders. Any executed orders to be used as Bankers'
Acceptances which are delivered to a Canadian Lender shall be held in
safekeeping with the same degree of care as if they were such Canadian Lender's
own property, and shall be kept at the place at which such orders are ordinarily
held by such Canadian Lender, provided that such Canadian Lender shall not be
deemed to be an insurer thereof.
(f) Maturity/Continuations. The Canadian Borrowers shall pay to the
Canadian Agent, and there shall become due and payable, at 1:00 p.m., Toronto,
Ontario time, on the maturity date for each Bankers' Acceptance an amount in
Canadian Dollars in same day funds equal to the Face Amount of such Bankers'
Acceptance (notwithstanding that any Canadian Lender which accepted any such
Bankers' Acceptance may be the holder thereof at maturity); provided, however,
that subject to Section 4.10 and provided that the Canadian Borrowers have, by
giving notice in accordance with Section 2.5(d) or Section 4.1, requested the
Canadian Lenders to accept its orders to replace all or a portion of outstanding
Bankers' Acceptances as they mature, each Canadian Lender shall, on the maturity
of such Bankers' Acceptances, accept the Canadian Borrowers' order(s) having an
aggregate Face Amount equal to such Canadian Lender's pro rata share of such new
Face Amount as will result in the aggregate BA Discount Proceeds, net of the
Acceptance Fees, of the new order(s) being equal to (or, due to the operation of
2.5(h), exceeding to the least extent
47
possible) the aggregate Face Amount of the matured Bankers' Acceptances
or the portion thereof to be replaced.
(g) Repayments Prior to Maturity. Repayment of the Face Amount of a
Bankers' Acceptance may be made, prior to the maturity date thereof, by the
Canadian Borrowers to the Canadian Lender which has accepted such Bankers'
Acceptance, but the amount repaid shall be held on deposit by such Canadian
Lender until the maturity date of such Bankers' Acceptance. The Canadian
Borrowers shall be entitled to the benefit of any interest accruing on such
deposit, and on the maturity date of such Bankers' Acceptance, such Canadian
Lender shall apply such interest in payment of amounts owed by the Canadian
Borrowers hereunder. Any such repayment of the Face Amount of a Bankers'
Acceptance by the Canadian Borrowers to a Canadian Lender shall satisfy the
Canadian Borrowers' obligations under the Bankers' Acceptance so repaid, and
such Canadian Lender shall thereafter be solely responsible for the payment of
such Bankers' Acceptance.
(h) Minimum Amounts. Each request for Bankers' Acceptances shall be in
a minimum aggregate amount of C$1,000,000 and in an integral multiple of
C$100,000 above such amount. The Face Amount of each Bankers' Acceptance created
hereunder shall be C$100,000 or any multiple thereof.
(i) Funding of Bankers' Acceptances.
(i) Subject to subsections (ii) and (iii) below, each
Canadian Lender shall, not later than 1:00 p.m., Toronto,
Ontario time, on the date of creation of Bankers' Acceptances,
accept orders of the Canadian Borrowers which are presented to
it for acceptance in an amount equal to each Canadian Lender's
Canadian Revolving Loan Commitment Percentage of the aggregate
Face Amounts of Bankers' Acceptances created on such date;
provided, however, that if the Face Amount of a Banker's
Acceptance, which would otherwise be accepted by a Canadian
Lender, would not be C$100,000 or a larger multiple thereof,
such Face Amount shall be increased or reduced by the Canadian
Agent in its discretion to the nearest multiple of C$100,000.
Subject to the provisions hereof, the Canadian Agent shall be
responsible for making all necessary arrangements with each of
the Canadian Lenders with respect to the acceptance of
Bankers' Acceptances.
(ii) Each Canadian Lender shall transfer to the
Canadian Agent for value on such creation date immediately
available Canadian Dollars in an aggregate amount equal to the
BA Discount Proceeds of all Bankers' Acceptances accepted and
sold or purchased by such Canadian Lender on such date net of
the applicable Acceptance Fee and net of the amount required
to pay any of its previously accepted Bankers' Acceptances
that are maturing on such date or its percentage of any
Canadian Revolving Loan that is being converted to Bankers'
Acceptances on such date.
(iii) Subject to subsection 4.10, in the sole
judgment of a Canadian Lender, if such Canadian Lender is
unable to create a Bankers' Acceptance in accordance
48
with this Agreement, such Canadian Lender shall give an
irrevocable notice to such effect to the Canadian Agent and
the Canadian Borrowers prior to 11:00 a.m., Toronto, Ontario
time, on the date of the requested creation of the Bankers'
Acceptances. Such Canadian Lender shall make available to the
Canadian Borrowers prior to 1:00 p.m., Toronto, Ontario time,
one Business Day prior to the date of such requested Bankers'
Acceptance, a Canadian Dollar loan in a principal amount equal
to the BA Discount Proceeds of such Canadian Lender's pro rata
share of the aggregate of the Face Amounts of Bankers'
Acceptances to be created on such date and all of such
Canadian Dollar loans to be made pursuant to this Section
2.5(i)(iii) on such date, such loan to be funded in the same
manner as the Bankers' Acceptances provided by the other
Canadian Lenders. Such loan shall have the same term as the
Bankers' Acceptance for which it is a substitute and shall
bear such interest per annum throughout the term thereof as
shall permit such Canadian Lender to obtain the same effective
rate as if such Canadian Lender had accepted and purchased a
Bankers' Acceptance at the same Acceptance Fee and pricing at
which the Canadian Agent would have accepted and purchased
such Bankers' Acceptance on the bid side of the market at
approximately 1:00 p.m., Toronto, Ontario time, on the date
such loan is made. The Canadian Borrowers hereby agree that if
such loan is made by a Canadian Lender interest shall be
payable in advance on the date of such loan by deducting the
interest payable in respect thereof from the principal amount
of such loan. The Canadian Borrowers hereby acknowledge that
Congress Financial Corporation (Canada) ("CFCC") is unable to
create Bankers' Acceptances in accordance with this agreement.
CFCC shall be deemed to have given notice to the Canadian
Agent that it is unable to create a Bankers' Acceptance with
respect to all requests by Canadian Borrowers to create
Bankers' Acceptances and shall make Canadian Dollar Revolving
Loans available in accordance with the provisions of this
Section 2.5(i) (iii) in respect of all such requests.
The Canadian Agent shall promptly inform the
Administrative Agent of the creation of Bankers' Acceptances
and the terms thereof. No Canadian Lender shall be responsible
for the failure or delay by any other Canadian Lender in its
obligation to create Bankers' Acceptances hereunder; provided,
however, that the failure of any Canadian Lender to fulfill
its Commitment hereunder shall not relieve any other Canadian
Lender of its Commitment hereunder.
2.6 MINIMUM AMOUNTS OF LOANS.
Revolving Loans shall be in minimum principal amounts of $500,000 and
in $100,000 increments in excess thereof. Revolving Loans made as Eurodollar
Loans shall be in minimum principal amounts of $1,000,000 and in $100,000
increments in excess thereof. No more than four (4) Canadian Eurodollar Loans
and four (4) U.S. Eurodollar Loans shall be outstanding hereunder at any one
time. For the purposes of this Section, (i) Eurodollar Loans with the same
Interest Period shall be considered as one Eurodollar Loan and (ii) Eurodollar
Loans with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings, conversions and
continuations may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period.
49
2.7 FUNDING OF LOANS TO BORROWERS.
(a) U.S. Revolving Loans.
(i) Upon receipt of a Notice of Borrowing requesting U.S. Revolving
Loans, the Administrative Agent shall promptly inform the U.S. Lenders as to the
terms thereof. Each U.S. Lender will make its pro rata share of each U.S.
Revolving Loan available to the Administrative Agent by 1:00 p.m. (EST), on the
date specified in the Notice of Borrowing by deposit (in U.S. dollars) of
immediately available funds at the offices of the Administrative Agent at the
address provided in Section 14.1, or at such other address as the Administrative
Agent may designate in writing. All U.S. Revolving Loans shall be made by the
U.S. Lenders pro rata on the basis of each U.S. Lender's U.S. Revolving Loan
Commitment Percentage. The amount of the U.S. Revolving Loans will then be made
available to the U.S. Borrowers by the Administrative Agent by crediting the
account of the U.S. Borrowers on the books of such office of the Administrative
Agent to the extent of the amount of such U.S. Revolving Loans are made
available to the Administrative Agent.
(ii) Because the U.S. Borrowers anticipate requesting borrowings of
U.S. Revolving Loans on a daily basis and repaying U.S. Revolving Loans on a
daily basis through the collection of Accounts and the proceeds of other
Collateral, resulting in the amount of outstanding U.S. Revolving Loans
fluctuating from day to day, in order to administer the U.S. Revolving Loans in
an efficient manner and to minimize the transfer of funds between the
Administrative Agent and the U.S. Lenders, the U.S. Lenders hereby instruct the
Administrative Agent, and the Administrative Agent may (but is not obligated to)
(A) make available, on behalf of the U.S. Lenders, the full amount of all U.S.
Revolving Loans requested by the U.S. Borrowers (by telephone, followed by
written confirmation) not to exceed $5,000,000 in the aggregate at any one time
outstanding without requiring that the U.S. Borrowers give the Administrative
Agent a written Notice of Borrowing with respect to such borrowing and without
giving each U.S. Lender prior notice of the proposed borrowing, of such U.S.
Lender's Revolving Loan Commitment Percentage thereof and the other matters
covered by the Notice of Borrowing and (B) if the Administrative Agent has made
any such amounts available as provided in clause (A), upon repayment of U.S.
Revolving Loans by the U.S. Borrowers, apply such amounts repaid directly to the
amounts made available by the Administrative Agent in accordance with clause (A)
and not yet settled as described below; provided that the Administrative Agent
shall not advance funds as described in clause (A) above if the Administrative
Agent has actually received prior to such borrowing (1) an officer's certificate
from the Company or any U.S. Borrower pursuant to and in accordance with Section
7.1(d) that a Default or Event of Default is in existence, which Default or
Event of Default has not been cured or waived in accordance with the terms
hereof, or (2) a Notice of Borrowing with respect to such borrowing from any
U.S. Borrower wherein the certification provided therein states that the
conditions to the making of the requested U.S. Revolving Loans have not been
satisfied or (3) a written notice from any U.S. Lender that the conditions to
such borrowing have not been satisfied, which officer's certificate, Notice of
Borrowing or notice, in each case, shall not have been rescinded.
50
During any Cash Dominion Period, proceeds of U.S. Revolving Loans made
pursuant to this Section 2.7(a)(ii) shall be transferred directly to the
Wachovia Funding Account and applied to the payment of control disbursement
checks and other appropriate charges to such account designated from time to
time by the U.S. Borrowers or as otherwise provided for herein and in the other
Credit Documents. Wire transfers on any Business Day from the Wachovia Funding
Account must be specifically requested by the U.S. Borrowers by telecopy by no
later than 1:00 P.M. (Eastern time) on such Business Day.
If the Administrative Agent advances U.S. Revolving Loans on behalf of
the U.S. Lenders, as provided in the immediately preceding paragraphs, the
amount of outstanding U.S. Revolving Loans and each U.S. Lender's U.S. Revolving
Loan Commitment Percentage thereof shall be computed weekly rather than daily
and shall be adjusted upward or downward on the basis of the amount of
outstanding U.S. Revolving Loans as of 5:00 P.M. on the Business Day immediately
preceding the date of each computation; provided, however, that the
Administrative Agent retains the absolute right at any time or from time to time
to make the aforedescribed adjustments at intervals more frequent than weekly.
The Administrative Agent shall deliver to each of the U.S. Lenders after the end
of each week, or such lesser period or periods as the Administrative Agent shall
determine, a summary statement of the amount of outstanding U.S. Revolving Loans
for such period (such week or lesser period or periods being hereafter referred
to as a "Settlement Period"). If the summary statement is sent by the
Administrative Agent and received by the U.S. Lenders prior to 12:00 Noon on any
Business Day each U.S. Lender shall make the transfers described in the next
succeeding sentence no later than 3:00 P.M. on the day such summary statement
was sent; and if such summary statement is sent by the Administrative Agent and
received by the U.S. Lenders after 12:00 Noon on any Business Day, each U.S.
Lender shall make such transfers no later than 3:00 P.M. on the next succeeding
Business Day. If in any Settlement Period, the amount of a U.S. Lender's U.S.
Revolving Loan Commitment Percentage of the U.S. Revolving Loans is in excess of
the amount of U.S. Revolving Loans actually funded by such U.S. Lender, such
U.S. Lender shall forthwith (but in no event later than the time set forth in
the next preceding sentence) transfer to the Administrative Agent by wire
transfer in immediately available funds the amount of such excess; and, on the
other hand, if the amount of a U.S. Lender's U.S. Revolving Loan Commitment
Percentage of the U.S. Revolving Loans in any Settlement Period is less than the
amount of U.S. Revolving Loans actually funded by such U.S. Lender, the
Administrative Agent shall forthwith transfer to such U.S. Lender by wire
transfer in immediately available funds the amount of such difference. The
obligation of each of the U.S. Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by the
Administrative Agent.
Each of the Administrative Agent and the U.S. Lenders agree to xxxx
their respective books and records at the end of each Settlement Period to show
at all times the dollar amount of their respective U.S. Revolving Loan
Commitment Percentages of the outstanding U.S. Revolving Loans. Because the
Administrative Agent on behalf of the U.S. Lenders may be advancing and/or may
be repaid U.S. Revolving Loans prior to the time when the U.S. Lenders will
actually advance and/or be repaid U.S. Revolving Loans,
51
interest with respect to U.S. Revolving Loans shall be allocated by the
Administrative Agent to each U.S. Lender (including the Administrative Agent) in
accordance with the amount of U.S. Revolving Loans actually advanced by and
repaid to each U.S. Lender (including the Administrative Agent) during each
Settlement Period and shall accrue from and including the date such U.S.
Revolving Loans are advanced by the Administrative Agent to but excluding the
date such U.S. Revolving Loans are repaid by the U.S. Borrowers in accordance
with Section 4.3 or actually settled by the applicable U.S. Lender as described
in this Section 2.7(a)(ii). For purposes hereof, the U.S. Revolving Loans shall
be deemed paid as and to the extent set forth in Section 3.1(b). All such U.S.
Revolving Loans shall be made as U.S. Base Rate Loans.
(b) Canadian Revolving Loans.
(i) Upon receipt of a Notice of Borrowing requesting a Canadian
Revolving Loan, the Canadian Agent shall promptly inform the Canadian Lenders of
the receipt thereof. Each Canadian Lender will make its pro rata share of such
Canadian Revolving Loan available to the Canadian Agent by 12:00 noon, Toronto,
Ontario time, on the date specified in the Notice of Borrowing by deposit (in
Canadian Dollars or U.S. dollars, as appropriate, as requested by the Canadian
Borrowers) of immediately available funds at the office of the Canadian Agent at
the address provided in Section 14.1. All Canadian Revolving Loans shall be made
by the Canadian Lenders pro rata on the basis of each Canadian Lender's Canadian
Revolving Loan Commitment Percentage. The amount of the Canadian Revolving Loans
will then be made available to the applicable Canadian Borrower by the Canadian
Agent by crediting the account of such Canadian Borrower on the books of such
office of the Canadian Agent to the extent of the amount of such Canadian
Revolving Loan made available to the Canadian Agent.
(ii) Because the Canadian Borrowers anticipate requesting borrowings of
Canadian Revolving Loans on a daily basis and repaying Canadian Revolving Loans
on a daily basis through the collection of Accounts and the proceeds of other
Collateral, resulting in the amount of outstanding Canadian Revolving Loans
fluctuating from day to day, in order to administer the Canadian Revolving Loans
in an efficient manner and to minimize the transfer of funds between the
Canadian Agent and the Canadian Lenders, the Canadian Lenders hereby instruct
the Canadian Agent, and the Canadian Agent may (but is not obligated to) (A)
make available, on behalf of the Canadian Lenders, the full amount of all
Canadian Revolving Loans requested by the Canadian Borrowers (by telephone,
followed by written confirmation) not to exceed $5,000,000 in the aggregate at
any one time outstanding without requiring that the Canadian Borrowers give the
Canadian Agent a written Notice of Borrowing with respect to such borrowing and
without giving each Canadian Lender prior notice of the proposed borrowing, of
such Canadian Lender's Revolving Loan Commitment Percentage thereof and the
other matters covered by the Notice of Borrowing and (B) if the Canadian Agent
has made any such amounts available as provided in clause (A), upon repayment of
Canadian Revolving Loans by the Canadian Borrowers, apply such amounts repaid
directly to the amounts made available by the Canadian Agent in accordance with
clause (A) and not yet settled as described below; provided that the Canadian
Agent shall not advance funds as
52
described in clause (A) above if the Canadian Agent has actually received prior
to such borrowing (1) an officer's certificate from the Company pursuant to and
in accordance with Section 7.1(d) that a Default or Event of Default is in
existence, which Default or Event of Default has not been cured or waived in
accordance with the terms hereof, or (2) a Notice of Borrowing with respect to
such borrowing from the Canadian Borrowers wherein the certification provided
therein states that the conditions to the making of the requested Canadian
Revolving Loans have not been satisfied or (3) a written notice from any
Canadian Lender that the conditions to such borrowing have not been satisfied,
which officer's certificate, Notice of Borrowing or notice, in each case, shall
not have been rescinded.
During any Cash Dominion Period, proceeds of Canadian Revolving Loans
made pursuant to this Section 2.7(b)(ii) shall be transferred directly to the
applicable Canadian Cash Collateral Account and applied to the payment of
control disbursement checks and other appropriate charges to such account
designated from time to time by the Canadian Borrowers or as otherwise provided
for herein and in the other Credit Documents. Wire transfers on any Business Day
from the Canadian Cash Collateral Account must be specifically requested by the
Canadian Borrowers by telecopy by no later than 12:00 noon (Toronto, Ontario
time) on such Business Day.
If the Canadian Agent advances Canadian Revolving Loans on behalf of
the Canadian Lenders, as provided in the immediately preceding paragraphs, the
amount of outstanding Canadian Revolving Loans and each Canadian Lender's
Canadian Revolving Loan Commitment Percentage thereof shall be computed weekly
rather than daily and shall be adjusted upward or downward on the basis of the
amount of outstanding Canadian Revolving Loans as of 5:00 P.M. on the Business
Day immediately preceding the date of each computation; provided, however, that
the Canadian Agent retains the absolute right at any time or from time to time
to make the aforedescribed adjustments at intervals more frequent than weekly
subject to the approval of the Administrative Agent. The Canadian Agent shall
deliver to each of the Canadian Lenders after the end of each week, or such
lesser period or periods as the Canadian Agent shall determine, a summary
statement of the amount of outstanding Canadian Revolving Loans for such period
(such week or lesser period or periods being hereafter referred to as a
"Settlement Period"). If the summary statement is sent by the Canadian Agent and
received by the Canadian Lenders prior to 12:00 Noon on any Business Day each
Canadian Lender shall make the transfers described in the next succeeding
sentence no later than 3:00 P.M. on the day such summary statement was sent; and
if such summary statement is sent by the Canadian Agent and received by the
Canadian Lenders after 12:00 Noon on any Business Day, each Canadian Lender
shall make such transfers no later than 3:00 P.M. on the next succeeding
Business Day. If in any Settlement Period, the amount of a Canadian Lender's
Canadian Revolving Loan Commitment Percentage of the Canadian Revolving Loans is
in excess of the amount of Canadian Revolving Loans actually funded by such
Canadian Lender, such Canadian Lender shall forthwith (but in no event later
than the time set forth in the next preceding sentence) transfer to the Canadian
Agent by wire transfer in immediately available funds the amount of such excess;
and, on the other hand, if the amount of a Canadian Lender's Canadian Revolving
Loan Commitment Percentage of the Canadian
53
Revolving Loans in any Settlement Period is less than the amount of Canadian
Revolving Loans actually funded by such Canadian Lender, the Canadian Agent
shall forthwith transfer to such Canadian Lender by wire transfer in immediately
available funds the amount of such difference. The obligation of each of the
Canadian Lenders to transfer such funds shall be irrevocable and unconditional
and without recourse to or warranty by the Canadian Agent.
Each of the Canadian Agent and the Canadian Lenders agree to xxxx their
respective books and records at the end of each Settlement Period to show at all
times the dollar amount of their respective Canadian Revolving Loan Commitment
Percentages of the outstanding Canadian Revolving Loans. Because the Canadian
Agent on behalf of the Canadian Lenders may be advancing and/or may be repaid
Canadian Revolving Loans prior to the time when the Canadian Lenders will
actually advance and/or be repaid Canadian Revolving Loans, interest with
respect to Canadian Revolving Loans shall be allocated by the Canadian Agent to
each Canadian Lender (including the Canadian Agent) in accordance with the
amount of Canadian Revolving Loans actually advanced by and repaid to each
Canadian Lender (including the Canadian Agent) during each Settlement Period and
shall accrue from and including the date such Canadian Revolving Loans are
advanced by the Canadian Agent to but excluding the date such Canadian Revolving
Loans are repaid by the Canadian Borrowers in accordance with Section 4.3 or
actually settled by the applicable Canadian Lender as described in this Section
2.7(b)(ii). For purposes hereof, the Canadian Revolving Loans shall be deemed
paid as and to the extent set forth in Section 3.2(b). All such Canadian
Revolving Loans shall be made as Canadian Base Rate Loans.
(c) All Revolving Loans.
The Canadian Agent shall promptly inform the Administrative Agent and
the Administrative Agent shall promptly inform the Canadian Agent, by telecopy,
of the funding of any Revolving Loan and the terms thereof. No Lender shall be
responsible for the failure or delay by any other Lender in its obligation to
make Revolving Loans hereunder; provided, however, that the failure of any
Lender to fulfill its Commitment hereunder shall not relieve any other Lender of
its Commitment hereunder. Unless the Administrative Agent or the Canadian Agent,
as the case may be, shall have been notified by any Lender prior to the date of
any Revolving Loan advance pursuant to a Notice of Borrowing that such Lender
does not intend to make available to the Administrative Agent or the Canadian
Agent, as the case may be, its portion of the Revolving Loan advance to be made
on such date, the Administrative Agent or the Canadian Agent, as the case may
be, may assume that such Lender has made such amount available to the
Administrative Agent or the Canadian Agent, as the case may be, on the date of
such Revolving Loan advance, and the Administrative Agent or the Canadian Agent,
as the case may be, in reliance upon such assumption, may (in its sole
discretion without any obligation to do so) make available to the applicable
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent or the Canadian Agent, as the case
may be, the Administrative Agent or the Canadian Agent, as the case may be,
shall be entitled to recover such corresponding amount from such Lender. If such
Lender does not pay such
54
corresponding amount forthwith upon the Administrative Agent's or, as the case
may be, the Canadian Agent's demand therefor, the Administrative Agent or the
Canadian Agent, as the case may be, will promptly notify the applicable Borrower
and such Borrower shall immediately pay such corresponding amount to the
Administrative Agent or the Canadian Agent, as the case may be. The
Administrative Agent or the Canadian Agent, as the case may be, shall also be
entitled to recover from such Lender or such Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent or the
Canadian Agent, as the case may be, to such Borrower to the date such
corresponding amount is recovered by the Administrative Agent or the Canadian
Agent, as the case may be, at a per annum rate equal to the Federal Funds Rate.
2.8 TERM.
The obligation of the Lenders to make Revolving Loans and to issue
Banker's Acceptances shall expire at the Administrative Agent's close of
business in Charlotte, North Carolina on the U.S. Maturity Date or the Canadian
Maturity Date, as the case may be, or such earlier date if the Commitments are
terminated pursuant to Section 11.2. On the U.S. Maturity Date or the Canadian
Maturity Date, as the case may be, the entire outstanding principal balance of
all amounts outstanding under the U.S. Revolving Loan Commitment or the Canadian
Revolving Loan Commitment, as the case may be, together with accrued but unpaid
interest and all other sums owing under this Agreement, shall be due and payable
in full, unless accelerated sooner pursuant to Section 11.2.
2.9 REVOLVING NOTES.
The Revolving Loans made by each Lender shall be evidenced by a duly
executed promissory note of the applicable Borrower, dated as of the Closing
Date, in an original principal amount equal to such Lender's U.S. Revolving Loan
Commitment or Canadian Revolving Loan Commitment, as applicable, and
substantially in the form of Exhibit F.
2.10 REDUCTION OF REVOLVING LOAN COMMITMENTS.
Upon at least three (3) Business Days' notice, (a) the Borrowers may,
from time to time, permanently reduce the Canadian Revolving Loan Commitment in
whole or in part; provided that, (i) such reduction must be in a minimum amount
of $1,000,000 and in integral multiples of $1,000,000 above such amount and (ii)
no reduction shall be made which would reduce the Canadian Revolving Loan
Commitment to an amount less than the sum of Canadian Revolving Loans then
outstanding plus Canadian LOC Obligations outstanding plus the aggregate Face
Amount of Bankers' Acceptances; and (b) the U.S. Borrowers may from time to time
permanently reduce the U.S. Revolving Loan Commitment to an amount no less than
$25,000,000; provided that, (i) such reduction must be in a minimum amount of
$3,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no
reduction shall be made which would reduce the U.S. Revolving Loan Commitment to
an amount less than the sum of U.S. Revolving Loans then outstanding plus U.S.
LOC Obligations then outstanding.
55
ARTICLE III
CASH DOMINION ARRANGEMENTS
3.1 U.S. LOCKBOX ARRANGEMENTS.
(a) The U.S. Borrowers shall have each established and shall maintain
one or more lockboxes (each a "U.S. Lockbox") with financial institutions
selected by them and reasonably acceptable to the Administrative Agent (each a
"U.S. Lockbox Bank") and shall instruct all account debtors on the Accounts of
each U.S. Credit Party to remit all payments to its respective U.S. Lockboxes.
All amounts received by the U.S. Credit Parties from any account debtor, in
addition to all other cash proceeds from the U.S. Collateral, shall be promptly
deposited into the applicable U.S. Lockbox Account (as defined below).
(b) Each U.S. Credit Party, the Administrative Agent and each U.S.
Lockbox Bank shall enter into three party agreements in the form of Exhibit I-1
hereto (each a "Lockbox Agreement"), providing, among other things, for the
following (except as may otherwise be consented to by the Administrative Agent):
(i) The U.S. Credit Parties will open and establish
for the benefit of the Administrative Agent on behalf of the
U.S. Lenders an account at each U.S. Lockbox Bank (each a
"U.S. Lockbox Account").
(ii) During any Cash Dominion Period and upon notice
by the Administrative Agent to the U.S. Lockbox Bank, so
directing (without further consent by any U.S. Borrower
("Notice of Cash Dominion"), all receipts held in the U.S.
Lockboxes shall be remitted daily to the appropriate U.S.
Lockbox Account. All funds deposited into the U.S. Lockbox
Accounts on any Business Day shall be transferred to the
applicable Wachovia Cash Collateral Account. All funds
deposited prior to 2:00 p.m. (EST) on any Business Day to the
Wachovia Cash Collateral Account shall be applied by the
Administrative Agent on the same Business Day to reduce the
then outstanding balance of the U.S. Revolving Loans and to
pay accrued interest thereon and to pay any other outstanding
Obligations of the U.S. Borrowers which are then due and
payable hereunder. All amounts received directly by the U.S.
Credit Parties from any account debtor, in addition to all
other cash proceeds from the U.S. Collateral, shall be held in
trust by the U.S. Credit Parties and promptly deposited into
the applicable U.S. Lockbox Account during the aforesaid Cash
Dominion Period or, if made by wire transfer, directly to the
Wachovia Cash Collateral Account.
(iii) All funds deposited into the Wachovia Cash
Collateral Account and all funds in all U.S. Lockbox Accounts
during any Cash Dominion Period, shall immediately fall under
the sole dominion and control of the Administrative Agent, and
the U.S. Credit Parties shall obtain the agreement by the U.S.
Lockbox
56
Banks to waive any offset rights against the funds so
deposited. The Administrative Agent assumes no responsibility
for the U.S. Lockbox arrangements, including without
limitation, any claim of accord and satisfaction or release
with respect to deposits accepted by the U.S. Lockbox Banks
thereunder.
(iv) Prior to a Cash Dominion Period, the U.S. Credit
Parties may close U.S. Lockboxes and/or open new U.S.
Lockboxes with the prior written consent of the Administrative
Agent and subject to prior execution and delivery to the
Administrative Agent of Lockbox Agreements consistent with the
provisions of this Section 3.1(b) and in form and substance
satisfactory to the Administrative Agent.
(v) Notwithstanding the foregoing to the contrary,
with respect to U.S. Lockboxes and related Lockbox Accounts in
existence prior to the Closing Date, the U.S. Borrowers may,
in lieu of entering into a Lockbox Agreement, deliver a
Lockbox Letter or Blocked Account Agreement, countersigned by
the applicable U.S. Lockbox Bank.
(c) The U.S. Borrowers hereby authorize each U.S. Lender to charge from
time to time against any or all of the U.S. Credit Parties' accounts with such
U.S. Lender any of the Obligations which are then due and payable by such U.S.
Borrowers. Each U.S. Lender receiving any payment as a result of charging any
such account shall promptly notify the Administrative Agent thereof and make
such arrangements as the Administrative Agent shall request to share the benefit
thereof in accordance with Section 4.8.
3.2 CANADIAN LOCKBOX ARRANGEMENTS.
(a) The Canadian Credit Parties shall have each established and shall
maintain one or more lockboxes (each a "Canadian Lockbox") with financial
institutions selected by them and reasonably acceptable to the Administrative
Agent (each a "Canadian Lockbox Bank") and shall instruct all account debtors on
the Accounts of each Canadian Credit Party to remit all payments to its
respective Canadian Lockboxes. All amounts received by the Canadian Credit
Parties from any account debtor, in addition to all other cash proceeds from the
Canadian Collateral, shall be promptly deposited into the applicable Canadian
Lockbox Account (as defined below).
(b) Each Canadian Credit Party, the Canadian Agent and each Canadian
Lockbox Bank shall enter into three party agreements in the form of Exhibit I-1
hereto (each a "Lockbox Agreement"), providing, among other things, for the
following (except as may otherwise be consented to by the Administrative Agent):
(i) The Canadian Credit Parties will open and
establish for the benefit of the Canadian Agent on behalf of
the Canadian Lenders an account at each Canadian Lockbox Bank
(each a "Canadian Lockbox Account").
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(ii) During any Cash Dominion Period and upon notice
by the Administrative Agent to the Canadian Lockbox Bank, so
directing (without further consent by any Canadian Borrower
("Notice of Cash Dominion"), all receipts held in the Canadian
Lockboxes shall be remitted daily to the appropriate Canadian
Lockbox Account. All funds deposited into the Canadian Lockbox
Accounts on any Business Day shall be transferred to the
applicable Canadian Cash Collateral Account. All funds
deposited on any Business Day to the Canadian Cash Collateral
Account shall be applied by the Administrative Agent on the
following Business Day to reduce the then outstanding balance
of the Canadian Revolving Loans and to pay accrued interest
thereon and to pay any other outstanding Obligations of the
Canadian Borrowers which are then due and payable hereunder;
provided that for the purpose of determining the availability
of Canadian Revolving Loans hereunder, such funds deposited
into the Canadian Cash Collateral Account shall be deemed to
have reduced the outstanding Canadian Revolving Loans on the
Business Day such funds were deposited into such account. All
amounts received directly by the Canadian Credit Parties from
any account debtor, in addition to all other cash proceeds
from the Canadian Collateral, shall be held in trust by the
Canadian Credit Parties and promptly deposited into the
applicable Canadian Lockbox Account during the aforesaid Cash
Dominion Period or, if made by wire transfer, directly to the
Canadian Cash Collateral Account.
(iii) All funds deposited into the Canadian Cash
Collateral Account and all funds in all Canadian Lockbox
Accounts during any Cash Dominion Period, shall immediately
fall under the sole dominion and control of the Administrative
Agent, and the Canadian Credit Parties shall obtain the
agreement by the Canadian Lockbox Banks to waive any offset
rights against the funds so deposited. The Canadian Agent
assumes no responsibility for the Canadian Lockbox
arrangements, including without limitation, any claim of
accord and satisfaction or release with respect to deposits
accepted by the Canadian Lockbox Banks thereunder.
(iv) Prior to a Cash Dominion Period, the Canadian
Credit Parties may close Canadian Lockboxes and/or open new
Canadian Lockboxes with the prior written consent of the
Canadian Agent and subject to prior execution and delivery to
the Canadian Agent of Lockbox Agreements consistent with the
provisions of this Section 3.2(b) and in form and substance
satisfactory to the Canadian Agent.
(v) Notwithstanding the foregoing to the contrary,
with respect to Canadian Lockboxes and related Lockbox
Accounts in existence prior to the Closing Date, the Canadian
Borrowers may, in lieu of entering into a Lockbox Agreement,
deliver a Lockbox Letter or Blocked Account Agreement,
countersigned by the applicable Canadian Lockbox Bank.
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(c) The Canadian Borrowers hereby authorize each Canadian Lender to
charge from time to time against any or all of the Canadian Credit Parties'
accounts with such Canadian Lender any of the Obligations which are then due and
payable by such Canadian Borrowers. Each Canadian Lender receiving any payment
as a result of charging any such account shall promptly notify the Canadian
Agent thereof and make such arrangements as the Agents shall request to share
the benefit thereof in accordance with Section 4.8.
3.3 MAINTENANCE OF ACCOUNT.
Each Agent shall maintain an account on its books in the name of the
U.S. Borrowers or the Canadian Borrowers, as applicable, in which such Borrowers
will be charged with all loans and advances made by the applicable Lenders to
such Borrowers or for such Borrowers' account, including the Revolving Loans,
the LOC Obligations, the BA Obligations and any other Obligations, including any
and all costs, expenses and attorney's fees which the Agents may incur,
including, without limitation, in connection with the exercise by or for the
Lenders of any of the rights or powers herein conferred upon the Agents (other
than in connection with any assignments or participations by any Lender) or in
the prosecution or defense of any action or proceeding by or against any
Borrower, any other Credit Party or the Lenders concerning any matter arising
out of, connected with, or relating to this Credit Agreement or the Accounts, or
any Obligations owing to the Lenders by any Borrower. The Borrowers will be
credited in accordance with Section 3.1 or 3.2 above, as applicable, with all
amounts received by the Lenders from the Borrowers or from others for the
Borrowers' account, including, as above set forth, all amounts received by the
Agents in payment of Accounts. In no event shall prior recourse to any Accounts
or other Collateral be a prerequisite to an Agent's right to demand payment of
any Obligation upon its maturity. Further, it is understood that the Agents
shall have no obligation whatsoever to perform in any respect any of the Credit
Parties' contracts or obligations relating to the Accounts.
3.4 STATEMENT OF ACCOUNT
After the end of each month the Agents shall send the applicable
Borrowers (directed to the Borrowers' Huntsville, Alabama office in the case of
the U.S. Borrowers and to the Borrowers' London, Ontario office in the case of
the Canadian Borrowers, with a copy to the Borrowers' Huntsville, Alabama
office) a statement showing the accounting for the charges, loans, advances and
other transactions occurring between the Lenders and the applicable Borrowers
during that month. The monthly statements, absent manifest error, shall be
deemed correct and binding upon the applicable Borrowers and shall constitute an
account stated between the applicable Borrowers and the Lenders unless the
applicable Agent receives a written statement of the applicable Borrowers'
exceptions within thirty (30) days after same is mailed to the applicable
Borrowers.
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ARTICLE IV
ADDITIONAL PROVISIONS REGARDING LOANS AND LETTERS OF CREDIT
4.1 CONTINUATIONS AND CONVERSIONS.
(a) U.S. Borrowers. The U.S. Borrowers shall have the option, on any
Business Day, to continue an existing Eurodollar Loan into a subsequent Interest
Period, to convert a Base Rate Loan into a Eurodollar Loan or to convert a
Eurodollar Loan into a Base Rate Loan; provided, however, that (i) each such
continuation must be requested by the U.S. Borrowers pursuant to a written
Notice of Continuation/Conversion, in the form of Exhibit D, in compliance with
the terms set forth below and (ii) except as provided in Section 4.11,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable thereto; (iii) Eurodollar Loans may be continued
and Base Rate Loans may be converted into Eurodollar Loans only if no Default or
Event of Default is in existence on the date of continuation or conversion; and
(iv) failure by the U.S. Borrowers to properly continue a Eurodollar Loan at the
end of an Interest Period shall be deemed a conversion to a Base Rate Loan. Each
continuation or conversion must be requested by the U.S. Borrowers, directed to
the Administrative Agent at the address set forth on Schedule 1.1A hereto, no
later than 11:00 a.m., (A) on the date of a requested conversion of a Eurodollar
Loan to a Base Rate Loan or (B) three (3) Business Days prior to the date of a
requested continuation of a Eurodollar Loan or conversion of a Base Rate Loan to
a Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which shall set
forth (x) whether the applicable U.S. Borrower wishes to continue or convert
such Loans and (y) if the request is to continue a Eurodollar Loan or convert a
Base Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto. The
Administrative Agent shall give each U.S. Lender notice as promptly as
practicable of any such proposed extension or conversion pursuant to this
section.
(b) Canadian Borrowers.
(i) The Canadian Borrowers shall have the option, on
any Business Day, to continue an existing Eurodollar Loan into
a subsequent Interest Period, to convert a CA U.S. Base Rate
Loan into a Eurodollar Loan or to convert a Eurodollar Loan
into a CA U.S. Base Rate Loan; provided, however, that (A)
each such continuation must be requested by the Canadian
Borrowers, directed to the Canadian Agent at the address set
forth on Schedule 1.1A hereto, pursuant to a written Notice of
Continuation/Conversion, in the form of Exhibit D, in
compliance with the terms set forth below and (B) except as
provided in Section 4.11, Eurodollar Loans may be converted
into CA U.S. Base Rate Loans only on the last day of an
Interest Period applicable thereto; (C) Eurodollar Loans may
be continued and CA U.S. Base Rate Loans may be converted into
Eurodollar Loans only if no Default or Event of Default is in
existence on the date of continuation or conversion; and (D)
failure by the Canadian Borrowers to properly continue a
Eurodollar Loan at the end of an Interest Period shall be
deemed a conversion to a CA U.S. Base Rate Loan. Each
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continuation or conversion must be requested by the Canadian
Borrowers no later than 11:00 a.m., Toronto, Ontario time, (x)
on the date of a requested conversion of a Eurodollar Loan to
a Base Rate Loan or (y) three (3) Business Days prior to the
date of a requested continuation of a Eurodollar Loan or
conversion of a CA U.S. Base Rate Loan to a Eurodollar Loan,
in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Canadian Agent which
shall set forth (1) whether the Canadian Borrowers wish to
continue or convert such Loans and (2) if the request is to
continue a Eurodollar Loan or convert a CA U.S. Base Rate Loan
to a Eurodollar Loan, the Interest Period applicable thereto.
The Canadian Agent shall give each Canadian Lender notice as
promptly as practicable of any such proposed extension or
conversion pursuant to this section.
(ii) The Canadian Borrowers shall have the option, on
any Business Day, to convert a Canadian Prime Rate Loan into a
Bankers' Acceptance, to continue a maturing Bankers'
Acceptance in accordance with Section 2.5 or to convert a
maturing Bankers' Acceptance into a Canadian Prime Rate Loan;
provided, however, (A) each such continuation or conversion
must be requested by the Canadian Borrowers pursuant to an
irrevocable notice to the Canadian Agent, substantially in the
form of Exhibit D, in compliance with the terms set forth
below, (B) the Canadian Borrowers must comply with all the
requirements of Section 2.5, and (C) failure by the Canadian
Borrowers to properly continue a Bankers' Acceptance shall be
deemed a conversion to a Canadian Prime Rate Loan. Each
continuation or conversion must be requested by the Canadian
Borrowers no later than 11:00 a.m., Toronto, Ontario time, (x)
one Business Day prior to the date of a requested conversion
of a Bankers' Acceptance to a Canadian Prime Rate Loan or (y)
one Business Day prior to the date of a requested continuation
of a Bankers' Acceptance or conversion of a Canadian Prime
Rate Loan to a Bankers' Acceptance, in each case pursuant to
an irrevocable notice submitted to the Canadian Agent which
shall set forth (1) that the Loans to be continued or
converted are Canadian Prime Rate Loans, (2) whether the
Canadian Borrowers wish to continue or convert such Loans and
(3) if the request is to continue a Bankers' Acceptance or
convert a Canadian Prime Rate Loan to a Bankers' Acceptance,
the maturity date applicable thereto. The Canadian Agent shall
give each Canadian Lender notice as promptly as practicable of
any such proposed continuation or conversion pursuant to this
Section.
4.2 INTEREST.
(a) Interest Rate. All U.S. Base Rate Loans shall accrue interest at
the U.S. Base Rate, plus the Applicable Percentage. All Canadian Prime Rate
Loans shall accrue interest at the Canadian Prime Rate, plus the Applicable
Percentage, payable in Canadian Dollars. All CA U.S. Base Rate Loans shall
accrue interest at the CA U.S. Base Rate, plus the Applicable Percentage,
payable in U.S. dollars. All Eurodollar Loans shall accrue interest at the
Adjusted Eurodollar Rate for the applicable Interest Period.
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(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing (but not
timely paid) hereunder or under the other Credit Documents (including without
limitation fees and expenses) may, at the election of the Administrative Agent,
and shall at the direction of the Required Lenders, bear interest, payable on
demand, at a per annum rate equal to the U.S. Base Rate, plus the sum of the
Applicable Percentage for Base Rate Loans and two percent (2%) per annum.
(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls on a
date which is not a Business Day, such Interest Payment Date shall be deemed to
be the next succeeding Business Day, except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding day.
(d) Computation of Interest. All computations of interest hereunder on
Eurodollar Loans and U.S. Base Rate Loans shall be made on the basis of the
actual number of days elapsed over a year of 360 days. All computations of
interest hereunder on all Canadian Base Rate Loans and Bankers' Acceptances
shall be made on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be.
(e) Interest Act (Canada). Each Borrower hereby acknowledges that the
rate or rates of interest applicable to certain of the Loans and fees as
specified hereunder may be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed. For purposes of the Interest Act
(Canada), if interest computed on the basis of a 360-day year is payable for any
part of the calendar year, the equivalent yearly rate of interest may be
determined by multiplying the specified rate of interest by the number of days
(365 or 366) in such calendar year and dividing such product by 360. For the
purpose of the Interest Act (Canada) and any other purpose, (i) the principle of
deemed reinvestment shall not apply to any interest calculation under this
Agreement, and (ii) the rates of interest stipulated in this Agreement are
intended to be nominal rates and not effective rates or yields.
4.3 PLACE AND MANNER OF PAYMENTS.
All payments of principal, interest and fees in connection with the
Canadian Revolving Loans, BA Obligations and Canadian LOC Obligations shall be
made by the Borrowers to the Canadian Agent at its offices located at the
address set forth on Schedule 1.1A hereto on the date due by 2:00 p.m., Toronto,
Ontario time, (in Canadian Dollars or U.S. Dollars, as applicable) in
immediately available funds or by direct charge against the Canadian Revolving
Loan Commitment, if available, pursuant to Section 3.2(b) hereof, in each case,
without setoff, deduction, counterclaim or withholding of any kind. All other
payments of principal, interest, fees, expenses and other amounts to be made by
the Borrowers under this Agreement (including, but not limited to, the U.S.
Revolving Loans) shall be received not later than 2:00 p.m. (EST), on the date
when due in U.S. Dollars and in immediately available funds or by direct charge
against the U.S. Revolving Loan Commitment, if available, pursuant to Section
3.1(b) hereof, in each case, without setoff, deduction, counterclaim or
withholding of any kind, by the Administrative Agent at its offices located at
the address set forth on Schedule 1.1A hereto. A Borrower shall, at the time it
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makes any payment under this Agreement, specify to the Administrative Agent, or
the Canadian Agent as applicable, the Loans, Letters of Credit, fees or other
amounts payable by the Borrowers hereunder to which such payment is to be
applied (and in the event that it fails to specify, or if such application would
be inconsistent with the terms hereof, the Administrative Agent, or the Canadian
Agent as applicable, shall distribute such payment to the Lenders in the manner
described in Section 4.6). The Canadian Agent shall inform the Administrative
Agent and the Administrative Agent shall inform the Canadian Agent, by telecopy
as of the first Business Day of each month, of all principal, interest or fees
received from the Borrowers during the prior month, except for fees received
pursuant to Section 4.5(c). The Administrative Agent or the Canadian Agent, as
applicable, will distribute such payments to the applicable Lenders on the date
of receipt if any such payment is received prior to 2:00 p.m. (EST or Toronto,
Ontario time, as applicable); otherwise the Administrative Agent or the Canadian
Agent, as applicable, will distribute such payment to the applicable Lenders on
the next succeeding Business Day. The Borrowers' obligations to the Lenders with
respect to such payments shall be discharged by making such payments to the
applicable agent pursuant to this Section 4.3 or if not timely paid or an Event
of Default then exists, may be added to the principal amount of the Revolving
Loans outstanding. Whenever any payment hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day (subject to accrual of interest and fees for the
period of such extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.
4.4 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrowers shall have the right to prepay
Revolving Loans and Bankers' Acceptances in whole or in part from time to time
without premium or penalty; provided, however, that (i) Eurodollar Loans may
only be prepaid on three (3) Business Day's prior written notice to the
Administrative Agent or the Canadian Agent, as the case may be, and any
prepayment of Eurodollar Loans will be subject to Section 4.14, (ii) each such
partial prepayment of Eurodollar Loans shall be in the minimum principal amount
of $1,000,000, and (iii) that portion of the Canadian Revolving Loan Commitment
subject to the creation of a Bankers' Acceptance may be prepaid prior to the
maturity of such Bankers' Acceptance only in accordance with Section 2.5(g).
Amounts prepaid under this Section 4.4(a) shall be applied as the Borrowers may
elect; provided, that (A) if the U.S. Borrowers shall fail to specify a
voluntary prepayment as to the U.S. Revolving Loans then such prepayment shall
be applied first to U.S. Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities and (B) if the Canadian Borrowers shall fail
to specify a voluntary prepayment as to the Canadian Revolving Loans or Bankers'
Acceptances, then such prepayments shall be applied (1) in the case of funds
received in Canadian Dollars, to the Canadian Revolving Loans and Banker's
Acceptances (first to Canadian Prime Rate Loans and then to Bankers' Acceptances
in direct order of maturities) and (2) in the case of funds received in U.S.
Dollars, to the Canadian Revolving Loans (first to CA U.S. Base Rate Loans and
then to Eurodollar Loans, in direct order of Interest Period maturities).
(b) Mandatory Prepayments.
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(i) Revolving Loan Overadvance. If, at any time (A)
the sum of U.S. Revolving Loans outstanding plus Canadian
Revolving Loans outstanding plus LOC Obligations plus BA
Obligations exceeds the lesser of the Total Borrowing Base and
$37,500,000; (B) the U.S. Revolving Loans outstanding plus the
U.S. LOC Obligations outstanding exceed the lesser of the U.S.
Borrowing Base and the U.S. Revolving Loan Commitment; (C) the
Canadian Revolving Loans outstanding plus Canadian LOC
Obligations outstanding plus BA Obligations exceed the lesser
of the Canadian Borrowing Base and the Canadian Revolving Loan
Commitment; (D) all Indebtedness for borrowed money of the
Company or any Subsidiary of the Company hereunder in an
aggregate principal amount which, together with the aggregate
amount of Attributable Indebtedness deemed to be outstanding
in respect of all Sale/Leaseback Transactions entered into
pursuant to clause (a) Section 4.4 of the 2008 Senior Note
Indenture (exclusive of any such Sale/Leaseback Transaction
otherwise permitted under clauses (a) through (h) of such
Indenture), shall exceed 10% of Consolidated Net Tangible
Assets (with each of the defined terms used in this subsection
(D) having the meaning assigned to such terms in the 2008
Senior Note Indenture), then the Borrowers (or the applicable
Borrower) shall immediately make a payment hereunder in an
amount equal to such excess. Payments made under (A) shall be
applied first pro rata to U.S. Base Rate Loans and Canadian
Base Rate Loans and then to Eurodollar Loans (pro rata between
those made under the Canadian Revolving Loan Commitment and
the U.S. Revolving Loan Commitment) in direct order of
Interest Period maturities and then to Bankers' Acceptances in
direct order of Interest Period maturities. Payments made
under (B) shall be applied first to U.S. Base Rate Loans and
then to Eurodollar Loans in direct order of Interest Period
maturities. Payments made under (C) shall be applied first to
Canadian Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities and then to
Bankers' Acceptances in direct order of Interest Period
maturities. Prepayments made on Bankers' Acceptances shall be
made in accordance with Section 2.5(g).
(ii) Asset Sales. Immediately upon the receipt by any
Credit Party of proceeds from any (A) Asset Disposition, the
Borrowers shall prepay the Loans in an amount equal to 100% of
the Net Proceeds of such Asset Disposition (such prepayment to
be applied as set forth in Section 4.4(c) below) or (B) any
sale, transfer or other disposition of assets or properties
permitted by Section 9.5(f), the Borrowers shall prepay the
Loans in an amount necessary to cause Excess Availability
immediately following such prepayment to be greater than
$10,000,000 (such prepayment to be applied as set forth in
Section 4.4(c) below.
(iii) Casualty Loss. To the extent of cash proceeds
received in connection with a Casualty Loss by any Credit
Party with respect to the Collateral, the Borrowers shall
prepay the Loans in an amount equal to one hundred percent
(100%) of such cash proceeds if the Administrative Agent shall
have elected to apply the proceeds realized from such Casualty
Loss to the prepayment of the Loans (such prepayment to be
applied as set forth in Section 4.4(c) below).
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(c) Application of Certain Prepayments. All amounts required to prepay
Loans pursuant to Section 4.4(b)(ii) or (iii) above shall be applied (i) for any
disposition set forth in Section 4.4(b)(ii)(B) above, to the U.S. Revolving
Loans (first to Base Rate Loans and then to Eurodollar Loans in direct order of
maturities), (ii) for an Asset Disposition or Casualty Loss set forth in Section
4.4(b)(ii)(A) or Section 4.4(b)(iii) above, in connection with U.S. Collateral,
to the U.S. Revolving Loans (first to Base Rate Loans and then to Eurodollar
Loans in direct order of maturities) and (iii) for an Asset Disposition or
Casualty Loss set forth in Section 4.4(b)(ii)(A) or Section 4.4(b)(iii) above in
connection with the Canadian Collateral, (A) in the case of proceeds received in
Canadian Dollars, to the Canadian Revolving Loans and Banker's Acceptances
(first to Canadian Prime Rate Loans and then to Bankers' Acceptances in direct
order of maturities) and (B) in the case of proceeds received in U.S. Dollars,
to the Canadian Revolving Loans (first to CA U.S. Base Rate Loans and then to
Eurodollar Loans, in direct order of maturities). All prepayments shall be
subject to Section 4.14. Payments on Loans denominated in U.S. Dollars shall be
made in U.S. Dollars and payments on Loans denominated in Canadian Dollars shall
be made in Canadian Dollars.
4.5 FEES.
(a) Unused Fees. In consideration of the Revolving Loan Commitments
being made available by the Lenders hereunder, (i) the U.S. Borrowers agree to
pay to the Administrative Agent, for the account of the U.S. Lenders, a per
annum fee equal to the Applicable Percentage for the Unused Fees (calculated on
the basis of the actual number of days elapsed in a 360 day year) on the U.S.
Unutilized Revolving Commitment and (ii) the Canadian Borrowers agree to pay to
the Canadian Agent, for the account of the Canadian Lenders, a per annum fee
equal to the Applicable Percentage for the Unused Fees (calculated on the basis
of the actual number of days elapsed in a 365 or 366 day year, as the case may
be) on the Canadian Unutilized Revolving Commitment (collectively, the "Unused
Fees"). The accrued Unused Fees shall be due and payable quarterly in arrears on
the last day of each fiscal quarter (as well as on the U.S. Maturity Date and on
any date that a Revolving Loan Commitment is reduced) for the fiscal quarter
then ending (or portion thereof), beginning with the first of such dates to
occur after the Closing Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the
issuance of Letters of Credit hereunder, the U.S. Borrowers
agree to pay to the applicable Issuing Lender in respect of
outstanding U.S. Letters of Credit for the pro rata benefit of
the U.S. Lenders (based on each U.S. Lender's U.S. Revolving
Loan Commitment Percentage of the U.S. Revolving Loan
Commitment (calculated on the basis of the actual number of
days elapsed in a 360 day year)) and, the Canadian Borrowers
agree to pay to the applicable Issuing Lender in respect of
outstanding Canadian Letters of Credit for the pro rata
benefit of the Canadian Lenders (based on each Canadian
Lender's Canadian Revolving Loan Commitment Percentage of the
Canadian Revolving Commitment (calculated on the basis of the
actual number of
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days elapsed in a 365 or 366 day year, as the case may be)),
an annual fee (the "Letter of Credit Fee") equal to the
Applicable Percentage for the Letter of Credit Fee on the
average daily maximum amount available to be drawn under each
such Letter of Credit from the date of issuance to the date of
expiration. The Letter of Credit Fee will be payable monthly
in arrears on the last day of each calendar month and on the
U.S. Maturity Date or Canadian Maturity Date, as the case may
be.
(ii) Issuing Lender Fee. In addition to the Letter of
Credit Fees payable pursuant to subsection (i) above, each of
the Borrowers shall pay to the applicable Issuing Lender for
its own account, without sharing by the other Lenders, a fee
equal to one-eighth of one percent (0.125%) per annum on the
total sum of all Letters of Credit issued by the Issuing
Lender, such fee to be paid monthly in arrears on the last day
of each calendar month (as well as on the U.S. Maturity Date
or the Canadian Maturity Date, as the case may be) (the
"Issuing Lender Fee").
(c) Administrative Fees. The U.S. Borrowers agree to pay to the
Administrative Agent, for its own account, an annual fee as agreed to between
the U.S. Borrowers and the Administrative Agent in the Administrative Agent Fee
Letter.
(d) Authorization to Charge Account. The Borrowers hereby authorize the
Administrative Agent or the Canadian Agent, as the case may be, to charge the
Borrowers' Revolving Loan accounts with the amount of all payments and fees due
hereunder to the Lenders, the Administrative Agent, the Canadian Agent and the
Issuing Lender as and when such payments become due. The Borrowers confirm that
any charges which the applicable Agent may so make to the Borrowers' Revolving
Loan accounts as herein provided will be made as an accommodation to the
Borrowers and solely at the applicable Agent's discretion.
4.6 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each creation of Bankers' Acceptances,
each payment or prepayment of principal of any Loan, each payment of fees (other
than the Issuing Lender Fee retained by each of the Issuing Lenders for its own
account and the administrative fees retained by the Administrative Agent and the
Canadian Agent for its own account), each reduction of the U.S. Revolving Loan
Commitment or the Canadian Revolving Loan Commitment, and each conversion or
continuation of any Loan, shall be allocated pro rata among the relevant Lenders
in accordance with the respective U.S. Revolving Loan Commitment Percentages or
Canadian Revolving Loan Commitment Percentages, as applicable, of such Lenders;
it being understood that payments under the U.S. Revolving Loans shall be
allocated pro rata among the U.S. Lenders and payments under the Canadian
Revolving Loans shall be allocated pro rata among the Canadian Lenders (or, if
the Commitments of such Lenders have expired or been terminated, in accordance
with the respective principal amounts of the outstanding Loans, Bankers'
Acceptances and
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Participation Interests of such Lenders); provided that, if any Lender shall
have failed to pay its applicable pro rata share of any Revolving Loan, then any
amount to which such Lender would otherwise be entitled pursuant to this
subsection (a) shall instead be payable to the Administrative Agent or the
Canadian Agent, as applicable; provided further, that in the event any amount
paid to any Lender pursuant to this subsection (a) is rescinded or must
otherwise be returned by the Administrative Agent or the Canadian Agent, as
applicable, each Lender shall, upon the request of the Administrative Agent or
the Canadian Agent, as applicable, repay to the Administrative Agent or the
Canadian Agent, as applicable the amount so paid to such Lender, with interest
for the period commencing on the date such payment is returned by the
Administrative Agent or the Canadian Agent, as applicable until the date the
Administrative Agent or the Canadian Agent, as applicable receives such
repayment at a rate per annum equal to, during the period to but excluding the
date two (2) Business Days after such request, the Federal Funds Rate, and
thereafter, the U.S. Base Rate plus two percent (2%) per annum; and
(b) Letters of Credit. Each payment of unreimbursed drawings in respect
of LOC Obligations shall be allocated to each U.S. Lender pro rata in accordance
with its U.S. Lender Revolving Loan Commitment Percentage or to each Canadian
Lender pro rata in accordance with its Canadian Lender Revolving Loan Commitment
Percentage, as appropriate; provided that, if any Lender shall have failed to
pay its applicable pro rata share of any drawing under any Letter of Credit,
then any amount to which such Lender would otherwise be entitled pursuant to
this subsection (b) shall instead be payable to the Issuing Lender; provided
further, that in the event any amount paid to any Lender pursuant to this
subsection (b) is rescinded or must otherwise be returned by the Issuing Lender,
each Lender shall, upon the request of the Issuing Lender, repay to the
Administrative Agent for the account of the Issuing Lender the amount so paid to
such Lender, with interest for the period commencing on the date such payment is
returned by the Issuing Lender until the date the Issuing Lender receives such
repayment at a rate per annum equal to, during the period to but excluding the
date two (2) Business Days after such request, the Federal Funds Rate, and
thereafter, the U.S. Base Rate, plus two percent (2%) per annum.
4.7 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by an Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the Agents
in connection with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the Agents with respect to the
Collateral under or pursuant to the terms of the Security Documents;
SECOND, to payment of any fees owed to an Agent or an Issuing Lender
hereunder or under any other Credit Document;
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THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable attorneys' fees) of each of
the Lenders in connection with enforcing its rights under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to the
Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the Loans,
to the payment or cash collateralization of the outstanding LOC Obligations and
BA Obligations and all obligations of the Credit Parties in respect of Hedging
Agreements, pro rata, as set forth below;
SIXTH, to all other Obligations which shall have become due and payable
under the Credit Documents and not repaid pursuant to clauses "FIRST" through
"FIFTH" above;
SEVENTH, to all other Obligations which shall have become due and
payable and not repaid pursuant to clauses "FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, LOC
Obligations and BA Obligations held by such Lender bears to the aggregate then
outstanding Loans, LOC Obligations and BA Obligations) of amounts available to
be applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above;
and (c) to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Administrative
Agent in a cash collateral account and applied (x) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of Credit
and (y) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH", "SIXTH" and "SEVENTH"
above in the manner provided in this Section 4.7 and in the Security Documents.
4.8 SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan or Bankers' Acceptance, unreimbursed drawing with respect to any LOC
Obligations or any other obligation owing to such Lender under this Agreement
through the exercise of a right of setoff, banker's lien or counterclaim, or
pursuant to a secured claim under Section 506 of the U.S. Bankruptcy Code (or
similar provision of the Canadian bankruptcy laws) or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as
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provided for in this Agreement, such Lender shall promptly pay in cash or
purchase from the other applicable Lenders a participation in such Loans, LOC
Obligations, BA Obligations and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares as
provided for in this Agreement. The Lenders further agree among themselves that
if payment to a Lender obtained by such Lender through the exercise of a right
of setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each applicable Lender which shall have
shared the benefit of such payment shall, by payment in cash or a repurchase of
a participation theretofore sold, return its share of that benefit (together
with its share of any accrued interest payable with respect thereto) to each
Lender whose payment shall have been rescinded or otherwise restored. The
Borrowers agree that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan, LOC Obligation, BA
Obligation or other obligation in the amount of such participation. Except as
otherwise expressly provided in this Agreement, if any Lender or an Agent shall
fail to remit to an Agent or any other Lender an amount payable by such Lender
or such Agent to such Agent or such other Lender pursuant to this Agreement on
the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to such Agent or such other Lender at a rate per annum equal
to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section 4.8 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 4.8 to share in the benefits of any
recovery on such secured claim.
4.9 CAPITAL ADEQUACY.
If, after the date hereof, any Lender has determined that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender, or its parent corporation, with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's (or parent corporation's)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender, or its parent corporation, could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's (or parent corporation's) policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrowers, the
Borrowers shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender on an after-tax basis (after taking into
account applicable deductions and credits in respect of the amount indemnified)
for such reduction. Each determination by any such Lender of amounts owing under
this Section shall, absent manifest error, be conclusive and binding on the
parties hereto. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
4.10 INABILITY TO DETERMINE INTEREST RATE OR CREATE BANKERS'
ACCEPTANCES.
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(a) If prior to the first day of any Interest Period, (i) the
Administrative Agent shall have determined in good faith (which determination
shall be conclusive and binding upon the Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, (ii)
the Administrative Agent has received notice from the Required Lenders that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Eurodollar Loans during such Interest Period, or (iii) U.S. Dollar
deposits in the principal amounts of the Eurodollar Loans to which such Interest
Period is to be applicable are not generally available in the London interbank
market, the Administrative Agent shall give telecopy or telephonic notice
thereof to the Borrowers and the Lenders as soon as practicable thereafter, and
will also give prompt written notice to the Borrowers when such conditions no
longer exist. If such notice is given, (A) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(B) any Revolving Loans that were to have been converted on the first day of
such Interest Period to or continued as Eurodollar Loans shall be converted to
or continued as Base Rate Loans and (C) each outstanding Eurodollar Loan shall
be converted, on the last day of the then-current Interest Period thereof, to
Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made or continued as such, nor shall
the Borrowers have the right to convert Base Rate Loans to Eurodollar Loans.
(b) If the Canadian Agent determines in good faith, which determination
shall be final, conclusive and binding upon the Canadian Borrowers absent
manifest error, and notifies the Canadian Borrowers and each of the Canadian
Lenders that, by reason of circumstances affecting the money market (i) there is
no market for Bankers' Acceptances; or (ii) the demand for Bankers' Acceptances
is insufficient to allow the sale or trading of the Bankers' Acceptances created
and purchased hereunder, then,
(A) the right of the Canadian Borrowers to request a
borrowing by way of Bankers' Acceptances shall be suspended
until the Canadian Agent determines in good faith that the
circumstances causing such suspension no longer exist and the
Canadian Agent so notifies the Canadian Borrowers;
(B) any notice of requested Bankers' Acceptances
which is outstanding shall be canceled and the Bankers'
Acceptance requested therein shall not be made; and
(C) the Canadian Agent shall promptly notify the
Canadian Borrowers of the suspension of the Canadian
Borrowers' right to request a Bankers' Acceptance and of the
termination of any such suspension.
4.11 ILLEGALITY.
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Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Agreement, (a) such Lender
shall promptly give written notice of such circumstances to the Borrowers and
the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be suspended and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 4.14.
4.12 REQUIREMENTS OF LAW.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any Loans made or
issued by it or its obligation to make or issue any of the foregoing,
or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 4.13 and
changes in taxes measured by or imposed upon the overall net income, or
franchise tax imposed in lieu of such net income tax, of such Lender or
its applicable lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate or the
Acceptance Fee in respect of Bankers' Acceptances hereunder; or
(c) shall impose on such Lender any other condition (excluding
any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender, acting reasonably, deems to be material, of
making, converting into, continuing or maintaining Loans or issuing or
participating in Letters of Credit or creating or accepting Bankers' Acceptances
or to reduce any amount receivable hereunder in respect thereof, then, in any
such
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case, upon notice to the Borrowers from such Lender, through either of the
Agents, in accordance herewith, the Borrowers shall be obligated to promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender on an after-tax basis (after taking into account applicable
deductions and credits in respect of the amount indemnified) for such increased
cost or reduced amount receivable, provided that, in any such case, the
Borrowers may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Administrative Agent at least one (1)
Business Day's notice of such election, in which case the Borrowers shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 4.14. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 4.12, it shall provide
prompt notice thereof to the Borrowers, through the Administrative Agent,
certifying (x) that one of the events described in this Section 4.12 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section 4.12 submitted by such Lender, through the
Administrative Agent, to the Borrowers shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
4.13 TAXES.
(a) Except as provided below in this Section 4.13, all
payments made by the Borrowers under this Agreement, any Notes and any
documents relating hereto shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any court, or governmental body,
agency or other official, including interest, penalties and liabilities
with respect thereto ("Taxes"), excluding taxes measured by or imposed
upon the overall net income of any Lender or its applicable lending
office, or any branch or affiliate thereof, and all franchise taxes,
branch taxes, taxes on doing business or taxes on the overall capital
or net worth of any Lender or its applicable lending office, or any
branch or affiliate thereof, in each case imposed in lieu of net income
taxes (other than franchise taxes), imposed: (i) by the jurisdiction
under the laws of which such Lender, applicable lending office, branch
or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Agreement or any Notes. If any such non-excluded Taxes,
("Non-Excluded Taxes") are required to be withheld from any amounts
payable to an Agent or any Lender hereunder or under any Notes or other
documents relating thereto, (A) the Borrowers shall withhold and remit
such Taxes to the relevant authority when and as due, (B) the amounts
so payable to an Agent or such Lender shall be increased to the extent
necessary to yield to an Agent or such Lender (after payment of all
Non-Excluded Taxes, including Non-Excluded Taxes in respect of
additional amounts payable hereunder) interest or any such other
amounts payable
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hereunder or under the Notes or any other document relating hereto at
the rates or in the amounts specified in this Agreement and any Notes,
provided, however, that the Borrowers shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to increase
any such amounts payable to any U.S. Lender that is not organized under
the laws of the United States of America or a state thereof if such
Lender fails to comply with the requirements of paragraph (b) of this
Section 4.13 whenever any Non-Excluded Taxes are payable by the
Borrowers, and (C) as promptly as possible thereafter the Borrowers
shall send to such Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrowers showing prompt payment thereof. If
the Borrowers fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the
Borrowers shall indemnify an Agent and any Lender for any incremental
Taxes, interest or penalties that may become payable by an Agent or any
Lender as a result of any such failure. If a Lender shall change its
office that makes or maintains a Loan hereunder, the Borrowers shall
not be required to pay any increased amounts to the Lender in respect
of any Non-Excluded Taxes pursuant to this Section 4.13 over and above
any obligation to withhold or deduct any amount with respect to such
Non-Excluded Taxes that existed on the date the Lender changed such
office, unless the Lender changed the office at the request of the
Borrowers in which case the Borrower shall indemnify the Lender in
respect of such increased amounts. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(b) Each U.S. Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the
U.S. Borrowers under this Agreement or Notes to such Lender,
deliver to the U.S. Borrowers and the Administrative Agent two
duly completed copies of United States Internal Revenue
Service Form W-8BEN, W-8ECI, W-8 EXP, W-8IMY or W-9 (or
successor thereto or other appropriate form), or successor
applicable form, as the case may be, certifying that it is
entitled to receive payments under this Agreement and any
Notes without deduction, withholding or backup withholding of
any United States federal income taxes;
(B) deliver to the U.S. Borrowers and the
Administrative Agent two further copies of any such form or
certification on or before the date that any such form or
certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent
form previously delivered by it to the U.S. Borrowers; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the U.S. Borrowers or the
Administrative Agent; or
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(ii) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (A) represent to the U.S. Borrowers
(for the benefit of the U.S. Borrowers and the Administrative
Agent) that (x) it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, is not subject to
regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made
to any governmental authority, any application made to a
rating agency or qualification for any exemption from any tax,
securities law or other legal requirements, (y) is not a
10-percent shareholder for purposes of section 881(c)(3)(B) of
the Internal Revenue Code and (z) is not a controlled foreign
corporation receiving interest from a related person for
purposes of Section 881(c)(3)(C) of the Internal Revenue Code,
(B) agree to furnish to the U.S. Borrowers, on or before the
date of any payment by the U.S. Borrowers, with a copy to the
Administrative Agent, two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN, W-8ECI,
W-8EXP or W-8IMY, (or successor applicable form) certifying to
such Lender's legal entitlement at the date of such
certificate to an exemption from U.S. withholding tax under
the provisions of Section 881(c) of the Internal Revenue Code
with respect to payments to be made under this Agreement and
any Notes (and to deliver to the U.S. Borrowers and the
Administrative Agent two further copies of such form on or
before the date it expires or becomes obsolete and after the
occurrence of any event (including a change in its applicable
lending office) requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the U.S. Borrowers or the
Administrative Agent for filing and completing such forms),
and (C) agree, to the extent legally entitled to do so, upon
reasonable request by the U.S. Borrowers, to provide to the
U.S. Borrowers (for the benefit of the U.S. Borrowers and the
Administrative Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to
payments under this Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or
regulation has occurred after the date such Person becomes a
Lender hereunder which renders all such forms inapplicable or
which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so
advises the U.S. Borrowers and the Administrative Agent then
such Lender shall be exempt from such requirements. Each such
Lender will promptly notify the Administrative Agent and the
Borrowers of any changes in circumstances that could
reasonably modify or render invalid any claimed exemption.
Each Person that shall become a Lender or a participant of a
Lender pursuant to Section 14.3 shall, upon the effectiveness
of the related transfer, be required to provide all of the
forms, certifications and statements required pursuant to this
subsection (b); provided that in the case of a participant of
a Lender, the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such
participant of a Lender shall furnish all such
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required forms, certifications and statements to the Lender
from which the related participation shall have been
purchased.
(c) If any such Taxes shall be or become applicable after the
date of this Agreement to such payments by the Borrowers to a Lender,
such Lender shall use reasonable efforts to make, fund or maintain the
Loan or Loans, as the case may be, through another lending office
located in another jurisdiction so as to reduce, to the fullest extent
possible, the Borrowers' liability hereunder, if the making, funding or
maintenance of such Loan or Loans through such other office does not,
in the reasonable judgment of the Lender, materially affect the Lender
of such Loan. If the Borrowers are required to make any additional
payment to a Lender pursuant to this Section 4.13, and any such Lender
receives, or is entitled to receive, a credit against, remission for,
or repayment of, any tax paid or payable by it in respect of, or
calculated with reference to, the taxes giving rise to such payment,
such Lender shall, within a reasonable time after it receives such
credit, relief, remission or repayment, reimburse the Borrowers the
amount of any such credit, relief, remission or repayment.
4.14 COMPENSATION.
The Borrowers promise to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by a Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans or in creating Bankers' Acceptances
after such Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by a Borrower in making any
prepayment of a Eurodollar Loan after such Borrower has given a notice thereof
in accordance with the provisions of this Agreement and (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto or the repayment of a Bankers' Acceptance prior to
its maturity date. Such indemnification may include an amount equal to (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Percentage
included therein, if any) minus (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. Such a certificate as to any amounts
payable pursuant to this Section 4.14 submitted by a Lender, through the
Administrative Agent to the Lenders, shall be conclusive and binding in the
absence of manifest error. The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
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ARTICLE V
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Agreement is subject
to satisfaction of the following conditions (in form and substance acceptable to
the Administrative Agent):
(a) Executed Credit Documents. Receipt by the Administrative
Agent of duly executed copies of (i) this Agreement; (ii) the Revolving
Credit Notes; (iii) the Guaranty Agreements; (iv) each of the Security
Agreements; (v) the U.S. Pledge Agreement; and (vi) all other Credit
Documents.
(b) No Default; Representations and Warranties. As of the
Closing Date (i) there shall exist no Default or Event of Default and
(ii) all representations and warranties contained herein and in the
other Credit Documents shall be true and correct in all material
respects.
(c) Opinion of Counsel. Receipt by the Administrative Agent of
an opinion, or opinions, in form and substance satisfactory to the
Administrative Agent and the Canadian Agent, addressed to the Agents on
behalf of the Lenders and dated as of the Closing Date, from U.S. and
Canadian legal counsel to the Credit Parties which covers, among other
matters, valid corporate existence and authority, legality, validity
and binding effect of all loan, guaranty and security documents,
perfection of security interests, and, in connection with the execution
and delivery of the Credit Documents, the absence of any violation of
law or regulation or conflict with any existing contracts (including,
without limitation, that the granting of the security interests by the
Credit Parties pursuant to the Security Documents will not constitute a
violation of the 2008 Senior Note Indenture or the 2009 Senior Note
Indenture or require pro rata sharing of the Collateral with the 2008
Senior Noteholders or the 2009 Senior Noteholders).
(d) Corporate Documents. Receipt by the Administrative Agent
of the following:
(i) Charter Documents. Copies of the articles
or certificates of incorporation or other charter documents of
(A) each U.S. Borrower that is a party to a Credit Document,
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary
or assistant secretary as of the Closing Date to be true and
correct and (B) each Canadian Borrower that is a party to a
Credit Document, certified to be true and complete as of a
recent date by a secretary or assistant secretary as of the
Closing Date.
(ii) Resolutions. Copies of resolutions of the
Board of Directors or other comparable managing body of each
Credit Party that is party to a Credit
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Document, approving and adopting the Credit Documents to which
it is a party, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a
secretary or assistant secretary as of the Closing Date to be
true and correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of each Credit
Party that is a party to a Credit Document, certified by a
secretary or assistant secretary as of the Closing Date to be
true and correct and in force and effect as of such date.
(iv) Good Standing. Copies of (i) certificates
of good standing, existence or its equivalent with respect to
each Credit Party that is a party to a Credit Document,
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of organization
and (ii) where applicable, a certificate indicating payment of
all corporate franchise taxes certified as of a recent date by
the appropriate governmental taxing authorities.
(e) Compliance with Financial Obligations. The Credit Parties
shall be in compliance with all existing material financial obligations
owed to third parties.
(f) Personal Property Collateral. The Administrative Agent
shall have received:
(i) searches of filings under the UCC and PPSA (or
corresponding local laws) in the jurisdiction of the chief
executive office of each Credit Party, the jurisdiction of
organization of each Credit Party and each jurisdiction where
any Collateral is located or where a filing would need to be
made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no
Liens exist other than Permitted Liens;
(ii) duly completed financing statements under the
UCC and PPSA (or corresponding local laws) for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's reasonable discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) duly executed consents as are necessary, in the
Administrative Agent's reasonable discretion, to perfect the
Lenders' security interest in the Collateral including,
without limitation, such Acknowledgment Agreements from
lessors of real property as the Administrative Agent may
require; and
(iv) Blocked Account Agreements with respect to each
of the deposit accounts of the Credit Parties not maintained
with the Administrative Agent substantially in the form of
Exhibit I-3 or other tri-party agreements in form and
substance satisfactory to the Administrative Agent.
(g) No Material Adverse Effect. No event shall have occurred
since December 31, 2001 that has had or could be reasonably expected to
have a Material Adverse Effect.
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(h) Litigation. Except as disclosed in Schedule 6.10, no
litigation shall be pending or threatened which, in the reasonable
determination of the Administrative Agent, would have or reasonably be
expected to have a Material Adverse Effect.
(i) Consents and Approvals. Receipt by the Administrative
Agent of evidence that all material governmental, shareholder and third
party consents and approvals necessary or desirable in connection with
the execution and delivery of the Credit Documents and the consummation
of the transactions set forth therein.
(j) Officer's Certificate. The Administrative Agent shall have
received a certificate or certificates executed by a Senior Financial
Officer of the Company on behalf of the Credit Parties as of the
Closing Date stating that (A) each Credit Party is in compliance with
all existing material financial obligations, (B) all material
governmental, shareholder and third party consents and approvals, if
any, with respect to the Credit Documents and the other transactions
contemplated thereby have been obtained, (C) except as disclosed
pursuant to the Credit Agreement, no action, suit, investigation or
proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to effect a
member of the Consolidated Parties or any other transaction
contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could have or could be reasonably expected
to have a Material Adverse Effect, and (D) immediately after giving
effect to this Agreement, the other Credit Documents and the other
transactions contemplated therein to occur on such date, (1) each
Credit Party is Solvent, (2) no Default or Event of Default exists, (3)
all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (4)
the Consolidated Parties are in compliance with each of the financial
covenants set forth in Article VIII.
(k) Opening Borrowing Base Certificate. Receipt by each of the
Agents of a Borrowing Base Certificate as of the close of business on a
date acceptable to the Administrative Agent, substantially in the form
of Exhibit J and certified by a Senior Financial Officer of the Company
to be true and correct as of the Closing Date.
(l) Evidence of Insurance. Receipt by the Administrative Agent
of copies of insurance policies or certificates of insurance of the
Credit Parties evidencing general comprehensive liability and property
insurance meeting the requirements set forth in the Credit Documents,
including, without limitation, naming the Administrative Agent as loss
payee on behalf of the Lenders and each Lender as additional insured
and copies of credit insurance policies insuring foreign Accounts to be
included as Eligible Accounts Receivable.
(m) Corporate Structure. The corporate capital and ownership
structure of the Consolidated Parties shall be as described in Schedule
5.1(n).
(n) Other Indebtedness. Receipt by the Administrative Agent of
evidence that, after giving effect to the making of the Loans made on
the Closing Date, the Credit Parties
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shall have no Indebtedness other than the Indebtedness under the Credit
Documents and as disclosed on Schedule 6.9.
(o) Solvency Certificate. Receipt by the Administrative Agent
of an officer's certificate for each of the Credit Parties prepared by
a Senior Financial Officer of such Credit Party as to the financial
condition, solvency and related matters of such Credit Party, in each
case after giving effect to the initial borrowings under the Credit
Documents, in substantially the form of Exhibit K hereto.
(p) Sources and Uses; Payment Instructions. Receipt by the
Administrative Agent from the Company of (i) a statement of sources and
uses of funds covering all payments reasonably expected to be made by
the Company in connection with the transactions contemplated by the
Credit Documents to be consummated on the Closing Date, including an
itemized estimate of all fees, expenses and other closing costs and
(ii) payment instructions with respect to each wire transfer to be made
by the Agents on behalf of the Lenders or the Company or the Borrowers
on the Closing Date setting forth the amount of such transfer, the
purpose of such transfer, the name and number of the account to which
such transfer is to be made, the name and ABA number of the bank or
other financial institution where such account is located and the name
and telephone number of an individual that can be contacted to confirm
receipt of such transfer.
(q) 2009 Senior Notes. Issuance by the Company of at least
$110 million aggregate principal amount of the 2009 Senior Notes, on
terms that are satisfactory to the Administrative Agent. The
Administrative Agent shall have received a copy, certified by a Senior
Financial Officer of the Company as true and complete, of the 2009
Senior Note Indenture as originally executed and delivered, together
with all exhibits and schedules thereto.
(r) Financial Statements. The Administrative Agent shall have
received the Financial Statements described in Section 6.6 and
financial and operational projections for the Consolidated Parties
monthly for the fiscal year ending December 31, 2002 and annually for
each fiscal year thereafter through the fiscal year ending December 31,
2004.
(s) Fees and Expenses. All fees and expenses required to be
paid under this Agreement on or prior to the Closing Date shall have
been paid in full.
(t) Due Diligence. The Administrative Agent shall have
completed its due diligence with respect to the Company and its
Subsidiaries, including, without limitation its field examination, and
the results of such due diligence shall be satisfactory to the
Administrative Agent is all respects in its sole discretion.
(u) Agent for Service of Process. The Administrative Agent
shall have received satisfactory evidence that CT Corporation System
shall have been appointed as agent for service of process in the State
of North Carolina on behalf of the Company.
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(v) Minimum Excess Availability. The Credit Parties shall have
Excess Availability of at least $25,000,000 as of the Closing Date,
after giving effect to the payment of fees and expenses associated with
the closing of this Agreement, after giving effect to the making of
Loans and the application of the proceeds thereof to be made on the
Closing Date. Accounts payable of the Borrowers must be at a level and
in a condition reasonably acceptable to the Administrative Agent.
(w) Other. The receipt by the Administrative Agent of such
other documents, agreements or information as reasonably requested by
any Lender.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans or create Bankers' Acceptances, nor
shall the Issuing Lender be required to issue or extend a Letter of Credit,
unless:
(a) Notice. The applicable Borrower shall have delivered (i)
in the case of any Loan, a Notice of Borrowing, duly executed and
completed, by the time specified in Sections 2.1 or 2.3, as appropriate
and (ii) in the case of any Letter of Credit, the Issuing Lender shall
have received an appropriate request for issuance in accordance with
the provisions of Section 2.2 or 2.4, as applicable and (iii) in the
case of a Bankers' Acceptance, to the Canadian Agent, an appropriate
notice in accordance with Section 2.5;
(b) Representations and Warranties. The representations and
warranties made by a Credit Party in any Credit Document are true and
correct in all material respects at and as if made as of such date;
(c) No Default. No Default or Event of Default shall exist or
be continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have occurred
any Material Adverse Effect;
(e) Availability. Immediately after giving effect to the
making of a Loan or the issuance of a Letter of Credit or the creation
of a Bankers' Acceptance, as the case may be, the Borrowers shall be in
compliance with Section 4.4(b)(i) and shall have Excess Availability of
at least $2,000,000;
(f) 2008 Senior Note Indenture. Immediately after giving
effect to the making of a Loan or the issuance of a Letter of Credit or
the creation of a Banker's Acceptance, the Company shall not be in
violation of the terms of the 2008 Senior Note Indenture;
(g) 2009 Senior Note Indenture. Immediately after giving
effect to the making of a Loan or the issuance of a Letter of Credit or
the creation of a Banker's Acceptance, the Company shall not be in
violation of the terms of the 2009 Senior Note Indenture; and
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(h) Canadian Governmental Order. With respect to any request
for any Canadian Revolving Loan, the creation of any Bankers'
Acceptances, or the issuing of any Canadian Letter of Credit, no
requirement shall have been received by the Agents or any Lender or any
other Person in respect of any Canadian Credit Party, or otherwise
issued in respect of any Canadian Credit Party, from the Minister of
National Revenue for payment in excess of $250,000 pursuant to Section
224 or any successor section of the Income Tax Act (Canada) or Section
317 or any successor section of the Excise Tax Act (Canada) or any
comparable provision of similar legislation.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
or Bankers' Acceptance shall constitute a representation and warranty by the
applicable Borrower of the correctness of the matters specified in subsections
(b), (c), (d), (e), (f), (g) and (h) above.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrowers hereby represent and warrant to each Lender that:
6.1 ORGANIZATION AND GOOD STANDING.
Except as set forth on Schedule 6.1, each Credit Party resident in the
United States (i) is a corporation, limited partnership or a limited liability
company duly incorporated or formed, as the case may be, validly existing and in
good standing under the laws of the State of its incorporation or formation, as
the case may be, (ii) is duly qualified and in good standing as a foreign
corporation, limited partnership or limited liability company authorized to do
business in every jurisdiction where the failure to so qualify could have or
reasonably be expected to have a Material Adverse Effect, and (iii) has the
requisite corporate, limited partnership or limited liability company power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted. Each Credit Party resident in Canada (A) is a
corporation duly incorporated or amalgamated and validly subsisting under the
laws of its jurisdiction of incorporation, (B) is duly qualified and in good
standing as a foreign or extra-provincial corporation authorized to do business
in every jurisdiction where the failure to so qualify would have or reasonably
be expected to have a Material Adverse Effect and (C) has the corporate power
and authority to carry on its business as now conducted and as proposed to be
conducted.
6.2 DUE AUTHORIZATION.
Except as set forth on Schedule 6.2, each Credit Party (a) has the
requisite corporate, limited partnership or limited liability company power and
authority to execute, deliver and perform such of the Credit Documents to which
it is a party and to incur the obligations herein and therein provided for, and
(b) is duly authorized to, and has been authorized by all necessary corporate,
limited partnership or limited liability company action, to execute, deliver and
perform such of the Credit Documents to which it is a party.
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6.3 NO CONFLICTS.
With respect to each Credit Party, neither the execution and delivery
of the Credit Documents, nor the consummation of the transactions contemplated
therein, nor performance of and compliance with the terms and provisions thereof
will (a) violate or conflict in any material respect with any material provision
of its articles or certificate of incorporation or , certificate of limited
partnership or certificate of formation, bylaws, agreement of limited
partnership or limited liability company agreement (b) violate, contravene or
conflict in any material respect with any material law, regulation (including
without limitation Regulation U or Regulation X), order, writ, judgment,
injunction, decree or permit applicable to it, (c) violate, contravene or
conflict in any material respect with contractual provisions of, or cause an
event of default under, any indenture, loan agreement, mortgage, deed of trust,
contract or other agreement or instrument to which it is a party or by which it
may be bound, or (d) result in or require the creation of any material Lien upon
or with respect to its properties except in favor of the Lenders.
6.4 CONSENTS.
No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Agreement or any of the other Credit
Documents other than those consents which have been obtained and copies of which
have been delivered to the Administrative Agent.
6.5 ENFORCEABLE OBLIGATIONS.
This Agreement and the other Credit Documents have been duly executed
and delivered and constitute legal, valid and binding obligations of each Credit
Party (with regard to each agreement or instrument to which it is a party)
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy or insolvency laws or similar laws affecting creditors' rights
generally.
6.6 FINANCIAL CONDITION.
(a) The financial statements provided to the Lenders,
consisting of (i) an audited consolidated balance sheet of the
Consolidated Parties, together with related consolidated statements of
income, stockholders' equity and cash flow for the fiscal year 2001 and
(ii) unaudited consolidated balance sheets of the Consolidated Parties,
together with related consolidated statements of income, and
consolidated statements of cash flow for the month ended January 31,
2002, fairly present the financial condition and business operations of
the Consolidated Parties as of such respective dates (together, the
"Financial Statements"); such financial statements were prepared in
accordance with U.S. GAAP; and since December 31, 2001, there have
occurred no changes or circumstances which have had or are reasonably
expected to have a Material Adverse Effect.
(b) The financial statements delivered to the Lenders pursuant
to Sections 7.1(a), (b) and (c) have been prepared in accordance with
U.S. GAAP and will present fairly
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the consolidated and/or consolidating (as applicable) financial
condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods.
6.7 NO DEFAULT.
None of the Credit Parties is in default under any term of any
indenture, contract, lease, agreement, instrument or other commitment to which
any of them is a party or by which any of them is bound which default has had or
could be reasonably expected to have a Material Adverse Effect. None of the
Credit Parties knows of any dispute regarding any indenture, contract, lease,
agreement, instrument or other commitment which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
6.8 LIENS.
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. To the best knowledge of the
applicable Credit Party, no lessor, warehouseman, filler, processor or packer of
any such Credit Party has granted any Lien with respect to the Inventory
maintained by such Credit Party at the property of any such lessor,
warehousemen, filler, processor or packer. Upon the proper filing of financing
statements and the proper recordation of other applicable documents with the
appropriate filing or recordation offices in each of the necessary
jurisdictions, the security interests granted pursuant to the Credit Documents
constitute and shall at all times constitute valid and enforceable first, prior
and perfected Liens on the Collateral (other than Permitted Liens). The Credit
Parties are or will be at the time additional Collateral is acquired by them,
the absolute owners of the Collateral with full right to pledge, sell, consign,
transfer and create a Lien therein, free and clear of any and all Liens in favor
of third parties, except Permitted Liens. The Credit Parties will at their
expense warrant, until payment in full of the Obligations and termination of the
Commitments, and, at the Administrative Agent's request, defend the Collateral
from any and all Liens (other than Permitted Liens) of any third party. The
Credit Parties will not grant, create or permit to exist, any Lien upon the
Collateral, or any proceeds thereof, in favor of any third party (other than
Permitted Liens).
6.9 INDEBTEDNESS.
The Consolidated Parties have no Indebtedness (including without
limitation guaranty, reimbursement or other contingent obligations) except (a)
as disclosed in the Financial Statements referenced in Section 6.6, (b) as set
forth in Schedule 6.9, and (c) as otherwise permitted under the terms of this
Agreement.
6.10 LITIGATION.
Except as disclosed in Schedule 6.10, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of the Borrowers threatened, against any Credit Party which, if
adversely determined, would have or reasonably be expected to have a Material
Adverse Effect.
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6.11 MATERIAL CONTRACTS.
No Credit Party is in default under any Material Contract which default
could reasonably be expected to have a Material Adverse Effect.
6.12 TAXES.
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid all
amounts of taxes shown thereon to be due (including interest and penalties) and
has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with U.S. GAAP. None of the Credit Parties is aware of any proposed
material tax assessments against it or any other Credit Party.
6.13 COMPLIANCE WITH LAW.
None of the Credit Parties has violated or failed to comply with any
statute, law, ordinance, regulation, rule or order of any foreign, federal,
state or local government, or any other Governmental Authority or any self
regulatory organization, or any judgment, decree or order of any court,
applicable to its business or operations except where the aggregate of all such
violations or failures to comply would not have or reasonably be expected to
have a Material Adverse Effect. The conduct of the business of each of the
Credit Parties is in conformity with all securities, commodities, energy, public
utility, zoning, building code, health, OSHA and environmental requirements and
all other foreign, federal, state, provincial and local governmental and
regulatory requirements and requirements of any self regulatory organizations,
except where such non-conformities could not reasonably be expected to have a
Material Adverse Effect. None of the Credit Parties has received any notice to
the effect that, or otherwise been advised that, it is not in compliance with,
and none of such Credit Parties has any reason to anticipate that any currently
existing circumstances are likely to result in the violation of any such
statute, law, ordinance, regulation, rule, judgment, decree or order which
failure or violation could reasonably be expected to have a Material Adverse
Effect.
6.14 ERISA.
(a) Except as would not reasonably be expected to have a
Material Adverse Effect, during the five-year period prior to the date
on which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the best of the Borrowers' or any ERISA
Affiliate's knowledge, no event or condition has occurred or exists as
a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, has occurred with
respect to any Single Employer Plan; (iii) each Plan, Single Employer
Plan and, to the best of the Borrowers' or any ERISA Affiliate's
knowledge, each Multiemployer Plan has been
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maintained, operated, and funded in compliance in all material respects
with its own terms and in material compliance with the provisions of
ERISA, the Code, and any other applicable federal or state laws; and
(iv) no Lien in favor of the PBGC or a Single Employer Plan has arisen
or is reasonably likely to arise on account of any Single Employer
Plan.
(b) Except as set forth in the Financial Statements, the
actuarial present value of all "benefit liabilities" on a going concern
basis, whether or not vested, under each Single Employer Plan, as of
the last annual valuation date prior to the date on which this
representation is made or deemed made (determined, in each case,
utilizing the actuarial assumptions used in such Plan's most recent
actuarial valuation report), did not exceed as of such valuation date
the fair market value of the assets of such Plan .
(c) Except as would not reasonably be expected to have a
Material Adverse Effect, neither the Borrowers nor any ERISA Affiliate
has incurred, or, to the best of the Borrowers' or any ERISA
Affiliate's knowledge, is reasonably expected to incur, any withdrawal
liability under ERISA with respect to any Multiemployer Plan or
Multiple Employer Plan. Except as would not reasonably be expected to
have a Material Adverse Effect, neither Borrower nor any ERISA
Affiliate would become subject to any withdrawal liability under ERISA
if such Borrower or any such ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. Neither Borrower nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best of the Borrowers' or any ERISA
Affiliate's knowledge, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject the Borrowers or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
the Borrowers or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability, except for any such
prohibited transaction or breach which would not reasonably be expected
to have a Material Adverse Effect.
(e) Except as set forth in the Financial Statements, the
Borrowers and their ERISA Affiliates have no material liability with
respect to "expected post-retirement benefit obligations" within the
meaning of the Financial Accounting Standards Board Statement 106. Each
Plan which is a welfare plan (as defined in Section 3(1) of ERISA) to
which Sections 601-609 of ERISA and Section 4980B of the Code apply has
been administered in compliance in all material respects with such
sections.
(f) All Canadian benefit plans and Canadian pension plans and
any similar plans of the Canadian Borrowers and their Subsidiaries are
duly registered under all
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applicable federal and provincial pension benefits legislation,
including the provisions of the Income Tax Act (Canada), have been
administered in accordance with such legislation and no event has
occurred which would cause a loss of such registered status. All
material obligations of the Canadian Borrowers and their Subsidiaries
(including fiduciary and funding obligations) under such plans required
to be performed have been performed. There are no outstanding disputes
concerning the assets held in the funding media for such plans. All
contributions or premiums required to be made by the Canadian Borrowers
or their Subsidiaries to such plans have been made in a timely fashion
in accordance with the terms of such plans and applicable laws. Each of
such plans is fully funded and there exists no going concern unfunded
actuarial liabilities or solvency deficiencies in respect of such
plans.
6.15 SUBSIDIARIES.
Set forth in Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each of the Consolidated Parties. Information on the attached
Schedule 6.15 includes a complete and accurate list of the jurisdiction of
incorporation of each of the Consolidated Parties and the percentage ownership
interest of voting stock owned by the direct parent company in each such member
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding capital stock and other equity interests of all Credit
Parties is validly issued, fully paid and non-assessable and is owned by the
Borrowers, directly or indirectly, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents). Other
than as set forth in Schedule 6.15, no Subsidiary has outstanding any securities
convertible into or exchangeable for its Capital Stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its Capital Stock.
6.16 USE OF PROCEEDS; MARGIN STOCK.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of such proceeds will be used for the
purpose of purchasing or carrying any "margin stock" as defined in Regulation U
or Regulation X, or for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry "margin stock" or for any
other purpose which might constitute this transaction a "purpose credit" within
the meaning of Regulation U or Regulation X.
6.17 GOVERNMENT REGULATION.
No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company Act
of 1940 or the Interstate Commerce Act, each as amended. In addition, none of
the Credit Parties is (a) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, and is not
controlled by such a company, or (b) a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary" or a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
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Other than X. Xxxxxx Xxxxxxxxxxx, no director, executive officer or principal
shareholder of any Credit Party is a director, executive officer or principal
shareholder of any Lender. For purposes hereof, the terms "director", "executive
officer" and "principal shareholder" (when used with reference to any Lender)
shall have the meanings ascribed to them in Regulation O issued by the Board of
Governors of the Federal Reserve System.
6.18 HAZARDOUS SUBSTANCES.
Except as disclosed on Schedule 6.18 or except as would not reasonably
be expected to have a Material Adverse Effect, all real property owned or leased
by any Credit Party or on which any Credit Party operates (the "Subject
Property") is free from "hazardous substances" "contaminants" or "pollutants" or
similar substances as defined in the applicable Environmental Laws in
concentrations or amounts that require cleanup under any Environmental Laws; no
portion of the Subject Property is subject to federal, provincial, state or
local, complaint, investigation or, to the Borrowers' knowledge, liability under
applicable Environmental Laws because of the presence of leaked or spilled
petroleum products, waste materials or debris, "PCB's" or PCB items (as defined
in 40 C.F.R. ss.763.3), underground storage tanks, "asbestos" (as defined in 40
C.F.R. ss.763.63) or the past or present accumulation, spillage or leakage of
any such substance subject to regulation under the Environmental Laws; and each
Credit Party is in compliance with all Environmental Laws applicable in
connection with the operation of its businesses, except to the extent that the
failure to be in compliance would not have or reasonably be expected to have a
Material Adverse Effect; and no Borrower knows of any complaint or investigation
under Environmental Laws regarding real property which it or any other Credit
Party owns or leases or on which it or any other Credit Party operates.
6.19 PATENTS, FRANCHISES, ETC.
Each Credit Party possesses or has the right to use all material
patents, trademarks, service marks, trade names, copyrights, licenses and other
rights, free of adverse claims, that are necessary for the operation of its
respective business as presently conducted and as proposed to be conducted. Each
Credit Party has obtained all material licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its respective
property and to the conduct of its business, except to the extent that the
failure to have obtained any such licenses, permits, franchises or other
governmental authorizations would not have or reasonably be expected to have a
Material Adverse Effect.
6.20 SOLVENCY.
Each Credit Party individually, and the Credit Parties as a whole, are
and, after consummation of this Agreement and after giving effect to all
Indebtedness incurred hereunder will be Solvent.
6.21 LOCATION OF ASSETS.
The Credit Parties' chief executive offices are set forth on Schedule
6.21 hereto, and the books and records of the Credit Parties and all chattel
paper and all records of accounts are
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located at the chief executive offices of the Credit Parties or as otherwise
noted on Schedule 6.21. All other locations where the Credit Parties keep, store
or maintain any Collateral are set forth on Schedule 6.21 hereto. There is no
jurisdiction in which any Credit Party has any Collateral (except for Inventory
held for shipment by third Persons, Inventory in transit, Inventory held for
processing by third Persons, or immaterial quantities of Inventory) other than
those jurisdictions listed on Schedule 6.21. Schedule 6.21 is a true, correct
and complete list of (i) the names and addresses of each warehouseman, filler,
processor and packer at which Inventory is stored, (ii) the address of the chief
executive offices of the Credit Parties, (iii) the address of all offices where
records and books of account of the Credit Parties are kept or where Collateral
is kept, stored or maintained and (iv) the state of incorporation or formation
of each of the Credit Parties. None of the receipts received by any of the
Credit Parties from any warehouseman, filler, processor or packer states that
the goods covered thereby are to be delivered to bearer or to the order of a
named person or to a named person and such named person's assigns. Each of the
Credit Parties agrees to provide the Administrative Agent with a revised
Schedule 6.21 setting forth current principal places of business, chief
executive offices, information concerning Inventory locations and jurisdictions
of incorporation or formation on a quarterly basis at the time the financial
statements described in Section 7.1(b) are required to be delivered to the
Administrative Agent and the Lenders.
6.22 D/B/A OR TRADE NAMES.
None of the Credit Parties has used any corporate, d/b/a or trade name
during the five (5) years preceding the date hereof, other than the corporate
name shown on its or such Subsidiary's Articles or Certificate of Incorporation
and as set forth on Schedule 6.22.
6.23 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best knowledge of the
Borrowers after diligent inquiry, threatened between any Credit Parties and any
of their respective employees, other than employee grievances arising in the
ordinary course of business which could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.24 BROKERS' FEES.
Except for fees payable to the Arranger in connection with the closing
and syndication of this Credit Agreement, no Credit Party has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents to occur on the Closing Date.
6.25 LABOR MATTERS.
None of the Credit Parties is engaged in any unfair labor practice.
There is (a) no material unfair labor practice complaint pending against any
Credit Party or, to the best knowledge of the Borrowers, threatened against any
of them, before the National Labor Relations Board, the Canadian Labour
Relations Board or any applicable provincial labour relations board, and no
grievance or arbitration proceeding arising out of or under collective
bargaining
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agreements that has or would reasonably be expected to have a Material Adverse
Effect is so pending against any Credit Party or, to the best knowledge of the
Borrowers, threatened against any of them, (b) no strike, labor dispute,
slowdown or stoppage pending against any Credit Party or, to the best knowledge
of the Borrowers, threatened against any of them, which would have or reasonably
be expected to have a Material Adverse Effect and (c) to the best of the
knowledge of the Borrowers, no union representation questions with respect to
the employees of any of the Credit Parties and no union organizing activities
which would have or reasonably be expected to have a Material Adverse Effect.
6.26 STATUS OF ACCOUNTS.
Each of the Accounts (other than Accounts owing from one Credit Party
to another Credit Party) is based on an actual and bona fide sale and delivery
of goods or rendering of services to customers, made by the Credit Parties in
the ordinary course of business; the goods and inventory being sold and the
Accounts created are exclusive property of the Credit Parties and are not and
shall not be subject to any Lien, consignment arrangement, encumbrance, security
interest or financing statement whatsoever, other than the Permitted Liens; and
each of the Credit Parties' customers have accepted the goods or services, owe
and are obligated to pay in cash the full amounts stated in the invoices
according to their terms, without any dispute, offset, defense or counterclaim
that could reasonably be expected to have, when aggregated with any such other
disputes, offsets, defenses or counterclaims, a Material Adverse Effect. Each of
the Credit Parties confirms to the Lenders that any and all taxes or fees
relating to its business, its sales, the Accounts or the goods relating thereto,
are its sole responsibility and that same will be paid by such Credit Party when
due (unless duly contested and adequately reserved for) and that none of said
taxes or fees is or will become a lien on or claim against the Accounts. Each of
the Credit Parties confirms to the Lenders that since January 1, 2002, (i) it
has not lost any account or customer which could reasonably be expected to have
a Material Adverse Effect and (ii) each written contract or other arrangement to
which any Credit Party is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could materially adversely
effect the business, assets, operations, prospects or condition of such Credit
Party, are in full force and effect.
6.27 TRADE SUPPLIERS.
Attached hereto as Schedule 6.27 is a true, correct and complete list
of all of the suppliers who have sold goods to the Credit Parties during the
fiscal year ended December 31, 2001, for an amount representing ten (10) percent
or more of the accounts of the Credit Parties payable for such year.
6.28 KEY MEMBERS OF MANAGEMENT.
Attached hereto as Schedule 6.28 (as updated from time to time) is a
true, correct and complete list of the executive officers of the Credit Parties
who report to the Chief Executive Officer of the Company as of the date hereof
(collectively, the "Senior Management Members").
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6.29 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties in writing to the Administrative
Agent, the Canadian Agent, or any Lender for purposes of or in connection with
this Credit Agreement or any Credit Documents, or any transaction contemplated
hereby or thereby is or will be true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any material fact necessary to make such information not
misleading at such time. There is no fact now known to any Senior Officer of any
Credit Party which has, or would reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the Financial
Statements, or any certificate, opinion or other written statement made or
furnished by any Credit Party to the Administrative Agent.
ARTICLE VII
AFFIRMATIVE COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement
is in effect and until the Loans, LOC Obligations and BA Obligations, together
with interest, fees and other Obligations hereunder, have been paid in full and
the Commitments and Letters of Credit hereunder shall have terminated that they
will do or cause to be done the following:
7.1 INFORMATION COVENANTS.
The Borrowers will furnish, or cause to be furnished, to the
Administrative Agent and each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within ninety (90) days after the close of each fiscal year
of the Consolidated Parties, a consolidated balance sheet of the
Consolidated Parties as at the end of such fiscal year together with
related consolidated statements of income, shareholder's equity and of
cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all in reasonable
detail and audited by independent certified public accountants of
recognized national standing and whose opinion shall be to the effect
that such consolidated financial statements have been prepared in
accordance with U.S. GAAP and shall not be limited as to the scope of
the audit or qualified as to the status of the Consolidated Parties as
a going concern. It is specifically understood and agreed that failure
of the annual financial statements to be accompanied by an opinion of
such accountants in form and substance as provided herein shall
constitute an Event of Default hereunder. The financial statements
delivered pursuant to this Section 7.1(a) will have been prepared in
accordance with U.S. GAAP and will present fairly the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of the date thereof.
(b) Quarterly Financial Statements. As soon as available and
in any event within forty-five (45) days after the end of each
Production Quarter (other than the fourth
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Production Quarter, in which case ninety (90) days after the end
thereof) of each fiscal year of the Consolidated Parties, a
consolidated balance sheet and statements of income and of cash flows
of the Consolidated Parties as at the end of such quarterly period
together with related consolidated statements of retained earnings,
shareholder's equity and of cash flows for such quarterly period and
for the portion of the fiscal year ending with such period, in each
case setting forth in comparative form figures for the corresponding
period of the preceding fiscal year, all in reasonable form and detail
acceptable to the Administrative Agent, and accompanied by a
certificate of a Senior Financial Officer of the Company as being true
and correct and as having been prepared in accordance with U.S. GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments. The financial statements delivered pursuant to this
Section 7.1(b) will have been prepared in accordance with U.S. GAAP and
will present fairly the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of the date
thereof.
(c) Monthly Financial Statements. As soon as available and in
any event within thirty (30) days after the end of each Production
Month of the Consolidated Parties, (i) unaudited consolidated financial
statements similar to those required by clause (a) above as of the end
of such period and for such period then ended and for the period from
the beginning of the current fiscal year to the end of such period and
(ii) unaudited balance sheets, income statements and statements of cash
flow by unit, in each case prepared in accordance with US GAAP (except
that such monthly statements need not include footnotes) and certified
by a Senior Financial Officer of the Company.
(d) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a), (b) and (c), a
certificate of a Senior Financial Officer of the Company substantially
in the form of Exhibit L to the effect that no Default or Event of
Default exists, or if any Default or Event of Default does exist
specifying the nature and extent thereof and what action the Borrowers
propose to take with respect thereto. In addition, for each fiscal
quarter, such certificate shall (i) demonstrate compliance with the
financial covenants contained in Article VIII by calculation thereof as
of the end of each such fiscal period and (ii) contain information
regarding expenditures made by the Credit Parties as to Permitted
Investments and Capital Expenditures during the prior fiscal quarter.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to a member of the Consolidated Parties in connection with
any annual, interim or special audit of the books of the Consolidated
Parties.
(f) SEC and Other Reports. Promptly upon transmission or
receipt thereof, (i) copies of any filings and registrations with, and
material reports to or from, the Securities and Exchange Commission, or
any successor agency, and copies of all financial statements, proxy
statements, notices and reports as the Consolidated Parties shall send
to its shareholders or to the holders of any other Indebtedness in
their capacity as such holders and (ii) upon the request of the
Administrative Agent, all material reports and written information to
and from the United States Environmental Protection Agency, or any
Canadian, state, provincial or local agency responsible for
environmental matters, the
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Xxxxxx Xxxxxx Occupational Safety and Health Administration, or any
Canadian, state, provincial or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters relating to a member of the
Consolidated Parties.
(g) Notices. Each Borrower will give written notice to the
Administrative Agent (i) immediately of the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Borrowers propose to
take with respect thereto, and (ii) promptly, but in any event within
five (5) Business Days, following the occurrence of any of the
following with respect to a Credit Party (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Credit Party which, if adversely determined, would have or
reasonably be expected to have, a Material Adverse Effect, (B) any levy
of an attachment, execution or other process against the assets of a
Credit Party having a value of $1,000,000 or more, (C) the occurrence
of an event or condition which shall constitute a default or event of
default under any Indebtedness of a member of the Consolidated Parties
in excess of $1,000,000, (D) any development in the business or affairs
of any of the Consolidated Parties which has resulted in, or which the
Company reasonably believes may result in, a Material Adverse Effect,
(E) the institution of any proceedings against a Credit Party with
respect to, or the receipt of notice by such Person of potential
liability or responsibility for violation, or alleged violation of any
federal, foreign, state, provincial or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of
which would have or be reasonably expected to have a Material Adverse
Effect or (F) promptly, of any change in the name of any Credit Party.
(h) Annual Budget and Projections. Within thirty (30) days
following the end of each fiscal year, beginning with the fiscal year
ending December 31, 2002, an annual budget of the Consolidated Parties
containing, among other things, pro forma financial statements and
projected loan usage and excess availability on a monthly basis under
the Credit Agreement for the next fiscal year financial and operational
projections for such fiscal year.
(i) Borrowing Base Certificate, etc.. Not later than 12:00
Noon on the 25th day of each Production Month (or if such day is not a
Business Day, then on the next succeeding Business Day) and within
three (3) Business Days following the date of any Asset Disposition or
Casualty Loss in excess of $1,000,000, the Borrowers shall deliver a
borrowing base certificate (the "Borrowing Base Certificate") in
substantially the form of Exhibit J hereto, duly completed and
certified by a Senior Financial Officer of the Company detailing the
Eligible Accounts Receivable and Eligible Inventory of the Credit
Parties as of the last day of the immediately preceding Production
Month. In addition, on the 25th day of each Production Month (or if
such day is not a Business Day, then on the next succeeding Business
Day), the Company shall furnish a written report to the Lenders setting
forth (i) the accounts receivable aged trial balance at the immediately
preceding Production Month end for each account debtor, (ii) the
accounts payable aging summary for the immediately preceding Production
Month, (iii) an inventory summary as of the immediately preceding
Production Month by inventory location and reflecting inventory
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composition (i.e, consigned versus owned, raw versus work-in-process,
finished goods versus MRO, etc.) and (iv) a sales and cash receipt
summary for such immediately preceding Production Month. Such aging
reports shall indicate which Accounts are current, up to 30, 30 to 60
and over sixty (60) days past due and shall list the names of all
applicable account debtors. The Administrative Agent may, but shall not
be required to, rely on each Borrowing Base Certificate delivered
hereunder as accurately setting forth the available U.S. Borrowing Base
and Canadian Borrowing Base for all purposes of this Credit Agreement
until such time as a new Borrowing Base Certificate is delivered to the
Administrative Agent in accordance herewith; Borrowing Base
Certificates may be prepared and submitted to the Lenders, and the
Administrative Agent may request delivery of Borrowing Base
Certificates, on a more frequent basis than each Production Month,
provided that such certificate shall comply with the requirements set
forth elsewhere herein.
(j) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Consolidated Parties as the
Administrative Agent or the Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each Consolidated Party will do all things necessary to preserve and
keep (and will cause each of its Subsidiaries to keep) in full force and effect
its existence, franchises and authority, except for corporate reorganizations,
corporate dissolution and other similar transactions which would not have or
reasonably be expected to have a Material Adverse Effect.
7.3 BOOKS AND RECORDS.
The Consolidated Parties will keep complete and accurate books and
records of its transactions in accordance with good accounting practices on the
basis of U.S. GAAP. In addition, each Credit Party will maintain books and
records pertaining to the Collateral in such detail, form and scope as is
consistent with good business practice.
7.4 COMPLIANCE WITH LAW.
Each of the Consolidated Parties will comply with all material laws,
rules, regulations and orders of, and all applicable restrictions imposed by all
applicable Governmental Authorities applicable to it, including applicable
Environmental Laws if noncompliance would have or be reasonably likely to have a
Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each of the Consolidated Parties will pay and discharge (a) all
material taxes, assessments and governmental charges or levies imposed upon it
or them, or upon its or their capital, income or profits, or upon any of its or
their properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, would
give rise to a Lien or charge upon any of its or their properties, and (c)
except as prohibited hereunder, all of its
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other Indebtedness as it shall become due; provided, however, that there is no
requirement to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with U.S.
GAAP, unless the failure to make any such payment (i) shall give rise to an
immediate right to foreclosure on a Lien securing such amounts or (ii) otherwise
would have or reasonably be expected to have a Material Adverse Effect.
7.6 INSURANCE; CASUALTY LOSS.
(a) Each of the Credit Parties will maintain comprehensive general
liability insurance covering third party property damage and insurance covering
the Collateral up to the replacement value thereof, with such insurance
companies, in such amounts and covering such risks as are at all times
satisfactory to the Administrative Agent in its commercially reasonable
judgment. The present coverage of the Credit Parties is outlined as to carrier,
policy number, expiration date, type and amount on Schedule 7.6 hereto. All
policies covering the Collateral are to name the applicable Credit Parties and
the Administrative Agent as loss payees in case of loss, as their interests may
appear, and are to contain such other provisions as the Administrative Agent may
reasonably require to fully protect such Agent's interest in the Collateral and
to any payments to be made under such policies. All comprehensive general
liability policies of the Credit Parties are to name the Administrative Agent
and each Lender as an additional insured. True copies of all original insurance
policies or certificates of insurance evidencing such insurance covering the
Collateral are to be delivered to the Administrative Agent on or prior to the
Closing Date, premium prepaid, with the loss payable endorsement in the
Administrative Agent's favor, and shall provide for not less than thirty (30)
days prior written notice to the Administrative Agent, of the exercise of any
right of cancellation. In the event any Credit Party fails to respond in a
timely and appropriate manner (as determined by the Administrative Agent in its
reasonable discretion) with respect to collecting under any insurance policies
required to be maintained under this Section 7.6, the Administrative Agent shall
have the right, in the name of itself or any Credit Party, to file claims under
such insurance policies, to receive and give acquittance for any payments that
may be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be necessary to
effect the collection, compromise or settlement of any claims under any such
insurance policies.
(b) Each of the Credit Parties will provide written notice to the
Lenders of the occurrence of any of the following events within five (5)
Business Days after the occurrence of such event: any of the Collateral is (i)
damaged or destroyed, or suffers any other loss or (ii) is condemned,
confiscated or otherwise taken, in whole or in part, or the use thereof is
otherwise diminished so as to render impracticable or unreasonable the use of
such Collateral for the purpose to which such Collateral was used immediately
prior to such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount of
the damage, destruction, loss or diminution in value of such Collateral is in
excess of $500,000 (collectively, a "Casualty Loss"). Each Credit Party will
diligently file and prosecute its claim or claims for any award or payment in
connection with a Casualty Loss. In connection with any Casualty Loss, the
Credit Parties will pay to the Administrative Agent, promptly upon receipt
thereof, any and all insurance proceeds and payments received by any of the
Credit Parties on account of damage, destruction or loss of all or any portion
of the Collateral
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and the Administrative Agent shall, at its election and in its sole discretion,
either (A) apply the proceeds realized from such loss to payment of accrued and
unpaid interest or outstanding principal of the Revolving Loans in accordance
with Section 4.4 hereof or (B) pay such proceeds to the Credit Parties to be
used to repair, replace or rebuild the Collateral or portion thereof that was
the subject of the loss. No settlement on account of any Casualty Loss shall be
made without the consent of the Lenders and (2) the Administrative Agent may
participate in any such proceedings and the Credit Parties will deliver to the
Administrative Agent such documents as may be requested by the Administrative
Agent in connection therewith and will consult with the Administrative Agent,
its attorneys and agents in the making and prosecution of such claim or claims.
Each of the Credit Parties hereby irrevocably authorizes and appoints the
Administrative Agent its attorney-in-fact, after the occurrence and continuance
of an Event of Default, to collect and receive for any such award or payment and
to file and prosecute such claim or claims, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest, and each of the
Credit Parties shall, upon demand of the Administrative Agent, make, execute and
deliver any and all assignments and other instruments sufficient for the purpose
of assigning any such award or payment to the Administrative Agent for the
benefit of the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever.
7.7 MAINTENANCE OF PROPERTY.
Each of the Consolidated Parties will maintain and preserve its
properties and equipment used or necessary in its business (in whomever's
possession as they may be) in good repair, working order and condition, normal
wear and tear excepted (and having regard to their respective ages), and will
make, or cause to be made, in such properties and equipment from time to time
all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
Each of the Consolidated Parties will perform in all material respects
all of its obligations under the terms of all material agreements, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound.
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7.9 ERISA.
Upon the Company or any ERISA Affiliate obtaining knowledge thereof,
the Company will give written notice to the Administrative Agent promptly (and
in any event within five (5) Business Days) of: (a) any event or condition,
including, but not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, a ERISA Event; (b) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Company or any ERISA Affiliate, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA); (c) the failure to make full
payment on or before the due date (including extensions) thereof of all amounts
which the Company or any ERISA Affiliate is required to contribute to each
Single Employer Plan or Multiemployer Plan pursuant to its terms and as required
to meet the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (d) any change in the funding status of any Single Employer
Plan that could have or be reasonably expected to have a Material Adverse
Effect; together, with a description of any such event or condition or a copy of
any such notice and a statement by a Senior Financial Officer of the Company
briefly setting forth the details regarding such event, condition, or notice,
and the action, if any, which has been or is being taken or is proposed to be
taken by the Company or any ERISA Affiliate with respect thereto. Promptly upon
request, the Company shall furnish the Administrative Agent and the Lenders with
such additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to filed with
the DOL and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERISA).
All Canadian benefit plans and Canadian pension plans and any similar plans
applicable to the Canadian Borrowers and their Subsidiaries will, if required by
applicable law, be duly registered under the provisions of the Income Tax Act
(Canada) and all applicable provincial benefits legislation, will be
administered in accordance with such statute and no event will be allowed to
occur which would cause a loss of such registered status. All material
obligations of the Canadian Borrowers and their Subsidiaries (including
fiduciary and funding obligations) required to be performed in connection with
such plans and the funding media therefor will be performed, except where the
failure to perform such obligations would not have or reasonably be expected to
have a Material Adverse Effect. There will be no outstanding disputes concerning
the assets held in the funding media for such plans. All contributions or
premiums required to be made by the Canadian Borrowers or their Subsidiaries to
such plans will be made in a timely fashion in accordance with the terms of such
plans and applicable laws. Each of such plans will be fully funded and no going
concern unfunded actuarial liabilities or solvency deficiencies in respect of
such plans will be allowed to exist.
7.10 USE OF PROCEEDS.
The proceeds of the Loans hereunder will be used solely (a) for
repayment of certain amounts of existing Funded Debt of the Consolidated
Parties, (b) for general corporate, working capital purposes and capital
expenditures of the Credit Parties in the ordinary course of business and (c) as
otherwise permitted under this Agreement.
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7.11 ADDITIONAL SUBSIDIARIES.
Promptly, or in any event within thirty (30) days, upon any Person
becoming a direct or indirect Subsidiary of a Borrower, the Borrowers shall so
notify the Administrative Agent and the Canadian Agent and shall, (a) in the
case of a Person organized and resident in the United States cause (i) such
Person to become a U.S. Borrower hereunder pursuant to a Joinder Agreement, (ii)
such Person to execute a Guaranty Agreement in substantially the same form as
the Guaranty Agreements executed by the other Guarantors organized and resident
in the United States , (iii) the U.S. Collateral of such Person to be pledged to
the Lenders pursuant to a Security Document similar to those executed by the
U.S. Borrowers, (iv) such Person to execute Revolving Notes in favor of the U.S.
Lenders and (v) such Person to deliver such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 Financing Statements,
Acknowledgment Agreements, certified resolutions and other organizational and
authorizing documents of such Person and favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above), all in form,
content and scope reasonably satisfactory to the Administrative Agent and (b) in
the case of a Person organized and domiciled in Canada cause (i) such Person to
become a Canadian Borrower hereunder pursuant to a Joinder Agreement, (ii) the
Canadian Collateral of such Person to be pledged to the Lenders pursuant to a
Security Document similar to those executed by the Canadian Borrowers, (iii)
such Person to execute Revolving Notes in favor of the Canadian Lenders and (iv)
such Person to deliver such other documentation as the Administrative Agent or
the Canadian Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate PPSA Financing Statements (or
equivalent filings), Acknowledgment Agreements, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably satisfactory to the
Administrative Agent.
7.12 AUDITS/INSPECTIONS.
Each of the Credit Parties agrees that the Administrative Agent or its
agents may enter upon the premises of any of the Credit Parties at any time and
from time to time, during normal business hours, upon reasonable notice and, on
and after the occurrence and during the continuation of an Event of Default
which continues and is continuing beyond the expiration of any grace or cure
period applicable thereto and which has not otherwise been waived by the
Administrative Agent, at any time at all, for the purpose of (a) enabling the
Administrative Agent's internal auditors or other designees to conduct field
examinations at such of the Credit Party's expense, (b) inspecting the
Collateral, (c) inspecting and/or copying (at the Credit Parties' expense) any
and all records pertaining thereto, (d) discussing the affairs, finances and
business of any Credit Party or with any officers, employees and directors of
any Credit Party with its certified independent accountant and (e) verifying
Eligible Accounts Receivable and/or Eligible Inventory. The Lenders, in the
reasonable discretion of the Administrative Agent, may accompany the
Administrative Agent at their sole expense in connection with the foregoing
inspections.
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7.13 INVENTORY.
Within thirty (30) days after the end of each month, upon the request
of the Administrative Agent from time to time, the Credit Parties will provide
to the Administrative Agent written statements listing categories of Inventory
in reasonable detail as requested by the Administrative Agent. The Credit
Parties will conduct annually a physical count of their Inventory and will
provide the Administrative Agent with prior written notice indicating when the
physical count is to be performed, and a copy of such count will be promptly
supplied to the Administrative Agent accompanied by a report of the value
(valued at FIFO) of such Inventory; provided that the Credit Parties will
conduct such a physical count at such other times and as of such dates as the
Administrative Agent shall reasonably request.
7.14 COLLATERAL RECORDS.
Each Credit Party agrees to maintain such books and records regarding
Accounts and the other Collateral as the Administrative Agent may reasonably
require, and agrees that such books and records will reflect the Lenders'
interest in the Accounts and such other Collateral. Each of the Credit Parties
agrees to afford the Administrative Agent thirty (30) days prior written notice
of any change in the location at which any Collateral is stored or maintained
(other than Inventory held for shipment by third Persons, Inventory in transit,
Inventory held for processing by third Persons or immaterial quantities of
assets, equipment or Inventory) or in the location of its chief executive office
or place of business from the locations specified in Schedule 6.21, and to
execute in advance of such change, cause to be filed and/or delivered to the
Administrative Agent any financing statements or other documents required by the
Administrative Agent, all in form and substance satisfactory to the
Administrative Agent. Each of the Credit Parties agrees to advise the
Administrative Agent promptly, in sufficient detail, of any material change
relating to the type, quantity or quality of the Collateral or any event which
could reasonably be expected to have a Material Adverse Effect. Each of the
Credit Parties agrees to furnish any Lender with such other information
regarding its business affairs and financial condition as such Lender may
reasonably request from time to time.
7.15 SECURITY INTERESTS.
Each Credit Party will defend all or any portion of the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein, except where the amount of such Collateral is immaterial
and the failure to so defend such Collateral would not reasonably be expected to
have a Material Adverse Effect. Each Credit Party agrees to comply with the
requirements of all state, provincial and federal laws in order to grant to the
Lenders a valid and perfected first security interest in the Collateral. The
Administrative Agent is hereby authorized by each Credit Party to file any
financing statements covering the Collateral. Each Credit Party agrees to do
whatever the Administrative Agent may reasonably request, from time to time, by
way of: filing notices of liens, financing statements, fixture filings and
amendments, renewals and continuations thereof; cooperating with the
Administrative Agent's custodians; keeping stock records; obtaining waivers from
landlords and mortgagees and from warehousemen, fillers, processors and packers
and their respective landlords and mortgagees; paying claims, which might if
unpaid, become a Lien (other than a Permitted Lien) on the
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Collateral; and performing such further acts as the Administrative Agent may
require in order to effect the purposes of this Credit Agreement and the other
Credit Documents. Any and all fees, costs and expenses of whatever kind and
nature (including any Taxes, reasonable attorneys' fees or costs for insurance
of any kind), which the Administrative Agent may reasonably incur with respect
to the Collateral or the Obligations: in filing public notices; in preparing or
filing documents; making title examinations or rendering opinions; in
protecting, maintaining, or preserving the Collateral or its interest therein;
in enforcing or foreclosing the Liens hereunder, whether through judicial
procedures or otherwise; or in defending or prosecuting any actions or
proceedings arising out of or relating to its transactions with any of the
Credit Parties under this Credit Agreement or any other Credit Document, will be
borne and paid by the Credit Parties. If same are not promptly paid by the
Credit Parties, the Administrative Agent may pay same on the Credit Parties'
behalf, and the amount thereof shall be an Obligation secured hereby and due to
the Administrative Agent on demand.
7.16 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in
the Accounts of each of the Credit Parties granted pursuant to the Security
Agreements, at the request of the Administrative Agent, upon the creation of
Accounts, each of the Credit Parties will execute and deliver to the
Administrative Agent in such form and manner as the Administrative Agent may
reasonably require, solely for its convenience in maintaining records of
collateral, such confirmatory schedules of Accounts, and other appropriate
reports designating, identifying and describing the Accounts as the
Administrative Agent may require. In addition, upon the Administrative Agent's
request, upon the occurrence and during the continuation of an Event of Default,
each Credit Party will provide the Administrative Agent with copies of
agreements with, or purchase orders from, the customers of each of the Credit
Parties, and copies of invoices to customers, proof of shipment or delivery and
such other documentation and information relating to said Accounts and other
collateral as the Administrative Agent may reasonably require. Failure to
provide the Administrative Agent with any of the foregoing shall in no way
affect, diminish, modify or otherwise limit the security interests granted
herein. Each Credit Party hereby authorizes the Administrative Agent to regard
such Credit Party's printed name or rubber stamp signature on assignment
schedules or invoices as the equivalent of a manual signature by such Credit
Party's authorized officers or agents.
7.17 COLLECTION OF ACCOUNTS.
Unless an Event of Default has occurred and is continuing beyond the
expiration of the applicable grace or cure period, or has not otherwise been
waived by the Administrative Agent, each Credit Party may and will in accordance
with prudent business practices enforce, collect and receive all amounts owing
on the Accounts (subject to any amounts that such Credit Party is required to
rebate to the applicable account debtor pursuant to any agreement between such
Credit Party and such account debtor), for the Lenders' benefit and on the
Lenders' behalf but at the Credit Parties' expense in accordance with the
provisions of Section 3.1 or 3.2, as applicable; the Administrative Agent may,
and upon the request of the Required Lenders shall, shall terminate such
privilege, without notice to the Credit Parties which is hereby expressly waived
by the Credit Parties, upon the occurrence of any Event of Default which occurs
and continues
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beyond the expiration of any applicable grace or cure period, or which has not
otherwise been waived by the Required Lenders. Any checks, cash, notes or other
instruments or property received by any Credit Party with respect to any
Accounts shall be held by such Credit Party in trust for the benefit of the
Lenders, separate from such Credit Party's own property and funds, and
immediately turned over to the Administrative Agent or the Canadian Agent, as
applicable, with proper assignments or endorsements. No checks, drafts or other
instruments received by an Agent shall constitute final payment unless and until
such instruments have actually been collected.
7.18 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Credit Party will notify the Administrative Agent promptly of any
matters materially affecting the value, enforceability or collectibility of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods, provided, however, that such notice shall only be required
as to any such matter that affects Accounts outstanding at any one time from any
account debtor, which affected Accounts have a value greater than $500,000, or
to the extent that the outcome of such matter could reasonably be expected to
have a Material Adverse Effect. Each Credit Party will issue credit memoranda
promptly (with duplicates to the Administrative Agent upon its request for same)
upon accepting returns or granting allowances, and may continue to do so until
the occurrence of an Event of Default which continues beyond the expiration of
the applicable grace or cure period, or which has not otherwise been waived by
the Required Lenders or upon the request of the Administrative Agent or upon the
request of the Required Lenders. After the occurrence and during the continuance
of an Event of Default, each Credit Party agrees that all returned, reclaimed or
repossessed merchandise or goods shall be set aside by such Credit Party, marked
with the Lenders' name and held by such Credit Party for the Lenders' account as
owner and assignee.
7.19 ACKNOWLEDGMENT AGREEMENTS.
Each Credit Party will use commercially reasonable efforts (which shall
not require any Credit Party to expend any material sums) to assist the
Administrative Agent in obtaining executed Acknowledgment Agreements from each
of the warehousemen, processors, packers, fillers, landlords and mortgagees with
whom such Credit Party conducts business from time to time or who have an
interest in any real property on which any of the Collateral is located.
7.20 TRADEMARKS.
Each Consolidated Parties will do and cause to be done all things
necessary to preserve and keep in full force and effect all registrations of
trademarks, service marks and other marks, trade names or other trade rights
owned or licensed by such Consolidated Parties, except where the failure to do
so would not reasonably be expected to have a Material Adverse Effect.
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7.21 PRIORITY OF LIENS.
Within fifteen (15) days following the first Business Day on which the
public service workers in the province of Ontario have returned to work and have
begun accepting filings of financing statements under the PPSA, the
Administrative Agent shall have received satisfactory evidence that (i) subject
to Permitted Liens, the Administrative Agent, on behalf of the applicable
Lenders, holds a perfected, first priority Lien on all applicable Collateral
(subject to clause (i) above) and (ii) none of the Collateral is subject to any
other Liens other than Permitted Liens.
ARTICLE VIII
FINANCIAL COVENANTS
Each Borrower hereby covenants and agrees that so long as this Agreement
is in effect and until the Loans, LOC Obligations and BA Obligations, together
with interest, fees and other Obligations hereunder, have been paid in full and
the Commitments and Letters of Credit hereunder shall have terminated that they
will do or cause to be done the following:
8.1 FIXED CHARGE COVERAGE RATIO.
The Consolidated Parties shall maintain a Fixed Charge Coverage Ratio
of not less than (a) 1.0 to 1.0 as of the last day of each fiscal quarter
occurring on or prior to December 31, 2002 and (b) 1.1 to 1.0 as of the last day
of each fiscal quarter occurring thereafter; provided, however, to the extent
that Excess Availability as of each of the last 30 days of such fiscal quarter
is greater than $20,000,000, the Fixed Charge Coverage Ratio for such fiscal
quarter shall not be tested.
8.2 CAPITAL EXPENDITURES.
The Consolidated Parties shall not make Consolidated Capital
Expenditures in excess of (a) $18,000,000 during the fiscal year ending December
31, 2002, (b) $21,000,000 during the fiscal year ending December 31, 2003 and
(c) $23,000,000 during the fiscal year ending December 31, 2004 (in each case
computed on a non-cumulative basis).
8.3 MINIMUM CONSOLIDATED EBITDA.
Consolidated EBITDA for the Consolidated Parties shall at all times be
greater than or equal to the following amounts for the indicated fiscal quarter,
calculated on a rolling four quarter basis (except for the fiscal quarter ending
March 31, 2002, Consolidated EBITDA shall be calculated only for such quarter,
for the fiscal quarter ending June 30, 2002, Consolidated EBITDA shall be
calculated for the two fiscal quarters then ending and for the fiscal quarter
ending September 30, 2002, Consolidated EBITDA shall be calculated for the three
fiscal quarters then ending):
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Minimum Consolidated
Fiscal Quarter Ending EBITDA
--------------------- --------------------
March 31, 2002 $ 7,800,000
June 30, 2002 $21,500,000
September 30, 2002 $34,500,000
December 31, 2002 $45,000,000
Each fiscal quarter ending in fiscal year 2003 $50,000,000
Each fiscal quarter ending in fiscal year 2004 $55,000,000
8.4 MINIMUM EXCESS AVAILABILITY.
Excess Availability shall be at least $2,000,000 at all times.
ARTICLE IX
NEGATIVE COVENANTS
Each Borrower hereby covenants and agrees that so long as this
Agreement is in effect and until the Loans, LOC Obligations and BA Obligations,
together with interest, fees and other Obligations hereunder, have been paid in
full and the Commitments, Letters of Credit and Bankers' Acceptances hereunder
shall have terminated that it will do or cause to be done the following:
9.1 INDEBTEDNESS.
The Consolidated Parties will not contract, create, incur, assume or
permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Agreement and the other
Credit Documents or any Hedging Agreement;
(b) Indebtedness existing as of the Closing Date as referenced
in Section 6.9 (and renewals, refinancings or extensions thereof, in
whole or in part, on terms and conditions substantially the same as
such existing Indebtedness and in a principal amount not in excess of
that outstanding as of the date of such renewal, refinancing or
extension);
(c) Indebtedness in respect of current accounts payable and
accrued expenses incurred in the ordinary course of business including,
to the extent not current, accounts payable and accrued expenses that
are subject to bona fide dispute;
(d) purchase money Indebtedness (including capital leases and
synthetic leases) incurred by the Consolidated Parties to finance the
purchase of fixed assets; provided that (i) the total of all such
Indebtedness for all of the Consolidated Parties taken together shall
not exceed an aggregate principal amount of $2,500,000 at any one time
outstanding (including any such Indebtedness referred to in subsection
(b) above); (ii) such Indebtedness
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when incurred shall not exceed the purchase price of the asset(s)
financed; and (iii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon
at the time of such refinancing;
(e) unsecured Indebtedness owing from one Credit Party to
another Credit Party;
(f) the guaranty by one Credit Party of another Credit Party's
Indebtedness, to the extent such Indebtedness is permitted hereunder;
(g) Indebtedness of the Company arising under the 2008 Senior
Note Indenture and the 2008 Senior Notes in an aggregate principal
amount of up to $150,000,000;
(h) Indebtedness of the Company arising under the 2009 Senior
Note Indenture and the 2009 Senior Notes in an aggregate principal
amount of up to $120,000,000 (and renewals, exchanges, refinancings or
extensions thereof, in whole or in part, on terms and conditions
substantially the same as such existing Indebtedness and in a principal
amount not in excess of that outstanding as of the date of such
renewal, exchange, refinancing or extension);
(i) Indebtedness in respect of Existing Letters of Credit;
(j) Indebtedness of non-Credit Party, Consolidated Parties to
Credit Parties, permitted pursuant to clause (k) of the definition of
Permitted Investments; and
(k) other Indebtedness, so long as (i) such Indebtedness is
unsecured; (ii) no Default or Event of Default shall exist immediately
prior to or after the incurrence of such Indebtedness; (iii) the
Borrowers shall be in pro forma compliance with all financial covenants
contained in Article VIII hereof; (iv) the documentation evidencing
such Indebtedness shall not contain covenants which are more
restrictive than the covenants contained herein and (v) such
Indebtedness shall not exceed an aggregate principal amount of
$5,000,000 at any one time outstanding.
9.2 LIENS.
No Consolidated Party shall contract, create, incur, assume or permit
to exist any Lien except for Permitted Liens.
9.3 NATURE OF BUSINESS.
No Consolidated Party shall substantively alter the character of its
business from that conducted as of the Closing Date.
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9.4 CONSOLIDATION OR MERGER.
No Consolidated Party shall enter into any transaction of merger or
amalgamation or consolidation or dissolve, liquidate, or wind up its affairs
other than the merger or amalgamation or consolidation of a Subsidiary of a
Borrower into such Borrower or into another Subsidiary of such Borrower;
provided that if any such merger or amalgamation involves a Borrower such
Borrower shall be the surviving entity.
9.5 SALE OR LEASE OF ASSETS.
No Consolidated Party will convey, sell, lease, assign, transfer or
otherwise dispose of any assets (including the Capital Stock of any Subsidiary
of the Company) other than (a) sales of Inventory in the ordinary course of
business, (b) sales or other dispositions in the ordinary course of business of
assets or properties that are obsolete or that are no longer used or useful in
the conduct of such Borrower's or Subsidiary's business (not to exceed in the
aggregate in any fiscal year assets with a net book value of $3,000,000), (c) a
sale, disposition or transfer of assets of WRI to any Credit Party, (d) sales in
the ordinary course of business of assets or properties (other than Inventory)
used in such Borrower's or Subsidiary's business that are worn out or in need of
replacement and that are replaced with assets of reasonably equivalent value or
utility, (e) sales, leases, assignments, transfers and other dispositions among
the Credit Parties, (f) sales of assets or properties set forth on Schedule 9.5;
provided, that the net cash proceeds of such sales are applied in accordance
with Section 4.4(b)(ii) and (g) sales, leases, assignments, transfers and other
dispositions approved by the Required Lenders.
9.6 ACQUISITIONS.
The Consolidated Parties will not make any Acquisitions.
9.7 TRANSACTIONS WITH AFFILIATES.
The Consolidated Party will not enter into any transaction or series of
transactions (other than transactions between the Credit Parties), whether or
not in the ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate except (i) upon terms and conditions that would be
obtainable in a comparable arm's-length transaction with a Person other than an
Affiliate, (ii) employment arrangements, payment of directors' fees, and
transactions pursuant to employees' and directors' stock option plans, each in
the ordinary course of business and (iii) transactions permitted pursuant to
Sections 9.4, 9.5, or 9.11.
9.8 OWNERSHIP OF SUBSIDIARIES.
The Credit Parties will not sell, transfer or otherwise dispose of, any
shares of capital stock of any of their Subsidiaries who are Credit Parties, or
permit any of their Subsidiaries who are Credit Parties to issue, sell or
otherwise dispose of, any shares of capital stock of any of their Subsidiaries,
except to other Credit Parties.
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9.9 FISCAL YEAR.
The Consolidated Parties will not change any of their respective fiscal
years without the prior written consent of the Required Lenders.
9.10 INVESTMENTS.
The Consolidated Parties will not make any Investments except for
Permitted Investments.
9.11 RESTRICTED PAYMENTS.
The Consolidated Parties will not make a Restricted Payment, other than
(a) dividends, distributions or other payments from any Subsidiary to any
Borrower or from any Consolidated Party to a Credit Party, (b) dividends payable
solely in the same class of Capital Stock of the Company, (c) Investments
permitted by clause (l) of the definition of Permitted Investments and (d)
dividends, distributions or other payments applied to the payment of the 2008
Senior Notes and to the payment of the 2009 Senior Notes to the extent any such
payments are permitted to be made pursuant to Section 9.15 hereof; provided,
however, that in each case described under clause (d) hereof, immediately before
and after giving effect to such dividend, distribution or other payment, no
Event of Default shall exist and the Company shall be in compliance with the
terms and provisions of the 2008 Senior Note Indenture and the terms and
provisions of the 2009 Senior Note Indenture.
9.12 NO ADDITIONAL BANK ACCOUNTS.
The Credit Parties will not open, maintain or otherwise have any
checking, savings or other accounts at any bank or other financial institution,
or any other account where money is or may be deposited or maintained with any
Person, other than the accounts set forth on Schedule 9.12 hereto and, after the
Closing Date, such other accounts so long as each such account is subject to a
tri-party lockbox or other blocked account agreement satisfactory to the
Administrative Agent. To the extent required by Section 3.1 or 3.2, as the case
may be, all such checking, savings or other accounts of the Credit Parties shall
be under the sole dominion and control of the Administrative Agent in accordance
with Section 3.1 or 3.2.
9.13 AMENDMENTS OF ORGANIZATIONAL DOCUMENTS.
The Consolidated Parties will not, without the prior written consent of
the Administrative Agent, amend, modify, cancel or terminate or permit the
amendment, modification, cancellation of the Articles or Certificate of
Incorporation or other equivalent organizational document of any of the
Consolidated Parties, except to the extent (i) permitted under Section 7.2 and
Section 9.4 and (ii) such amendment or modification would not materially
adversely effect the Lenders.
9.14 ADDITIONAL NEGATIVE PLEDGES.
The Consolidated Parties will not create or otherwise cause or suffer
to exist or become effective, directly or indirectly, (i) any prohibition or
restriction (including any agreement to
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provide equal and ratable security to any other Person in the event a Lien is
granted to or for the benefit of the Administrative Agent and the Lenders) on
the creation or existence of any Lien upon the assets of any Consolidated Party,
other than (x) Permitted Liens and (y) the 2008 Senior Note Indenture and the
2009 Senior Note Indenture or (ii) any contractual obligation which may restrict
or inhibit the Administrative Agent's rights or ability to sell or otherwise
dispose of the Collateral or any part thereof after the occurrence of an Event
of Default.
9.15 OTHER INDEBTEDNESS.
The Consolidated Parties will not effect or permit any change in or
amendment to any document or instrument pertaining to the terms of payment or
required prepayments of the 2008 Senior Notes or the 2009 Senior Notes, effect
or permit any change in or amendment to any document or instrument pertaining to
the covenants or events of default of the 2008 Senior Notes or the 2009 Senior
Notes if the effect of any such change or amendment is to make such covenants or
events of default more restrictive, give any notice of optional redemption or
optional prepayment or offer to repurchase under any such document or
instrument, or, directly or indirectly, make any payment of principal of or
interest on or in redemption, retirement or repurchase of the 2008 Senior Notes
or the 2009 Senior Notes, except for (a) scheduled payments required by the
terms of the documents and instruments evidencing 2008 Senior Notes and the 2009
Senior Notes, as the case may be and (b) the proceeds of sales of assets or
properties permitted by Section 9.5(f) may, at the option of the Credit Parties,
be applied to prepay, redeem or repurchase the 2009 Senior Notes in accordance
with Section 4.06 of the 2009 Senior Note Indenture to the extent the Credit
Parties have Excess Availability of greater than $10,000,000 after giving effect
to such payment.
9.16 LICENSES, ETC.
The Consolidated Parties will not enter into licenses of, or otherwise
restrict the use of, any patents, trademarks or copyrights which would prevent
any Consolidated Party from selling, transferring, encumbering or otherwise
disposing of any such patent, trademark or copyright.
9.17 LIMITATIONS.
The Consolidated Parties will not, directly or indirectly, create or
otherwise cause, incur, assume, suffer or permit to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Consolidated Party to (a) pay dividends or make any other distribution on any of
its Capital Stock, (b) pay any Indebtedness owed to a Credit Party, (c) make
loans or advances to a Credit Party or (d) transfer any of its property to a
Credit Party, except for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment provisions in any lease governing a
leasehold interest, (ii) any agreement or other instrument of a Person existing
at the time it becomes a Subsidiary of a Borrower; provided that such
encumbrance or restriction is not applicable to any other Person, or any
property of any other Person, other than such Person becoming a Subsidiary of a
Borrower and was not entered into in contemplation of such Person becoming a
Subsidiary of a Borrower, (iii) this Credit Agreement and the other Credit
Documents and (iv) the 2008 Senior Note Indenture and the 2009 Senior Note
Indenture.
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ARTICLE X
POWERS
10.1 APPOINTMENT OF ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT.
(a) Power of Administrative Agent. Each Borrower hereby
irrevocably authorizes and appoints the Administrative Agent, or any Person or
agent the Administrative Agent may designate, as such Borrower's
attorney-in-fact, at the Borrowers' cost and expense, to exercise, subject to
the limitations set forth in Section 10.2, all of the following powers, which
being coupled with an interest, shall be irrevocable until all of the
Obligations to the Lenders have been paid and satisfied in full (other than
contingent indemnification obligations) and all of the Commitments have been
terminated:
(i) To receive, take, endorse, sign, assign and deliver,
all in the name of the Administrative Agent, the Lenders or such
Borrower, as the case may be, any and all checks, notes, drafts, and
other documents or instruments relating to the Collateral;
(ii) To receive, open and dispose of all mail addressed to
such Borrower and to notify postal authorities to change the address
for delivery thereof to such address as the Administrative Agent may
designate;
(iii) To request at any time from customers indebted on
Accounts, in the name of such Borrower or a third party designee of the
Administrative Agent, information concerning the Accounts and the
amounts owing thereon;
(iv) To give customers indebted on Accounts notice of the
Lenders' interest therein, and/or to instruct such customers to make
payment directly to the Administrative Agent for such Borrower's
account; and
(v) To take or bring, in the name of the Administrative
Agent, the Lenders or such Borrower, all steps, actions, suits or
proceedings deemed by the Administrative Agent necessary or desirable
to enforce or effect collection of the Accounts.
(b) Additional Powers of the Administrative Agent under Article
2692 of the Quebec Civil Code. For greater certainty, and without limiting the
powers of the Administrative Agent under the Credit Documents, each of the
Canadian Borrowers and the Lenders hereby acknowledges that the Administrative
Agent shall be the holder of an irrevocable power of attorney of the creditors
within the meaning of Article 2692 of the Civil Code of Quebec for purposes of
holding any hypothec, granted by any Canadian Borrower on its property, securing
payment of bonds or other titles of indebtedness issued by such Canadian
Borrower under this Credit Agreement. The execution of any such hypothec by the
Administrative Agent for the benefit of any of the Lenders, prior to the date
hereof, is hereby ratified and confirmed by the Lenders. Notwithstanding the
provisions of Section 32 of an Act respecting special powers of
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legal persons (Quebec), the Administrative Agent may acquire and be the holder
of any such bonds or other titles of indebtedness.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in Section 10.1(a) and (b) above may only be exercised by the
Administrative Agent on and after the occurrence and during the continuation of
an Event of Default which has not otherwise been waived by the Administrative
Agent.
10.3 CANADIAN AGENT.
For the purposes of Section 10.1(a) and Section 10.2 only, all
references to the Administrative Agent shall include the Canadian Agent in the
case of the Canadian Borrowers.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Borrower shall default in the payment of
(i) any principal owing hereunder, under any of the Credit Documents or
in connection herewith when due or (ii) any interest, fees or other
amounts owing hereunder, under any of the other Credit Documents or in
connection herewith within five days after the date due;
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the Credit Documents, or in any written statement or certificate
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was made or deemed to have been
made;
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance
of any term condition or agreement contained in Sections
7.1(i), 7.12, Article VIII or Article IX, or
(ii) default in the due performance or observance
of any term or condition in Section 7.1(a), (b), (c) or (d)
and such default shall remain unremedied for a period of
fifteen (15) Business Days after the occurrence thereof.
(iii) default in the due performance or observance
of any term, covenant or agreement (other than those referred
to in subsections (a), (b), (c)(i) or (c)(ii) of
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this Section 11.1) contained in this Agreement and such
default shall continue unremedied for a period of thirty (30)
days after the occurrence thereof;
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents (subject to applicable
grace or cure periods, if any), or (ii) any covenant, agreement or
obligation of any party (other than the Administrative Agent or any of
the Lenders) contained in or evidenced by any of the Credit Documents
shall cease to be enforceable in accordance with its terms, or any
party (other than the Administrative Agent or the Lenders) to any
Credit Document shall deny or disaffirm its obligations under any of
the Credit Documents, or any Credit Document shall be canceled,
terminated, revoked or rescinded without the express prior written
consent of the Administrative Agent, or any action or proceeding shall
have been commenced by any Person (other than the Administrative Agent
or any Lender) seeking to cancel, revoke, rescind or disaffirm the
obligations of any party to any Credit Document, or any court or other
Governmental Authority shall issue a judgment, order, decree or ruling
to the effect that any of the obligations of any party to any Credit
Document are illegal, invalid or unenforceable;
(e) Guaranties. Any Guarantor or any Person acting by or
on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under a Guaranty Agreement;
(f) Bankruptcy, etc. The occurrence of any Bankruptcy
Event with respect to a Credit Party;
(g) Defaults under Other Agreements. With respect to any
Indebtedness in excess of $2,500,000 (other than Indebtedness
outstanding under this Agreement) or the 2008 Senior Notes or the 2009
Senior Notes, (i) a Credit Party shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any) with
respect to any such Indebtedness, or (B) default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the effect
of which default or other event or condition is to cause, or permit,
the holder or holders of such Indebtedness (or trustee or agent on
behalf of such holders) to cause (determined without regard to whether
any notice or lapse of time is required), any such Indebtedness to
become due prior to its stated maturity; or (ii) any such Indebtedness
shall be declared due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the stated
maturity thereof;
(h) Judgments. One or more judgments or decrees shall be
entered against a Credit Party involving a liability of $2,500,000 or
more in the aggregate (to the extent not paid or fully covered by
insurance (subject to payment of the applicable deductible) provided by
a carrier who, upon request, has not denied coverage) and any such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within thirty (30) days from the entry thereof;
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(i) ERISA. Any Termination Event with respect to a
Benefit Plan shall have occurred and be continuing thirty (30) days
after notice thereof shall have been given to the Company by the Agent
or any Lender, and the then current value of such Benefit Plan's
benefits guaranteed under Title IV of ERISA exceeds the then current
value of such Benefit Plan's assets allocable to such benefits by more
than $100,000 (or in the case of a Termination Event involving the
withdrawal of a substantial employer, the withdrawing employer's
proportionate share of such excess exceeds such amount);
(j) Ownership. There shall occur a Change of Control; or
(k) Defective Liens. Any other Credit Document shall fail
to be in full force and effect or to give the Administrative Agent
and/or the Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby (except as such documents
may be terminated or no longer in force and effect in accordance with
the terms thereof, other than those indemnities and provisions which by
their terms shall survive).
11.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter,
the Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrowers, take any of the following actions
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against any Credit Party, except as otherwise specifically
provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal
of and any accrued interest in respect of all Loans and any and all
other indebtedness or obligations of any and every kind owing by the
Borrowers to any of the Lenders hereunder to be due whereupon the same
shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Borrowers.
(c) Cash Collateral. Direct the Borrowers to pay (and the
Borrowers agree that upon receipt of such written notice, or upon the
occurrence of an Event of Default under Section 11.1(f), they will
immediately pay) to the Administrative Agent additional cash, to be
held by the Administrative Agent, for the benefit of the Lenders, in a
cash collateral account as security for the LOC Obligations and BA
Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit and repayment of the Face Amount of
outstanding Bankers' Acceptances in an aggregate amount equal to the
maximum aggregate amount which may be drawn under all Letters of
Credits then outstanding and the Face amount of outstanding Bankers'
Acceptances. Accrued interest on the cash collateral account shall be
for the account of the Borrowers, subject to the prior payment in full
in cash of all of the Obligations.
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(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents or at law,
including, without limitation, the Guaranty Agreements, the Security
Agreements, the U.S. Pledge Agreement, and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
11.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit and Bankers'
Acceptances, all accrued interest in respect thereof, all accrued and unpaid
fees and other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Agents or the Lenders which notice or other action is expressly
waived by the Borrowers.
11.3. CONVERSION AND REDENOMINATION CERTAIN LOANS; PURCHASE OF RISK
PARTICIPATIONS.
(a) Conversion and Redenomination of Loans.
Notwithstanding anything herein to the contrary, upon a termination of
the Commitments following the occurrence of an Event of Default (a
"Commitment Termination Event"), (i) all outstanding Loans denominated
in Canadian Dollars or bearing interest at a rate other than the U.S.
Base Rate shall be redenominated and/or converted into U.S. Base Rate
Loans denominated in Dollars and (ii) all BA Obligations and LOC
Obligations owed to a Lender in Canadian Dollars shall be redenominated
into BA Obligations and LOC Obligations owed in Dollars, in each case
on and with effect from the soonest practicable date following the
Commitment Termination Event as determined by the Administrative Agent
(the "Conversion Date") and at the Bank of Canada published noon
exchange rate or closing exchange rate (whichever is closer to the time
of payment) in effect as of such Conversion Date. The Borrowers hereby
agree to pay to the Administrative Agent, for the pro rata benefit of
the Lenders, on the Conversion Date any amounts owing pursuant to
Section 4.14 as a result of any such conversion occurring prior to the
end of an Interest Period. The Administrative Agent will promptly
notify the Borrowers and the Lenders of any such redenomination and
conversion following a Commitment Termination Event.
(b) Purchase of Risk Participations. Each Lender hereby
agrees that it shall forthwith purchase, as of the Conversion Date (but
adjusted for any payments received from a Borrower on or after such
date and prior to such purchase), from the other Lenders such
Participation Interests in the outstanding Loans, LOC Obligations and
BA Obligations (whether or not such Loans, LOC Obligations and BA
Obligations have been redenominated or converted pursuant to Section
11.3(a)) as shall be necessary to cause each such Lender to share in
all Loans, LOC Obligations and BA Obligations ratably based upon its
Commitment Percentage with respect to Participation Interests in all
Loans, LOC Obligations and BA Obligations (determined before giving
effect to any termination of the Commitments), provided that (1) all
interest and fees payable on a Loan, LOC Obligation or BA Obligation
shall be for the account of the Lender that originally extended such
Loan or issued or participated in the related Letters of Credit or
Bankers' Acceptances, as the case may be, until the date as of which
the respective Participation Interest is purchased and (2) if any
purchase of a Participation Interest required to be made pursuant to
this sentence is not made on the Conversion Date, then at
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the time such purchase is actually made the purchasing Lender shall be
required to pay to the selling Lender, to the extent not paid to such
selling Lender by the applicable Borrower in accordance with the terms
of this Credit Agreement, interest on the principal amount of the
Participation Interest purchased for each day from and including the
day upon which such purchase of the Participation Interest would
otherwise have occurred to but excluding the date of actual payment for
the purchase of such Participation Interest, at the rate equal to the
Federal Funds Rate.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement,
the Commitments made hereunder shall terminate on the U.S. Maturity Date or the
Canadian Maturity Date, as the case may be, and all then outstanding Loans and
BA Obligations shall be immediately due and payable in full and all outstanding
Letters of Credit shall immediately terminate. The Credit Parties may terminate
in full the Commitments hereunder at any time and all then outstanding Loans and
BA Obligations shall be immediately due and payable in full and all outstanding
Letters of Credit shall immediately terminate. Unless sooner demanded in
accordance with this Agreement, all Obligations shall become due and payable as
of any termination hereunder or under Article XI and, pending a final
accounting, the Administrative Agent may withhold, or cause to be withheld, any
balances in the Borrowers' Loan accounts, in an amount sufficient, in the
Administrative Agent's reasonable discretion, to cover all of the Obligations,
whether absolute or contingent, unless supplied with a satisfactory indemnity to
cover all of such Obligations. All of the Agents' and the Lenders' rights, liens
and security interests shall continue after any termination until all
Obligations have been paid and satisfied in full.
ARTICLE XIII
THE AGENTS
13.1 APPOINTMENT.
Each Lender hereby designates and appoints Wachovia as Administrative
Agent and Congress Financial Corporation (Canada), as Canadian Agent to act as
specified herein and the other Credit Documents, and each such Lender hereby
authorizes the Agents as the agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with such other
powers as are reasonably incidental thereto, including, without limitation,
holding all Collateral and all payments of principal, interest, fees, charges
and expenses received pursuant to this Credit Agreement or any other Credit
Document for the benefit of the Lenders. Notwithstanding any provision to the
contrary elsewhere herein and in the other Credit Documents, the Agents shall
not have any duties or responsibilities, except those expressly set forth herein
and therein, or any fiduciary relationship
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with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any of the other
Credit Documents, or shall otherwise exist against the Agents. The provisions of
this Article are solely for the benefit of the Agents and the Lenders and none
of the Consolidated Parties shall have any rights as a third party beneficiary
of the provisions hereof. In performing its functions and duties under this
Agreement and the other Credit Documents, the Agents shall act solely as agent
of the Lenders and do not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrowers or any
of the Consolidated Parties. Notwithstanding any provision to the contrary in
this Agreement or any of the other Credit Documents, the Canadian Agent shall
not take or omit to take any discretionary action under this Agreement or any of
the other Credit Documents without the prior authorization of the Administrative
Agent.
Without limiting the generality of this Section 13.1, each Lender
expressly authorizes the Administrative Agent to determine, subject to the terms
of this Credit Agreement, on behalf of such Lender whether or not Accounts shall
be deemed to constitute Eligible Accounts Receivable or Inventory shall be
deemed to constitute Eligible Inventory, to deduct reserves from the U.S.
Borrowing Base, and to increase and decrease such reserves from time to time.
Such authorization may be withdrawn by the Required Lenders; provided, however,
that unless otherwise agreed by the Administrative Agent such withdrawal of
authorization shall not become effective until the thirtieth Business Day after
receipt of such notice by the Administrative Agent. Thereafter, the Required
Lenders shall jointly instruct the Administrative Agent in writing regarding
such matters with such frequency as the Required Lenders shall jointly
determine.
13.2 DELEGATION OF DUTIES.
The Agents may execute any of their respective duties hereunder or
under the other Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agents shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected with reasonable care.
13.3 EXCULPATORY PROVISIONS.
Each of the Agents or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall not be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Consolidated
Parties contained herein or in any of the other Credit Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by an Agent under or in connection herewith or in connection with
the other Credit Documents, or enforceability or sufficiency therefor of any of
the other Credit Documents, or for any failure of any of the Borrowers to
perform its obligations hereunder or thereunder. An Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement, or any of the
other Credit Documents or for any representations, warranties, recitals or
statements made herein or therein or made by the Borrowers or any of the
Consolidated Parties in any written or oral statement or in any financial or
other statements,
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instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by an Agent to the Lenders or by or on behalf of
the Consolidated Parties to an Agent or any Lender or be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default or to inspect the properties, books or records of
the Consolidated Parties. The Agents are not trustees for the Lenders and owe no
fiduciary duty to any of the Lenders.
13.4 RELIANCE ON COMMUNICATIONS.
The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, e-mail, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers or any of the Consolidated Parties,
independent accountants and other experts selected by the Administrative Agent
with reasonable care). Each of the Agents may deem and treat the Lenders as the
owner of its respective interests hereunder for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed with
the appropriate Agent in accordance with Section 14.3(b). Each of the Agents
shall be fully justified in failing or refusing to take any action under this
Agreement or under any of the other Credit Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or under
any of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 14.6, all the
Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
13.5 NOTICE OF DEFAULT.
An Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless such Agent has
received notice from a Lender or a Consolidated Parties referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that an Agent receives such a
notice, such Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders.
13.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.
Each Lender expressly acknowledges that neither of the Agents nor any
of their officers, directors, employees, agents, attorneys-in-fact or affiliates
(including, without limitation, First Union Securities, Inc. d/b/a Wachovia
Securities (the "Arranger"); it being understood that each reference to
affiliate in this Section 13.6 shall include the Arranger) has made any
representations or
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warranties to it and that no act by an Agent or any affiliate thereof
hereinafter taken, including any review of the affairs of the Consolidated
Parties, shall be deemed to constitute any representation or warranty by an
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Consolidated Parties and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Consolidated Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agents hereunder, the Agents
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, assets, property,
financial or other conditions, prospects or creditworthiness of the Consolidated
Parties which may come into the possession of an Agent or any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates.
13.7 INDEMNIFICATION.
The Lenders agree to indemnify each Agent in its capacity as such (to
the extent not reimbursed by the Borrowers and without limiting the obligation
of the Borrowers to do so), ratably according to their respective Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including without limitation at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against an Agent in its respective capacity as such in any way relating to or
arising out of this Agreement or the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by an Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of an Agent. If any
indemnity furnished to an Agent for any purpose shall, in the opinion of such
Agent, acting reasonably, be insufficient or become impaired, such Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The agreements
in this Section shall survive the payment of the Obligations and all other
amounts payable hereunder and under the other Credit Documents.
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13.8 AGENT IN ITS INDIVIDUAL CAPACITY.
The Agents and their respective affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrowers or
any other member of the Consolidated Parties as though such Agents were not
agents hereunder. With respect to the Loans made, the Agents shall have the same
rights and powers under this Agreement as any Lender and may exercise the same
as though they were not agents hereunder, and the terms "Lender" and "Lenders"
shall include the Administrative Agent and the Canadian Agent in their
individual capacities.
13.9 SUCCESSOR AGENT.
An Agent may, at any time, resign upon twenty (20) days' written notice
to the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent or Canadian
Agent, as the case may be, which successor, so long as no Event of Default then
exists, shall be reasonably acceptable to the Company. If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within thirty (30) days after the notice of resignation, then
the retiring Agent shall select a successor Agent provided that such successor
is a Lender hereunder or a commercial bank or financial institution organized or
licensed under the laws of the United States of America or any State thereof or
of Canada or any province thereof, as applicable, and, together with its
Affiliates in the case of a successor Canadian Agent, has a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent or Canadian Agent, as the case may be, hereunder by a
successor, such successor Administrative Agent or Canadian Agent, as the case
may be, shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent or Canadian
Agent, as the case may be, and the retiring Administrative Agent or Canadian
Agent, as the case may be, shall be discharged from its duties and obligations
as Administrative Agent or Canadian Agent, as the case may be, as appropriate,
under this Agreement and the other Credit Documents and the provisions of this
Section 13.9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs each of the Agents
to enter into the Security Documents for the benefit of the Lenders.
Each Lender authorizes and directs the Administrative Agent to make
such changes to the form of Acknowledgment Agreement attached hereto as
Exhibit A as it deems necessary from time to time in order to obtain
any Acknowledgment Agreement from any landlord, warehouseman, filler,
packer, processor, mortgagee or any other party who has an interest in
any real property where Collateral is located with respect to any
Credit Party. Each Lender also authorizes and directs each of the
Agents to review and approve all agreements regarding the lockboxes and
the lockbox accounts (including the Lockbox Agreements) on such terms
as the Agents deem necessary. Each Lender hereby agrees, and each
holder of any Note by the acceptance thereof will be deemed to agree,
that, except as otherwise set forth herein, any action taken by the
Required Lenders or each of the Lenders, as applicable, in
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accordance with the provisions of this Credit Agreement or the Security
Documents, and the exercise by the Required Lenders or each of the
Lenders, as applicable, of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders. The
Administrative Agent and, with the prior approval of the Administrative
Agent, the Canadian Agent, is hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent from
any Lender, from time to time prior to an Event of Default, to take any
action with respect to any Collateral or Security Document which may be
necessary or appropriate to perfect and maintain perfected the security
interest in and liens upon the Collateral granted pursuant to the
Security Documents.
(b) The Lenders hereby authorize the Administrative Agent
and, with the prior approval of the Administrative Agent, the Canadian
Agent, at its option and in its discretion, to release any Lien granted
to or held by either such Agent upon any Collateral (i) upon
termination of the Commitments and payment in cash and satisfaction of
all of the Obligations (including the LOC Obligations) at any time
arising under or in respect of this Credit Agreement or the Credit
Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the
proceeds of such sale by an Agent if the applicable Credit Party
certifies to such Agent that the sale or disposition is made in
compliance with Section 9.5 (and such Agent may rely conclusively on
any such certificate, without further inquiry) or (iii) if approved,
authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder.
Upon request by an Agent at any time, the Lenders will confirm in
writing such Agent's authority to release particular types or items of
Collateral pursuant to this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Credit Agreement, or
consented to in writing by the Required Lenders or all of the Lenders,
as applicable, and upon at least five (5) Business Days' prior written
request by the applicable Credit Party, the Administrative Agent and,
with the prior approval of the Administrative Agent, the Canadian
Agent, shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of
the Liens granted to the Administrative Agent for the benefit of the
Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided that (i) such Agent shall not be required to
execute any such document on terms which, in such Agent's opinion,
acting reasonably, would expose such Agent to liability or create any
obligation or entail any consequence other than the release of such
Liens without recourse or warranty and (ii) such release shall not in
any manner discharge, affect or impair the Obligations or any Liens
upon (or obligations of such Credit Party in respect of) all interests
retained by such Credit Party, including, without limitation, the
proceeds of the sale, all of which shall continue to constitute part of
the Collateral. In the event of any sale or transfer of Collateral, or
any foreclosure with respect to any of the Collateral, the
Administrative Agent and, with the prior approval of the Administrative
Agent, the Canadian Agent, shall be authorized to deduct all of the
expenses reasonably incurred by such Agent from the proceeds of any
such sale, transfer or foreclosure.
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(d) Neither Agent shall have any obligation whatsoever to
the Lenders or to any other Person to assure that the Collateral exists
or is owned by the Credit Parties or is cared for, protected or insured
or that the liens granted to either such Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the
rights, authorities and powers granted or available to either such
Agent in this Section 13.10 or in any of the Security Documents, it
being understood and agreed that in respect of the Collateral, or any
act, omission or event related thereto, the Administrative Agent and,
with the prior approval of the Administrative Agent, the Canadian
Agent, may act in any manner it may deem appropriate, in its reasonable
discretion, given either such Agent's own interest in the Collateral as
one of the Lenders and that either such Agent shall have no duty or
liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct.
(e) The Administrative Agent hereby authorizes and
appoints the Canadian Agent as the Administrative Agent's
attorney-in-fact, to exercise all of the powers granted to the Canadian
Agent in subsections (b) and (c) of this Section 13.10 on behalf of the
Administrative Agent in its capacity as collateral agent under the
Canadian Security Agreement.
13.11 RIGHTS AND REMEDIES TO BE EXERCISED BY AGENT ONLY.
Each Lender agrees that, except as set forth in Subsection 14.2, no
Lender shall have any right individually (i) to realize upon the security
created by the Security Documents or any other Credit Document, (ii) to enforce
any provision of this Credit Agreement or any other Credit Document against one
or more of the Credit Parties, or (iii) to make demand under this Credit
Agreement or any other Credit Document against one or more of the Credit
Parties.
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ARTICLE XIV
MISCELLANEOUS
14.1 NOTICES.
Except as otherwise expressly provided herein, all notices, requests
and other communications shall have been duly given and shall be effective (a)
when delivered by hand, (b) when transmitted via telecopy (or other facsimile
device), (c) the Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address or telecopy numbers set forth on Schedule 14.1 attached hereto, or
at such other address as such party may specify by written notice to the other
parties hereto; provided, however, that if any notice is delivered on a day
other than a Business Day, or after 5:00 P.M. (Eastern time) on any Business
Day, then such notice shall not be effective until the next Business Day; and
provided further, that notices of default shall be effective only upon delivery
by hand or by a reputable national overnight air courier service (unless a
telecopy notice of default is sent and receipt is confirmed by telephone or
telecopy by a Senior Management Member or Senior Financial Officer of the
Company, in which case such notice of default shall be effective upon receipt).
14.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence and during the continuation of an Event of Default, each Lender is
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights being hereby expressly
waived), to set-off and to appropriate and apply any and all deposits (general
or special) and any other indebtedness at any time held or owing by such Lender
(including, without limitation branches, agencies or Affiliates of such Lender
wherever located) to or for the credit or the account of a Credit Party against
obligations and liabilities of a Credit Party to such Lender hereunder, under
the Notes, the other Credit Documents or otherwise, irrespective of whether such
Lender shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Lender subsequent thereto. Each Credit Party hereby agrees that any
Person purchasing a participation in the Loans and Commitments hereunder
pursuant to Section 14.3(c) may exercise all rights of set-off with respect to
its participation interest as fully as if such Person were a Lender hereunder.
14.3 BENEFIT OF AGREEMENT.
(a) Generally. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that a Borrower may not assign
and transfer any of its interests without prior written consent of the
Lenders; and provided further that the rights of each Lender to
transfer, assign or
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grant participations in its rights and/or obligations hereunder shall
be limited as set forth in this Section 14.3.
(b) Assignments. Subject to the consent of the Borrowers
(provided, however, that no consent shall be required during the
existence and continuation of an Event of Default) and of the
Administrative Agent, which consent shall not be unreasonably withheld,
each Lender may assign all or a portion of its rights and obligations
hereunder pursuant to an assignment agreement substantially in the form
of Exhibit M to one or more Eligible Assignees; provided that any such
assignment shall be in a minimum aggregate amount of $5,000,000 of the
Commitments and in integral multiples of $1,000,000 above such amount
and that each such assignment shall be of a constant, not varying,
percentage of all of the assigning Lender's rights and obligations
under this Agreement. Any assignment hereunder shall be effective upon
satisfaction of the conditions set forth in the preceding sentence and
delivery to the Administrative Agent of written notice of the
assignment together with a transfer fee of $3,500 (or with respect to
an assignment of the Canadian Revolving Loan Commitment, a transfer fee
of $1,750) payable to the Administrative Agent for its own account;
provided that any assignment of the Canadian Revolving Loan Commitment
shall require delivery of written notice of the assignment to the
Canadian Agent together with a transfer fee of $1,750 payable to the
Canadian Agent for its own account. Upon the effectiveness of any such
assignment, the assignee shall become a "Lender" for all purposes of
this Agreement and the other Credit Documents and, to the extent of
such assignment, the assigning Lender shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment
components being assigned. Along such lines, the Borrowers agree that
upon effectiveness of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of
their respective interests substantially in the form of the original
Note (but with notation thereon that it is given in substitution for
and replacement of the original Note or any replacement notes thereof).
In addition to the assignments permitted under this Section 14.3(b),
any Lender may (without notice to the Borrowers, the Administrative
Agent or any other Lender and without payment of any fee) (i) assign
and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank and (ii) assign
all or any portion of its rights under this Agreement and its Loans and
its Notes to an Affiliate. No such assignment, as set forth in the
preceding sentence, shall release the assigning Lender from its
obligations hereunder.
By executing and delivering an assignment agreement in accordance with
this Section 14.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants
that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and the assignee
warrants that it is an Eligible Assignee; (ii) except as set forth in
clause (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
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of this Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of the Consolidated Parties or the performance or
observance by any of the Consolidated Parties of any of their
obligations under this Agreement, any of the other Credit Documents or
any other instrument or document furnished pursuant hereto or thereto;
(iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee
confirms that it has received a copy of this Agreement, the other
Credit Documents and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Agents, such assigning
Lender or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement
and the other Credit Documents; (vi) such assignee appoints and
authorizes the Agents to take such action on its behalf and to exercise
such powers under this Agreement or any other Credit Document as are
delegated to the Agents by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all
the obligations which by the terms of this Agreement and the other
Credit Documents are required to be performed by it as a Lender.
Each assignee of a Canadian Lender shall be deemed to have
confirmed and ratified the constitution of the Canadian Agent of the
holder of such irrevocable power of attorney (fonde de pouvoir) by
execution of the relevant assignment agreement. Each of the Canadian
Borrowers hereby acknowledges that each bond issued by any of the
Canadian Borrowers constitutes a title of indebtedness, as such term is
used in Article 2692 of the Civil Code of Quebec.
(c) Participations. Each Lender may sell, transfer, grant
or assign participations in all or any part of such Lender's rights,
obligations or rights and obligations hereunder; provided that (i) such
selling Lender shall remain a "Lender" for all purposes under this
Agreement (such selling Lender's obligations under the Credit Documents
remaining unchanged) and the participant shall not constitute a Lender
hereunder, (ii) no such participant shall have, or be granted, rights
to approve any amendment or waiver relating to this Agreement or the
other Credit Documents except to the extent any such amendment or
waiver would (A) reduce the principal of or rate of interest on or fees
in respect of any Loans in which the participant is participating, (B)
postpone the date fixed for any payment of principal (including
extension of the U.S. Maturity Date or the Canadian Maturity Date, as
the case may be, but excluding any mandatory prepayment), interest or
fees in which the participant is participating, or (C) release all or
substantially all of the guaranties or the collateral (except as
expressly provided in the Credit Documents) supporting any of the Loans
or Commitments in which the participant is participating, and (iii)
sub-participations by the participant (except to an affiliate, parent
company or affiliate of a parent company of the participant) shall be
prohibited. In the case of any such participation, the participant
shall not have any rights under this Agreement or the other Credit
Documents (the participant's rights against the selling Lender in
respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation)
and all
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amounts payable by the Borrowers hereunder shall be determined as if
such Lender had not sold such participation, provided, however, that
such participant shall be entitled to receive additional amounts under
Sections 4.9 through 4.14; provided that such participant shall not be
entitled to receive any amount greater than such selling Lender would
have received had such Lender not sold such participation.
14.4 NO WAIVER; REMEDIES CUMULATIVE.
The Borrowers hereby waive due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No failure or
delay on the part of an Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrowers or any other Credit Party and an Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies provided herein
are cumulative and not exclusive of any rights or remedies which the Agents or
any Lender would otherwise have. No notice to or demand on the Borrowers in any
case shall entitle the Borrowers or any other Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
14.5 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to: (a) pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent, the Canadian Agent and the Arranger in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of Xxxxx & Xxx Xxxxx, PLLC, special counsel to the Agents as well as
Canadian counsel to the Agents) and any amendment, waiver or consent relating
hereto and thereto including, but not limited to, any such amendments, waivers
or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Borrowers under this Agreement or
any other Credit Party under the other Credit Documents and of each Agent and
the Lenders in connection with enforcement of the Credit Documents and the
documents and instruments referred to therein (including, without limitation, in
connection with any such enforcement, the reasonable fees and disbursements of
counsel for each Agent and each of the Lenders); (b) pay and hold each of the
Lenders harmless from and against any and all claims for Non-Excluded Taxes as
set forth in Section 4.13 and hold each of the Lenders harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Lender) to pay such Non-Excluded
Taxes; and (c) indemnify each Agent, the Arranger and each Lender, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not any Agent, the Arranger or Lender is a party thereto) related to the
entering into and/or performance of any Credit Document or the use of proceeds
of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and
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disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent they relate to disputes solely between
or among the Lenders (excluding Wachovia acting in its capacity as
Administrative Agent or Congress Financial Corporation (Canada) acting in its
capacity as Canadian Agent) or they are incurred by reason of gross negligence
or willful misconduct on the part of the Person to be indemnified).
14.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither the amendment or waiver of any provision of this Credit
Agreement or any other Credit Document, nor the consent to any departure by any
Borrower or other Credit Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders, or if the
Lenders shall not be parties thereto, by the parties thereto and consented to by
the Required Lenders, and each such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that no amendment, waiver or consent shall unless in writing and
signed by all the Lenders, do any of the following: (a) increase the Commitments
of the Lenders or subject the Lenders to any additional obligations, (b) except
as otherwise expressly provided in this Credit Agreement, reduce the principal
of, or interest on, any Note or any Letter of Credit reimbursement obligations
or any fees hereunder, (c) postpone any date fixed for any payment in respect of
principal of, or interest on, any Note or any Letter of Credit reimbursement
obligations or any fees hereunder, (d) change the percentage of the Commitments,
or any minimum requirement necessary for the Lenders or the Required Lenders to
take any action hereunder, (e) amend or waive this Section 14.6, or change the
definition of Required Lenders, (f) release any Borrower or any Guarantor, (g)
except as otherwise expressly provided in this Credit Agreement, and other than
in connection with the financing, refinancing, sale or other disposition of any
asset of the Credit Parties permitted under this Credit Agreement, release any
Liens in favor of the Lenders on any material portion of the Collateral or (h)
amend or modify the definition of "U.S. Borrowing Base" or "Canadian Borrowing
Base" or any defined term or component set forth in the definition thereof such
that more credit would be available to the Borrowers; provided, however, that
(i) the foregoing shall not limit the adjustment by the Administrative Agent of
any reserve implemented by Administrative Agent, and (ii) the foregoing shall
not prevent the Administrative Agent from restoring any component of the
Borrowing Base which had been lowered by the Administrative Agent back to the
value of such component as in effect on the Closing Date or to an intermediate
value; and provided, further, that no amendment, waiver or consent affecting the
rights or duties of the Agents or the Issuing Lender under any Credit Document
shall in any event be effective, unless in writing and signed by the Agents
and/or the Issuing Lender, as applicable, in addition to the Lenders required
hereinabove to take such action. Notwithstanding any of the foregoing to the
contrary, the consent of the Borrowers shall not be required for any amendment,
modification or waiver of the provisions of Article XIII (other than the
provisions of Section 13.9). In addition, the Borrowers and the Lenders hereby
authorize the Administrative Agent to modify this Credit Agreement by
unilaterally amending or supplementing Schedule 1.1A from time to time in the
manner requested by the Borrowers, the Agents or any Lender in order to reflect
any assignments or transfers of the Loans as provided for hereunder; provided,
however, that the Administrative Agent shall promptly deliver a copy of any such
modification to the Borrowers and each Lender.
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14.7 DEFAULTING LENDER.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then it shall not be entitled to vote on any matter requiring the consent
of the Required Lenders or to object to any matter requiring the consent of all
the Lenders; provided, however, that all other benefits and obligations under
the Credit Documents shall apply to such Defaulting Lender.
14.8 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Agreement to produce or account for more than one such
counterpart. Delivery of an executed counterpart by telecopy shall be as
effective as delivery of a manually executed counterpart hereto and shall
constitute a representation that an original executed counterpart will be
provided.
14.9 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
14.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND
WARRANTIES.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Agreement, the
making of the Loans, the issuance of the Letters of Credit, and the repayment of
the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.
14.11 CURRENCY.
The use of term "dollars" or "Dollars" or the symbol "$" or "U.S. $" in
the Credit Documents shall mean a reference to lawful money of the United States
of America unless specifically indicated otherwise.
14.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document
shall be brought in the courts of the State of North Carolina in
Mecklenburg County or of the United States for the Western District of
North Carolina, and, by execution and delivery of this Credit
Agreement, each of the Borrowers hereby irrevocably accepts for itself
and in respect of its property, generally and
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unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Borrowers further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address set out for notices
pursuant to Section 14.1, such service to become effective three (3)
days after such mailing. Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against any Borrower in any other jurisdiction.
(b) Each of the Borrowers hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) The Company hereby irrevocably appoints CT
Corporation System, which currently maintains a North Carolina office
situated at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, as
its agent to receive service of process or other legal summons for
purposes of any legal action or proceeding. So long as the Company has
any obligation under this Credit Agreement or any of the Credit
Documents, it will maintain a duly appointed agent in North Carolina
for the service of such process or summons, and if it fails to maintain
such an agent, any such process or summons may be served by mailing a
copy thereof by registered mail, or a form of mail substantially
equivalent thereto, addressed to it at its address as provided for
notices hereunder.
14.13 ARBITRATION.
(a) Notwithstanding the provisions of Section 14.12 to
the contrary, upon demand of any party hereto, whether made before or
after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Credit
Agreement and other Credit Documents ("Disputes") between or among
parties to this Credit Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from
Credit Documents executed in the future, or claims arising out of or
connected with the transaction reflected by this Credit Agreement.
Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration
Rules") of the American Arbitration Association (the "AAA") and Title 9
of the U.S. Code. All arbitration hearings shall be conducted in
Charlotte, North Carolina. A hearing shall begin within ninety (90)
days of demand for arbitration and all hearings shall be concluded
within one hundred twenty (120) days of demand for arbitration. These
time limitations may not be extended unless a party shows cause for
extension and then no more than a total extension of sixty (60)
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days. The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any
Dispute. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys selected from the Commercial Financial
Dispute Arbitration Panel of the AAA. The single arbitrator selected
for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the
hearing will be conducted or if such person is not available to serve,
the single arbitrator may be a licensed attorney. The parties hereto do
not waive applicable Federal or state substantive law except as
provided herein. A judgment upon the award may be entered in any court
having jurisdiction. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to Hedging
Agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the Administrative Agent, the Lenders and the Borrowers
agree to preserve, without diminution, certain remedies that the
Administrative Agent on behalf of the Lenders may employ or exercise
freely, independently or in connection with an arbitration proceeding
or after an arbitration action is brought. The Administrative Agent on
behalf of the Lenders shall have the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable (i) all rights to foreclose against
any real or personal property or other security by exercising a power
of sale granted under Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the
sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, setoff, and peaceful possession
of personal property; (iii) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of
judgment. Any claim or controversy with regard to the Administrative
Agent's entitlement on behalf of the Lenders to exercise such remedies
is a Dispute. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a
party in a Dispute.
(c) The parties hereto agree that they shall not have a
remedy of punitive or exemplary damages against the other in any
Dispute and hereby waive any right or claim to punitive or exemplary
damages they have now or which may arise in the future in connection
with any Dispute whether the Dispute is resolved by arbitration or
judicially.
(d) By execution and delivery of this Credit Agreement,
each of the parties hereto accepts, for itself and in connection with
its properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted under
the Arbitration Rules in Charlotte, North Carolina and irrevocably
agrees to be bound by any final judgment rendered thereby in connection
with this Credit Agreement from which no appeal has been taken or is
available.
14.14 WAIVER OF JURY TRIAL.
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TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.15 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
14.16 LOAN ENTIRETY.
This Agreement together with the other Credit Documents represent the
entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein; provided, however, that the Administrative
Agent Fee Letter shall remain in effect subsequent to the execution and delivery
of this Agreement.
14.17 BINDING EFFECT; AMENDMENT AND RESTATEMENT OF EXISTING CREDIT
AGREEMENT; FURTHER ASSURANCES.
This Agreement shall become effective at such time, on or after the
Closing Date, that the conditions precedent set forth in Section 5.1 have been
satisfied and when it shall have been executed by each Borrower and the Agents,
and the Agents shall receive copies hereof (telecopied or otherwise) which, when
taken together, bear the signatures of each Lender (including the Issuing
Lenders), and thereafter this Agreement shall be binding upon and inure to the
benefit of each Borrower, each Lender (including the Issuing Lenders) and the
Agents, together with their respective successors and assigns. The Borrowers
agree, upon the request of the Administrative Agent and/or the Required Lenders,
to promptly take such actions, as reasonably requested, as are appropriate to
carry out the intent of this Agreement and the other Credit Documents,
including, but not limited to, such actions as are reasonably necessary to
ensure that the Lenders have a perfected security interest in all collateral
securing the Obligations, subject to no Liens other than Permitted Liens.
14.18 CONFIDENTIALITY.
The Agents and the Lenders agree to keep confidential (and to cause
their respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Agents or any such Lender by or on behalf of the Credit Parties
(whether before or after the Closing Date) which relates to the Credit Parties
(the "Information"). Notwithstanding the foregoing, the Agents and Lenders shall
be permitted to disclose Information (i) to its affiliates, officers, directors,
employees, agents and representatives in
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connection with their participation in any of the transactions evidenced by this
Agreement or any other Credit Documents or the administration of this Agreement
or any other Credit Documents (so long as such Persons are notified of the
confidential nature of the information); (ii) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any Governmental Authority; (iii) to the extent such Information
(A) becomes publicly available other than as a result of a breach of this Credit
Agreement or any agreement entered into pursuant to clause (iv) below, (B)
becomes available to the Agents or any Lender on a non-confidential basis or (C)
was available to the Agents or Lenders on a non-confidential basis prior to its
disclosure to the Agents or any Lender by the Credit Parties; (iv) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first
specifically agrees in a writing furnished to and for the benefit of the parties
hereto to be bound by the terms of this Section; (v) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information customarily found in such publications or (vi) to the extent
that the Credit Parties shall have consented in writing to such disclosure.
Nothing set forth in this Section shall obligate the Agents or any Lender to
return any materials furnished by the Credit Parties.
14.19 JUDGMENT CURRENCY.
(a) If for the purposes of obtaining judgment in any
court it is necessary to convert all or any part of the Indebtedness or
any other amount due to the Lenders hereunder or under any security in
respect of the Borrowers' obligations hereunder in any currency (the
"Original Currency") into another currency (the "Other Currency") each
Borrower to the fullest extent that it may effectively do so, agrees
that the rate of exchange used shall be that at which, in accordance
with normal banking procedures, the Administrative Agent could purchase
the Original Currency with the Other Currency at its principal offices
in Charlotte, North Carolina on the day (a "Business Day") on which the
Administrative Agent is open for the transaction of its banking
business at such offices immediately preceding the day on which any
such judgment, or any relevant part thereof, is paid or otherwise
satisfied.
(b) The obligation of each Borrower in respect of any sum
due in the Original Currency from it to the Lenders hereunder or under
any security in respect of the Borrowers' obligation hereunder shall,
notwithstanding any judgment in any Other Currency, be discharged only
to the extent that on the Business Day following receipt by the Agents
of any sum adjudged to be so due in such Other Currency or of any other
sum in any Other Currency the Agents may, in accordance with their
normal banking procedures, purchase the Original Currency with such
Other Currency. If the amount of the Original Currency so purchased is
less than the sum originally due to the Lenders in the Original
Currency, the Borrowers shall, as a separate obligation and
notwithstanding any such judgment, indemnify the Agents against such
loss, and if the amount of the Original Currency so purchased exceeds
the sum originally due to the Lenders, the Agents shall remit such
excess to the Borrowers.
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14.20 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrowers, the
Administrative Agent, the Canadian Agent and the Lenders hereby agree that all
agreements among them under this Credit Agreement and the other Credit
Documents, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no contingency or event whatsoever shall
the amount paid, or agreed to be paid, to the Administrative Agent or any Lender
for the use, forbearance, or detention of the money loaned to any Borrower and
evidenced hereby or thereby or for the performance or payment of any covenant or
obligation contained herein or therein (including, in relation to any amount
payable hereunder by any Canadian Borrower or to any Canadian Lender, any amount
constituting "interest" for purposes of section 347 of the Criminal Code
(Canada) or any successor provision in force at the relevant time, and
references in this Section 14.20 shall be read accordingly), exceed the Highest
Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the applicable
Borrower. All sums paid or agreed to be paid to the Administrative Agent, the
Canadian Agent or any Lender for the use, forbearance, or detention of the
Obligations and other indebtedness of the Borrowers to the Administrative Agent,
the Canadian Agent or any Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual rate of interest on
account of all such indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such indebtedness. The terms and provisions of
this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrowers, the Administrative Agent, the Canadian Agent
and the Lenders.
14.21 CONCERNING JOINT AND SEVERAL LIABILITY OF THE U.S. BORROWERS.
(a) Each of the U.S. Borrowers is accepting joint and
several liability hereunder in consideration of the financial
accommodation to be provided by the Lenders under this Credit
Agreement, for the mutual benefit, directly and indirectly, of each of
the U.S. Borrowers and in consideration of the undertakings of each of
the U.S. Borrowers to accept joint and several liability for the
obligations of each of them.
(b) Each of the U.S. Borrowers jointly and severally
hereby irrevocably and unconditionally accepts, not merely as a surety
but also as a co-debtor, joint and several liability with the other
U.S. Borrowers with respect to the payment and performance of all of
the Obligations, it being the intention of the parties hereto that all
the Obligations shall
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be the joint and several obligations of each of the U.S. Borrowers
without preferences or distinction among them.
(c) If and to the extent that any of the U.S. Borrowers
shall fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event, the other U.S. Borrowers
will make such payment with respect to, or perform, such Obligation.
(d) The obligations of each U.S. Borrower under the
provisions of this Section 14.21 constitute full recourse obligations
of such U.S. Borrower, enforceable against it to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Credit Agreement or any other circumstances
whatsoever.
(e) Except as otherwise expressly provided herein or in
the other Credit Documents, each U.S. Borrower hereby waives notice of
acceptance of its joint and several liability, notice of any Loan made
under this Credit Agreement, notice of occurrence of any Event of
Default, or of any demand for any payment under this Credit Agreement,
notice of any action at any time taken or omitted by any Lender under
or in respect of any of the Obligations, any requirement of diligence
and, generally, all demands, notices and other formalities of every
kind in connection with this Credit Agreement. Each U.S. Borrower
hereby assents to, and waives notice of, any extension or postponement
of the time for the payment of any of the Obligations, the acceptance
of any partial payment thereon, any waiver, consent or other action or
acquiescence by any Lender at any time or times in respect of any
default by any U.S. Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Credit Agreement, any
and all other indulgences whatsoever by any Lender in respect of any of
the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or in part, at any time or times, of any security for any
of the Obligations or the addition, substitution or release, in whole
or in part, of any U.S. Borrower. Without limiting the generality of
the foregoing, each U.S. Borrower assents to any other action or delay
in acting or failure to act on the part of any Lender, including,
without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with the applicable
laws or regulations thereunder which might, but for the provisions of
this Section 14.21, afford grounds for terminating, discharging or
relieving such U.S. Borrower, in whole or in part, from any of its
obligations under this Section 14.21, it being the intention of each
U.S. Borrower that, so long as any of the Obligations remain
unsatisfied, the obligations of such U.S. Borrower under this Section
14.21 shall not be discharged except by performance and then only to
the extent of such performance. The Obligations of each U.S. Borrower
under this Section 14.21 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
U.S. Borrower or any Lender. The joint and several liability of the
U.S. Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place of
formation of any Borrower or any Lender.
130
(f) The provisions of this Section 14.21 are made for the
benefit of the Lenders and their respective successors and assigns, and
may be enforced by any such Person from time to time against any of the
U.S. Borrowers as often as occasion therefor may arise and without
requirement on the part of any Lender first to marshal any of its
claims or to exercise any of its rights against any of the other U.S.
Borrowers or to exhaust any remedies available to it against any of the
other U.S. Borrowers or to resort to any other source or means of
obtaining payment of any of the Obligations or to elect any other
remedy. The provisions of this Section 14.21 shall remain in effect
until all the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made
in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by any Lender upon the insolvency, bankruptcy or
reorganization of any of the U.S. Borrowers, or otherwise, the
provisions of this Section 14.21 will forthwith be reinstated in
effect, as though such payment had not been made.
(g) Notwithstanding any provision to the contrary
contained herein or in any other of the Credit Documents, to the extent
the joint obligations of a U.S. Borrower shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of each U.S. Borrower
hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the U.S. federal Bankruptcy Code).
(h) The U.S. Borrowers hereby agree, as among themselves,
that if any U.S. Borrower shall become an Excess Funding Borrower (as
defined below), each other U.S. Borrower shall, on demand of such
Excess Funding Borrower (but subject to the next sentence hereof and to
subsection (B) below), pay to such Excess Funding Borrower an amount
equal to such U.S. Borrower's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties,
assets, liabilities and debts of such Excess Funding Borrower) of such
Excess Payment (as defined below). The payment obligation of any U.S.
Borrower to any Excess Funding Borrower under this Section 14.21(h)
shall be subordinate and subject in right of payment to the prior
payment in full of the Obligations of such U.S. Borrower under the
other provisions of this Credit Agreement, and such Excess Funding
Borrower shall not exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of such
Obligations. For purposes hereof, (i) "Excess Funding Borrower" shall
mean, in respect of any Obligations arising under the other provisions
of this Credit Agreement (hereafter, the "Joint Obligations"), a U.S.
Borrower that has paid an amount in excess of its Pro Rata Share of the
Joint Obligations; (ii) "Excess Payment" shall mean, in respect of any
Joint Obligations, the amount paid by an Excess Funding Borrower in
excess of its Pro Rata Share of such Joint Obligations; and (iii) "Pro
Rata Share", for the purposes of this Section 14.21(h), shall mean, for
any U.S. Borrower, the ratio (expressed as a percentage) of (A) the
amount by which the aggregate present fair salable value of all of its
assets and properties exceeds the amount of all debts and liabilities
of such U.S. Borrower (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such
U.S. Borrower hereunder) to (B) the amount by which
131
the aggregate present fair salable value of all assets and other
properties of such U.S. Borrower and all of the other U.S. Borrowers
exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such U.S. Borrower and the other U.S.
Borrowers hereunder) of such U.S. Borrower and all of the other U.S.
Borrowers, all as of the Closing Date (if any U.S. Borrower becomes a
party hereto subsequent to the Closing Date, then for the purposes of
this Section 14.21(h) such subsequent U.S. Borrower shall be deemed to
have been a U.S. Borrower as of the Closing Date and the information
pertaining to, and only pertaining to, such U.S. Borrower as of the
date such U.S. Borrower became a U.S. Borrower shall be deemed true as
of the Closing Date).
14.22 CONCERNING JOINT AND SEVERAL LIABILITY OF THE CANADIAN
BORROWERS.
(a) Each of the Canadian Borrowers is accepting joint and
several liability hereunder in consideration of the financial
accommodation to be provided by the Lenders under this Credit
Agreement, for the mutual benefit, directly and indirectly, of each of
the Canadian Borrowers and in consideration of the undertakings of each
of the Canadian Borrowers to accept joint and several liability for the
obligations of each of them.
(b) Each of the Canadian Borrowers jointly and severally
hereby irrevocably and unconditionally accepts, not merely as a surety
but also as a co-debtor, joint and several liability with the other
Canadian Borrowers with respect to the payment and performance of all
of the Canadian Obligations, it being the intention of the parties
hereto that all the Canadian Obligations shall be the joint and several
obligations of each of the Canadian Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of the Canadian
Borrowers shall fail to make any payment with respect to any of the
Canadian Obligations as and when due or to perform any of the Canadian
Obligations in accordance with the terms thereof, then in each such
event, the other Canadian Borrowers will make such payment with respect
to, or perform, such Canadian Obligation.
(d) The obligations of each Canadian Borrower under the
provisions of this Section 14.22 constitute full recourse obligations
of such Canadian Borrower, enforceable against it to the full extent of
its properties and assets, irrespective of the validity, regularity or
enforceability of this Credit Agreement or any other circumstances
whatsoever.
(e) Except as otherwise expressly provided herein or in
the other Credit Documents, each Canadian Borrower hereby waives notice
of acceptance of its joint and several liability, notice of any Loan
made under this Credit Agreement, notice of occurrence of any Event of
Default, or of any demand for any payment under this Credit Agreement,
notice of any action at any time taken or omitted by any Lender under
or in respect of any of the Canadian Obligations, any requirement of
diligence and, generally, all demands, notices and other formalities of
every kind in connection with this Credit Agreement. Each Canadian
Borrower hereby assents to, and waives notice of, any
132
extension or postponement of the time for the payment of any of the
Canadian Obligations, the acceptance of any partial payment thereon,
any waiver, consent or other action or acquiescence by any Lender at
any time or times in respect of any default by any Canadian Borrower in
the performance or satisfaction of any term, covenant, condition or
provision of this Credit Agreement, any and all other indulgences
whatsoever by any Lender in respect of any of the Canadian Obligations,
and the taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of the Canadian
Obligations or in part, at any time or times, of any security for any
of the Canadian Obligations or the addition, substitution or release,
in whole or in part, of any Canadian Borrower. Without limiting the
generality of the foregoing, each Canadian Borrower assents to any
other action or delay in acting or failure to act on the part of any
Lender, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply
fully with the applicable laws or regulations thereunder which might,
but for the provisions of this Section 14.22, afford grounds for
terminating, discharging or relieving such Canadian Borrower, in whole
or in part, from any of its obligations under this Section 14.22, it
being the intention of each Canadian Borrower that, so long as any of
the Canadian Obligations remain unsatisfied, the obligations of such
Canadian Borrower under this Section 14.22 shall not be discharged
except by performance and then only to the extent of such performance.
The Canadian Obligations of each Canadian Borrower under this Section
14.22 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Canadian Borrower or any Lender. The
joint and several liability of the Canadian Borrowers hereunder shall
continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Borrower or any
Lender.
(f) The provisions of this Section 14.22 are made for the
benefit of the Lenders and their respective successors and assigns, and
may be enforced by any such Person from time to time against any of the
Canadian Borrowers as often as occasion therefor may arise and without
requirement on the part of any Lender first to marshal any of its
claims or to exercise any of its rights against any of the other
Canadian Borrowers or to exhaust any remedies available to it against
any of the other Canadian Borrowers or to resort to any other source or
means of obtaining payment of any of the Canadian Obligations or to
elect any other remedy. The provisions of this Section 14.22 shall
remain in effect until all the Canadian Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment,
or any part thereof, made in respect of any of the Canadian
Obligations, is rescinded or must otherwise be restored or returned by
any Lender upon the insolvency, bankruptcy or reorganization of any of
the Canadian Borrowers, or otherwise, the provisions of this Section
14.22 will forthwith be reinstated in effect, as though such payment
had not been made.
(g) Notwithstanding any provision to the contrary
contained herein or in any other of the Credit Documents, to the extent
the joint obligations of a Canadian Borrower shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation,
because of any applicable federal, state or provincial law relating to
fraudulent
133
conveyances or transfers or financial assistance) then the obligations
of each Canadian Borrower hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal, state
or provincial and including, without limitation, the U.S. federal
Bankruptcy Code, or Canadian or provincial).
(h) The Canadian Borrowers hereby agree, as among
themselves, that if any Canadian Borrower shall become an Excess
Funding Borrower (as defined below), each other Canadian Borrower
shall, on demand of such Excess Funding Borrower (but subject to the
next sentence hereof and to subsection (B) below), pay to such Excess
Funding Borrower an amount equal to such Canadian Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without
reference to the properties, assets, liabilities and debts of such
Excess Funding Borrower) of such Excess Payment (as defined below). The
payment obligation of any Canadian Borrower to any Excess Funding
Borrower under this Section 14.22(h) shall be subordinate and subject
in right of payment to the prior payment in full of the Canadian
Obligations of such Canadian Borrower under the other provisions of
this Credit Agreement, and such Excess Funding Borrower shall not
exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all of such Canadian Obligations. For
purposes hereof, (i) "Excess Funding Borrower" shall mean, in respect
of any Canadian Obligations arising under the other provisions of this
Credit Agreement (hereafter, the "Joint Canadian Obligations"), a
Canadian Borrower that has paid an amount in excess of its Pro Rata
Share of the Joint Canadian Obligations; (ii) "Excess Payment" shall
mean, in respect of any Joint Canadian Obligations, the amount paid by
an Excess Funding Borrower in excess of its Pro Rata Share of such
Joint Canadian Obligations; and (iii) "Pro Rata Share", for the
purposes of this Section 14.22(h), shall mean, for any Canadian
Borrower, the ratio (expressed as a percentage) of (A) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such
Canadian Borrower (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of such
Canadian Borrower hereunder) to (B) the amount by which the aggregate
present fair salable value of all assets and other properties of such
Canadian Borrower and all of the other Canadian Borrowers exceeds the
amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Canadian Borrower and the other Canadian
Borrowers hereunder) of such Canadian Borrower and all of the other
Canadian Borrowers, all as of the Closing Date (if any Canadian
Borrower becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 14.22(h) such subsequent Canadian
Borrower shall be deemed to have been a Canadian Borrower as of the
Closing Date and the information pertaining to, and only pertaining to,
such Canadian Borrower as of the date such Canadian Borrower became a
Canadian Borrower shall be deemed true as of the Closing Date).
14.23 NONLIABILITY OF AGENTS AND LENDERS.
The relationship between any Borrower on the one hand and the Lenders
and the Agents on the other hand shall be solely that of borrower and lender.
Neither the Agents nor any Lender shall have any fiduciary responsibilities to
any Borrower. Neither the Agents nor any Lender
134
undertakes any responsibility to any Borrower to review or inform such Borrower
of any matter in connection with any phase of such Borrower's business or
operations.
14.24 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.25 POWER OF ATTORNEY.
Each Subsidiary Borrower hereby agrees that by its execution of this
Agreement, such Subsidiary Borrower appoints each of Xxxxxx X. Xxxxxxx, Xx..
Senior Vice President Fabricated Products and General Counsel, Xxxxxx Xxxxxxxx,
Chief Executive Officer, President and Chairman, and Xxxxx X. Xxxxxx, Executive
Vice President, Chief Financial Officer and Secretary, Xxx Xxxxxxxxx,
Controller, Xxxxxxx X. Xxxxxx, Canadian Controller, to be its attorneys ("its
Attorneys") and in its name and on its behalf and as its act and deed or
otherwise to sign all documents and carry out all such acts as are necessary or
appropriate in connection with executing any Notice of Borrowing, Notice of
Extension/Conversion or any Borrowing Base Certificate or any security documents
(the "Documents") in connection with this Agreement or any other Credit
Document. This Power of Attorney shall be valid for the duration of the term of
this Agreement; provided, however, the above referenced persons may be replaced
upon written notice by the Borrower to the Administrative Agent. Each Subsidiary
Borrower hereby undertakes to ratify everything which either of its Attorneys
shall do in order to execute the Documents mentioned herein.
14.26 CHOICE OF LANGUAGE.
The parties hereto confirm that they have requested that this Agreement
and all documents relating thereto be drafted in English. Les parties aux
presentes ont exige que cette convention ainsi que tout document connexe soient
rediges en anglais.
[Remainder of page intentionally left blank]
135
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
COMPANY:
WOLVERINE TUBE, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President,
Chief Financial Officer and
Secretary
U.S. SUBSIDIARY BORROWERS:
TF INVESTOR, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
TUBE FORMING HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, Chief Financial
Officer and Secretary
TUBE FORMING, L.P.
By: Tube Forming Holdings, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, Chief
Financial Officer and
Secretary
WOLVERINE FINANCE COMPANY
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
STPC HOLDING, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
S-ii
SMALL TUBE MANUFACTURING CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
WOLVERINE JOINING TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
WOLVERINE CHINA INVESTMENTS, LLC
By: Wolverine Tube, Inc.,
its Managing Manager
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President,
Chief Financial Officer and Secretary
S-iii
CANADIAN BORROWERS:
1105836 ONTARIO INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Secretary
WOLVERINE JOINING TECHNOLOGIES
(CANADA) INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
CANADIAN SUBSIDIARY BORROWERS:
1263143 ONTARIO INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Secretary
1158909 ONTARIO INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Secretary
WOLVERINE TUBE (CANADA) INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive Officer
--------------------------------------
S-iv
LENDERS:
WACHOVIA BANK, N.A., in its capacity
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Galliano
-------------------------------------
Name: Xxxxxx X. Galliano
-----------------------------------
Title: Vice President
----------------------------------
S-v
CONGRESS FINANCIAL CORPORATION
(CANADA),
in its capacity as Canadian Agent and as a Lender
By: /s/ X. Xxxxxxxxx
----------------------------------------------
Name: X. Xxxxxxxxx
--------------------------------------------
Title: Senior Vice President
-------------------------------------------
S-vi
