EXHIBIT 10.1.1
________________________________________________________________________________
________________________________________________________________________________
$155,000,000
CREDIT AND GUARANTEE AGREEMENT
among
SMTC CORPORATION,
as Guarantor
HTM HOLDINGS, INC.,
and
THE SURFACE MOUNT TECHNOLOGY CENTRE, INC.,
as Borrowers,
The Several Lenders
from Time to Time Parties Hereto,
XXXXXX BROTHERS INC.,
as Arranger
THE BANK OF NOVA SCOTIA,
as Syndication Agent and
Canadian Administrative Agent
XXXXXX COMMERCIAL PAPER INC.,
as General Administrative Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent
and
XXXXXX COMMERCIAL PAPER INC.,
as Collateral Monitoring Agent
Dated as of July 28, 1999
________________________________________________________________________________
________________________________________________________________________________
TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS............................................................................. 1
1.1 Defined Terms............................................................................. 1
1.2 Other Definitional Provisions............................................................. 42
SECTION 2. AMOUNT AND TERMS OF U.S. FACILITIES COMMITMENTS......................................... 43
2.1 U.S. Term Loan Commitments................................................................ 43
2.2 Procedure for U.S. Term Loan Borrowing.................................................... 43
2.3 Repayment of U.S. Term Loans.............................................................. 43
2.4 U.S. Revolving Credit Commitments......................................................... 45
2.5 Procedure for U.S. Revolving Credit Borrowing............................................. 45
2.6 Swing Line Commitment..................................................................... 46
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans......................... 46
2.8 Promise to Pay U.S. Facility Loans; Evidence of Debt...................................... 48
2.9 Commitment Fees, etc...................................................................... 49
2.10 Termination or Reduction of U.S. Revolving Credit Commitments;........................... 49
SECTION 3. AMOUNT AND TERMS OF CANADIAN TERM LOAN COMMITMENTS...................................... 49
3.1 Canadian Term Loan Commitments............................................................ 49
3.2 Procedure for Canadian Term Loan Borrowing................................................ 50
3.3 Repayment of Canadian Term Loans.......................................................... 50
3.4 Promise to Pay Canadian Term Loans; Evidence of Debt...................................... 50
SECTION 4. [RESERVED].............................................................................. 51
SECTION 5. AMOUNT AND TERMS OF THE CANADIAN REVOLVING CREDIT COMMITMENTS; ACCEPTANCES.............. 52
5.1 Canadian Revolving Credit Commitments..................................................... 52
5.2 Procedure for Canadian Revolving Credit Borrowing......................................... 52
5.3 Repayment of Canadian Revolving Credit Loans; Evidence of Debt............................ 53
5.4 Termination or Reduction of Canadian Revolving Credit Commitments......................... 54
5.5 Commitment Fees........................................................................... 54
5.6 Acceptance Commitments.................................................................... 54
5.7 Creation of Acceptances................................................................... 55
5.8 Discount of Acceptances................................................................... 56
5.9 Stamping Fees............................................................................. 56
5.10 Acceptance Reimbursement Obligations..................................................... 57
5.11 Converting Canadian Revolving Credit Loans to Acceptances and Acceptances to
Canadian Revolving Credit Loans.......................................................... 58
5.12 Allocation of Acceptances................................................................ 59
5.13 Special Provisions Relating to Acceptance Notes.......................................... 60
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SECTION 6. LETTERS OF CREDIT................................................................................ 60
6.1 L/C Commitments...................................................................................... 60
6.2 Procedure for Issuance of Letters of Credit ......................................................... 61
6.3 Fees and Other Charges............................................................................... 62
6.4 L/C Participations................................................................................... 62
6.5 Reimbursement Obligation of the Borrowers............................................................ 63
6.6 Obligations Absolute................................................................................. 64
6.7 Letter of Credit Payments ........................................................................... 64
6.8 Applications......................................................................................... 65
SECTION 7. GENERAL PROVISIONS APPLICABLE TO THE FACILITIES.................................................. 65
7.1 Interest Rates and Payment Dates..................................................................... 65
7.2 Conversion and Continuation Options With Respect to Loans............................................ 65
7.3 Minimum Amounts of Tranches.......................................................................... 67
7.4 Optional Prepayments ................................................................................ 67
7.5 Mandatory Prepayments and Commitment Reductions; Application of Prepayments.......................... 68
7.6 Certain Fees......................................................................................... 72
7.7 Computation of Interest and Fees..................................................................... 72
7.8 Inability to Determine Interest Rate................................................................. 73
7.9 Pro Rata Treatment and Payments...................................................................... 74
7.10 Illegality.......................................................................................... 76
7.11 Requirements of Law................................................................................. 77
7.12 Indemnity........................................................................................... 78
7.13 Taxes............................................................................................... 78
7.14 Use of Proceeds..................................................................................... 80
7.15 Change of Lending Office............................................................................ 80
7.16 Replacement of Lenders under Certain Circumstances.................................................. 81
SECTION 8. REPRESENTATIONS AND WARRANTIES................................................................... 81
8.1 Financial Condition ................................................................................. 82
8.2 No Change............................................................................................ 83
8.3 Corporate Existence; Compliance with Law............................................................. 83
8.4 Corporate Power; Authorization; Enforceable Obligations.............................................. 83
8.5 No Legal Bar......................................................................................... 84
8.6 No Material Litigation .............................................................................. 84
8.7 No Default........................................................................................... 84
8.8 Ownership of Property; Liens......................................................................... 84
8.9 Intellectual Property................................................................................ 84
8.10 Taxes............................................................................................... 85
8.11 Federal Regulations................................................................................. 85
8.12 Labor Matters....................................................................................... 85
8.13 ERISA............................................................................................... 85
8.14 Investment Company Act; Other Regulations........................................................... 86
8.15 Subsidiaries........................................................................................ 86
8.16 Use of Proceeds..................................................................................... 86
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8.17 Environmental Matters............................................................................ 86
8.18 Accuracy of Information, etc..................................................................... 87
8.19 Security Documents............................................................................... 88
8.20 Solvency......................................................................................... 89
8.21 Year 2000 Matters................................................................................ 89
SECTION 9. CONDITIONS PRECEDENT............................................................................ 89
9.1 Conditions to Initial Extension of Credit......................................................... 89
9.2 Conditions to Each Extension of Credit ........................................................... 92
SECTION 10. AFFIRMATIVE COVENANTS.......................................................................... 93
10.1 Financial Statements............................................................................. 93
10.2 Certificates; Other Information.................................................................. 94
10.3 Collateral Reports............................................................................... 95
10.4 Payment of Obligations........................................................................... 96
10.5 Conduct of Business and Maintenance of Existence, etc............................................ 96
10.6 Maintenance of Property; Insurance............................................................... 96
10.7 Inspection of Property; Books and Records; Discussions........................................... 96
10.8 Notices.......................................................................................... 96
10.9 Environmental Laws............................................................................... 97
10.10 Interest Rate Protection........................................................................ 97
10.11 Additional Collateral, etc...................................................................... 98
10.12 Further Assurances.............................................................................. 100
SECTION 11. NEGATIVE COVENANTS............................................................................. 101
11.1 Financial Condition Covenants.................................................................... 101
11.2 Limitation on Indebtedness....................................................................... 103
11.3 Limitation on Liens.............................................................................. 105
11.4 Limitation on Fundamental Changes................................................................ 107
11.5 Limitation on Disposition of Property............................................................ 108
11.6 Limitation on Restricted Payments................................................................ 109
11.7 Limitation on Capital Expenditures............................................................... 110
11.8 Limitation on Investments........................................................................ 111
11.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc....................... 112
11.10 Limitation on Transactions with Affiliates...................................................... 113
11.11 Limitation on Sales and Leasebacks.............................................................. 113
11.12 Limitation on Changes in Fiscal Periods......................................................... 114
11.13 Limitation on Negative Pledge Clauses........................................................... 114
11.14 Limitation on Restrictions on Subsidiary Distributions.......................................... 114
11.15 Limitation on Lines of Business................................................................. 115
11.16 Limitation on Activities of Holdings............................................................ 115
11.17 Limitation on Hedge Agreements.................................................................. 115
SECTION 12. GUARANTEE...................................................................................... 116
12.1 Guarantee........................................................................................ 116
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12.2 No Subrogation................................................................................ 116
12.3 Amendments, etc. with respect to the Canadian Borrower Obligations; Waiver of Rights.......... 117
12.4 Guarantee Absolute and Unconditional.......................................................... 117
12.5 Reinstatement................................................................................. 118
12.6 Payments...................................................................................... 119
SECTION 13. EVENTS OF DEFAULT........................................................................... 119
SECTION 14. THE AGENTS; THE ARRANGER.................................................................... 123
14.1 Appointment................................................................................... 123
14.2 Delegation of Duties ......................................................................... 123
14.3 Exculpatory Provisions........................................................................ 123
14.4 Reliance by Agents............................................................................ 124
14.5 Notice of Default............................................................................. 124
14.6 Non-Reliance on Agents and Other Lender....................................................... 124
14.7 Indemnification............................................................................... 125
14.8 Agents in their Individual Capacity........................................................... 125
14.9 Successor Agents.............................................................................. 125
14.10 The Documentation Agent, the Arranger and the Syndication Agents............................. 126
14.11 Authorization to Release Liens and Guarantees ............................................... 126
SECTION 15. MISCELLANEOUS............................................................................... 126
15.1 Amendments and Waivers........................................................................ 126
15.2 Notices....................................................................................... 128
15.3 No Waiver; Cumulative Remedies ............................................................... 129
15.4 Survival of Representations and Warranties.................................................... 130
15.5 Payment of Expenses .......................................................................... 130
15.6 Successors and Assigns; Participations and Assignments........................................ 131
15.7 Adjustments; Set-off ......................................................................... 133
15.8 Counterparts.................................................................................. 134
15.9 Severability.................................................................................. 134
15.10 Integration.................................................................................. 135
15.11 GOVERNING LAW................................................................................ 135
15.12 Submission To Jurisdiction; Waivers.......................................................... 135
15.13 Acknowledgments.............................................................................. 135
15.14 Confidentiality.............................................................................. 136
15.15 Release of Collateral and Guarantee Obligations.............................................. 136
15.16 Accounting Changes........................................................................... 137
15.17 Delivery of Lender Addenda................................................................... 137
15.18 Intercreditor Provisions..................................................................... 137
15.19 WAIVERS OF JURY TRIAL........................................................................ 139
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ANNEXES:
A Pricing Grid
SCHEDULES:
1.1 Certain Inventory Locations
1.2 Canadian Security Documents; Canadian Facility Guarantees
6.1 Existing Letter of Credit
8.4 Consents, Authorizations, Filings and Notices
8.6 Litigation
8.15 Subsidiaries
8.19(a)-1 U.S. UCC Filing Jurisdictions
8.19(a)-2 U.S. UCC Financing Statements to Remain on File
8.19(a)-3 U.S. UCC Financing Statements to be Terminated
8.19(b)-1 Canadian Filing Jurisdictions
8.19(b)-2 Canadian Filings to Remain on File
8.19(b)-3 Canadian Filings to be Terminated
11.2(d) Existing Indebtedness
11.3(f) Existing Liens
11.8 Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B-1 Form of Compliance Certificate
B-2 Form of Borrowing Base Certificate
C Form of Closing Certificate
D [Reserved]
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Ropes & Xxxx
F-2 Form of Legal Opinion of Canadian Counsel
G-1 Form of U.S. Term Note
G-2 Form of U.S. Revolving Credit Note
G-3 Form of Swing Line Note
G-4 Form of Canadian Term Note
G-5 Form of Canadian Revolving Credit Note
H Form of Draft
I Form of Power of Attorney
J Form of Acceptance Note
K Form of Prepayment Option Notice
L Form of Exemption Certificate
M Form of Lender Addendum
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CREDIT AND GUARANTEE AGREEMENT, dated as of July 28, 1999, among SMTC
CORPORATION, a Delaware corporation ("Holdings"), HTM HOLDINGS, INC., a Delaware
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corporation (the "U.S. Borrower"), THE SURFACE MOUNT TECHNOLOGY CENTRE, INC., a
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corporation organized under the laws of the Province of Ontario, Canada (the
"Canadian Borrower"; together with the U.S. Borrower, the "Borrowers"), the
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several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), XXXXXX BROTHERS INC., as advisor,
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lead arranger and book manager (in such capacity, the "Arranger"), THE BANK OF
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NOVA SCOTIA, as syndication agent (in such capacity, the "Syndication Agent"),
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XXXXXX COMMERCIAL PAPER INC., as general administrative agent (in such capacity,
as hereinafter defined, the "General Administrative Agent"), THE BANK OF NOVA
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SCOTIA, as Canadian administrative agent (in such capacity, as hereinafter
defined, the "Canadian Administrative Agent"), XXXXXX COMMERCIAL PAPER INC., as
collateral monitoring agent (in such capacity, as hereinafter defined, the
"Collateral Monitoring Agent") and GENERAL ELECTRIC CAPITAL CORPORATION, as
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documentation agent (in such capacity, the "Documentation Agent").
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Holdings, the Canadian Borrower, the U.S. Borrower and
certain of their respective affiliates, intend to enter into a series of
transactions (as more particularly defined below, the "Transactions") after
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which Holdings will hold, directly or indirectly, all of the Capital Stock of
the Borrowers;
WHEREAS, in connection with the Transactions, the Borrowers have
requested that the Lenders make available credit facilities in the aggregate
amount of U.S.$155,000,000 (including a portion of such credit facilities to be
made available in Canadian Dollars); and
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
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this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Acceptance": a Draft drawn by the Canadian Borrower and accepted by
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a Canadian Revolving Credit Lender which is (a) denominated in Canadian
Dollars, (b) for a term of approximately 30, 60, 90 or 180 days and which
matures prior to the Canadian Revolving Credit Termination Date and (c)
issuable and payable only in Canada; provided that to the extent the
context shall require, each Acceptance Note shall be deemed to be an
Acceptance; provided, further, that "Acceptance" includes a depository note
-------- ------- ----------
within the
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meaning of the Depository Bills and Notes Act (Canada) and a xxxx of
exchange within the meaning of the Bills of Exchange Act (Canada).
"Acceptance Note": as defined in Section 5.13(b).
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"Acceptance Purchase Price": in respect of an Acceptance of a
-------------------------
specified maturity, the result (rounded to the nearest whole cent, and with
one-half cent being rounded up) obtained by dividing (a) the face amount of
such Acceptance by (b) the sum of (i) one and (ii) the product of (A) the
Reference Discount Rate for Acceptances of the same maturity expressed as a
decimal and (B) a fraction, the numerator of which is the term to maturity
of such Acceptance and the denominator of which is equal to 365, where (b)
above is rounded to the fifth decimal place and 0.000005 is rounded up to
0.00001.
"Acceptance Reimbursement Obligations": the obligation of the
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Canadian Borrower to the Canadian Revolving Credit Lenders (a) to reimburse
such Lenders for maturing Acceptances pursuant to Section 5.10 and (b) to
make payments in respect of Acceptance Notes in accordance with the terms
thereof.
"Acceptance Tranche": the collective reference to Acceptances, all of
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which were created on the same date and have the same maturity date.
"Accounts": as to any Person, all rights to receive payment for goods
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sold or leased by such Person or for services rendered in the ordinary
course of business of such Person to the extent not evidenced by an
instrument or chattel paper, including any rights in, to and under all
purchase orders or receipts now owned or hereafter acquired for goods and
services, and all collateral security and guarantees with respect to any of
the foregoing.
"Acquisition Subordinated Debt": unsecured Indebtedness of Holdings
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that (a) is not guaranteed by any Subsidiary of Holdings, (b) provides for
no payment of principal prior to the date which is 90 days after the final
maturity date of the Loans, (c) so long as the Consolidated Interest
Coverage Ratio (determined on a pro forma basis for the related Permitted
--- -----
Acquisition in the manner described in Section 11.1) is less than or equal
to 3.50 to 1.00, does not provide for payment of interest in cash prior to
the date which is 90 days after the final maturity date of the Loans, (d)
is used to finance, in whole or in part, a Permitted Acquisition and (e)
has subordination terms, covenants, events of default, defaults and other
terms and conditions reasonably acceptable to the General Administrative
Agent.
"Adjustment Date": as defined in the Pricing Grid.
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"Administrative Agents": the collective reference to the General
---------------------
Administrative Agent and the Canadian Administrative Agent.
3
"Advance Rate": (i) with respect to Eligible Accounts, 85%, (ii) with
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respect to Eligible Inventory (other than Mexican Inventory), valued on a
first-in, first-out basis (at the lower of cost or market), 65% and (iii)
with respect to Mexican Inventory, valued on a first-in, first-out basis
(at the lower of cost or market), 40%.
"Affiliate": as to any Person, any other Person that, directly or
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indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, to direct or cause the direction
of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent, the
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Documentation Agent, the Collateral Monitoring Agent and the Administrative
Agents, which term shall include, for purposes of Section 14 only, each
Issuing Lender.
"Aggregate Available Canadian Revolving Credit Commitments": as at
---------------------------------------------------------
any date of determination with respect to all Canadian Revolving Credit
Lenders, the U.S. Dollar Equivalent of the Available Canadian Revolving
Credit Commitments of all Canadian Revolving Credit Lenders on such date.
"Aggregate Available U.S. Revolving Credit Commitments": as at any
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date of determination thereof with respect to all U.S. Revolving Credit
Lenders, an amount in U.S. Dollars equal to the Available U.S. Revolving
Credit Commitments of all U.S. Revolving Credit Lenders on such date.
"Aggregate Canadian Outstandings": as at any date of determination
-------------------------------
thereof with respect to any Canadian Lender, the U.S. Dollar Equivalent of
an amount equal to the sum of (a) the Aggregate Canadian Term Loan
Outstandings of such Lender plus (b) the aggregate amount of the Canadian
Revolving Extensions of Credit of such Lender.
"Aggregate Canadian Revolving Extensions of Credit": as at any date
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of determination with respect to all Canadian Revolving Credit Lenders, an
amount equal to the U.S. Dollar Equivalent of the Canadian Revolving
Extensions of Credit of all Canadian Revolving Credit Lenders.
"Aggregate Canadian Term Loan Outstandings": as at any date with
-----------------------------------------
respect to any Canadian Term Loan Lender, the aggregate outstanding
principal amount of Canadian Term Loans of such Lender.
"Aggregate Exposure Percentage" with respect to any Lender at any
-----------------------------
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Total Outstandings at such time to the sum of the Aggregate Total
Outstandings of all Lenders at such time.
"Aggregate Total Outstandings": as at any date of determination with
----------------------------
respect to any Lender, an amount in U.S. Dollars equal to the sum of (a)
the Aggregate U.S.
4
Outstandings of such Lender, plus (b) the Aggregate Canadian Outstandings
of such Lender.
"Aggregate U.S. Outstandings": as at any date of determination with
---------------------------
respect to any Lender, an amount in U.S. Dollars equal to the sum of (a)
the Aggregate U.S. Revolving Extensions of Credit of such Lender on such
date and (b) the aggregate unpaid principal amount of such U.S. Lender's
Term Loans on such date.
"Aggregate U.S. Revolving Extensions Credit": as at any date of
------------------------------------------
determination with respect to all U.S. Revolving Credit Lenders, an amount
in U.S. Dollars equal to the U.S. Revolving Extensions of Credit of all
U.S. Revolving Credit Lenders.
"Agreement": this Credit and Guarantee Agreement, as amended,
---------
supplemented or otherwise modified from time to time.
"Applicable Margin": (a) for Loans under each U.S. Facility, the
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rate per annum set forth opposite such Facility under the relevant column
heading below:
Eurodollar U.S. Base
Loans Rate Loans
U.S. Revolving Credit Facility
(including Swing Line Loans) 3.00% 1.25%
Tranche A Term Loan Facility 3.00% 1.25%
Tranche B Term Loan Facility 3.50% 1.75%
Tranche C Term Loan Facility 4.75% 3.00%; and
(b) for Loans under each Canadian Facility, the rate per annum set
forth opposite such Facility under the relevant column heading below:
Canadian
Eurodollar Canadian Prime
Rate Base Rate Rate
Loans Loans Loans
Canadian Revolving
Credit Loans 3.00% 1.25% 1.25%
Canadian Term Loans 3.00% 1.25% N/A
provided, that on and after the first Adjustment Date occurring after the
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completion of two full fiscal quarters of Holdings after the Closing Date,
the Applicable Margins with respect to U.S. Revolving Credit Loans, Swing
Line Loans, Tranche A Term Loans, Tranche B Term Loans, Canadian Revolving
Credit Loans and Canadian Term Loans will be determined pursuant to the
Pricing Grid.
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"Application": an application, in such form as the relevant Issuing
-----------
Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.
"Approved Jurisdiction": any Specified Jurisdiction in respect of
---------------------
which the General Administrative Agent has received a legal opinion
reasonably acceptable to the General Administrative Agent to the effect
that the security interest created by the Security Documents in Accounts
owing by account debtors located in such Specified Jurisdiction would be
enforceable in such Specified Jurisdiction in respect of such account
debtors.
"Arranger": as defined in the preamble hereto.
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"Asset Sale": any Disposition of Property or series of related
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Dispositions of Property (excluding any such Disposition permitted by
Section 11.5 (other than (x) clause (e) thereof and (y) clause (i) thereof,
to the extent Section 11.11 requires the proceeds of Dispositions permitted
by Section 11.5(i) to be applied toward prepayment of the Loans and
reduction of the Commitments)) which yields net proceeds to Holdings or any
of its Subsidiaries (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in
excess of U.S.$500,000.
"Assignee": as defined in Section 15.6(c).
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"Assignor": as defined in Section 15.6(c).
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"Available Canadian Revolving Credit Commitment": with respect to any
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Canadian Revolving Credit Lender at any time, an amount in U.S. Dollars
equal to the excess, if any, of (a) such Lender's Canadian Revolving Credit
Commitment then in effect over (b) such Lender's Canadian Revolving
Extensions of Credit then outstanding.
"Available U.S. Revolving Credit Commitment": with respect to any
------------------------------------------
U.S. Revolving Credit Lender at any time, an amount in U.S. Dollars equal
to the excess, if any, of (c) such Lender's U.S. Revolving Credit
Commitment then in effect over (d) such Lender's U.S. Revolving Extensions
of Credit then outstanding; provided, that (i) in calculating any Lender's
(other than the Swing Line Lender's) U.S. Revolving Extensions of Credit
for the purpose of determining such Lender's Available U.S. Revolving
Credit Commitment pursuant to Section 2.9(a), the aggregate principal
amount of Swing Line Loans then outstanding shall be deemed to be zero and
(ii) in calculating the Swing Line Lender's U.S. Revolving Extensions of
Credit for the purpose of determining the Swing Line Lender's Available
U.S. Revolving Credit Commitment pursuant to Section 2.9(a), the Swing Line
Lender's Revolving Extensions of Credit shall be deemed to include the
aggregate principal amount of the Swing Line Loans then outstanding.
"Bank Act (Canada)": the Bank Act (Canada), as amended from time to
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time.
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"Benefitted Lender": as defined in Section 15.7.
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"Board": the Board of Governors of the Federal Reserve System of the
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United States (or any successor).
"Borrowers": as defined in the preamble hereto.
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"Borrowing Base": with respect to either Borrower, on any date of
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determination, the sum (without duplication) of (i) the product of (A) the
aggregate outstanding Eligible Accounts of such Borrower and its
Subsidiaries on such date and (B) the applicable Advance Rate, plus (ii)
the product of (x) the aggregate Eligible Inventory of such Borrower and
its Subsidiaries on such date, and (y) the applicable Advance Rate;
provided, that not more than US$2,000,000 of the Borrowing Base of the U.S.
--------
Borrower may be attributable to Mexican Inventory. The Borrowing Base in
respect of the U.S. Borrower and the Canadian Borrower shall be as set
forth in the most recent Borrowing Base Certificate delivered by such
Borrower absent manifest error; such Borrowing Base so determined shall
remain in effect until the next determination thereof pursuant to this
sentence.
"Borrowing Base Certificate": a borrowing base certificate
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substantially in the form of Exhibit B-2.
"Borrowing Date": any Business Day specified in a notice pursuant to
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Section 2.2, 2.5, 3.2, 5.2 or 5.7 as a date on which a Borrower requests
the Lenders to make Loans hereunder or, with respect to a Request for
Acceptances, the date with respect to which the Canadian Borrower has
requested Canadian Lenders to accept Drafts.
"Business Day": (a) when such term is used in respect of a day on
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which a Loan is to be made to the Canadian Borrower or an Acceptance is to
be created, a payment is to be made in respect of such Loan or Acceptance,
an Exchange Rate is to be set in respect of Canadian Dollars or any other
dealing in Canadian Dollars is to be carried out pursuant to this
Agreement, or any payment or funding is to be made in respect of any
Canadian Facility, such term shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in Toronto, Ontario are authorized
or required by law to close, (b) when such term is used to describe a day
on which a borrowing, payment or interest rate determination is to be made
in respect of a Eurodollar Loan, such day shall be a day which is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market and (c) when such term is used in any context in this
Agreement (including as described in the foregoing clauses (a) and (b)),
such term shall mean a day which, in addition to complying with any
applicable requirements set forth in the foregoing clauses (a) and (b), is
a day other than a Saturday, Sunday or other day on which commercial banks
in New York City are authorized or required by law to close.
7
"Canadian Administrative Agent": The Bank of Nova Scotia, as Canadian
-----------------------------
administrative agent for the Lenders under this Agreement and the other
Loan Documents, and any successor thereto appointed pursuant to Section
14.9.
"Canadian Base Rate": at any day, the higher of (a) the rate of
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interest per annum publicly announced from time to time by the Canadian
Administrative Agent (and in effect on such day) as its reference rate for
U.S. Dollar commercial loans made in Canada, as adjusted automatically from
time to time and without notice to any of the Borrowers upon change by the
Canadian Administrative Agent and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%.
"Canadian Base Rate Loans": all Canadian Facility Loans denominated
------------------------
in U.S. Dollars that are bearing interest at a rate based upon the Canadian
Base Rate.
"Canadian Borrower": as defined in the preamble hereto.
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"Canadian Borrower Obligations": all indebtedness, obligations and
-----------------------------
liabilities of the Canadian Borrower hereunder or under the other Loan
Documents in respect of the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans,
Reimbursement Obligations and Acceptance Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to the Canadian Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) the Canadian Facility
Loans, the Reimbursement Obligations in respect of Canadian Letters of
Credit and Acceptance Reimbursement Obligations, and all other obligations
and liabilities of the Canadian Borrower to any Administrative Agent or to
any Lender (or, in the case of Specified Hedge Agreements, any affiliate of
any Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the
Canadian Letters of Credit, the Acceptances, any Specified Hedge Agreement
or any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to either
Administrative Agent or to any Lender that are required to be paid by the
Canadian Borrower pursuant hereto) or otherwise; provided, that (i)
--------
obligations of the Canadian Borrower or any Subsidiary thereof under any
Specified Hedge Agreement shall be guaranteed hereby and secured pursuant
to the Canadian Security Documents only to the extent that, and for so long
as, the other Canadian Borrower Obligations are so secured and guaranteed
and (ii) any release of Collateral or Guarantors effected in the manner
permitted by this Agreement shall not require the consent of holders of
obligations under Specified Hedge Agreements.
"Canadian Dollar Equivalent": with respect to an amount denominated
--------------------------
in U.S. Dollars the equivalent in Canadian Dollars determined at the
Exchange Rate.
8
"Canadian Dollar Prime Rate": at any day, the greater on such day of
--------------------------
(a) the rate per annum announced by the Canadian Administrative Agent from
time to time (and in effect on such day) as its prime rate for Canadian
Dollar commercial loans made in Canada, as adjusted automatically from time
to time and without notice to any of the Borrowers upon change by the
Canadian Administrative Agent, and (b) 1% above the CDOR Rate from time to
time (and in effect on such day), as advised by the Canadian Administrative
Agent to the Canadian Borrower from time to time pursuant hereto. The
Canadian Dollar Prime Rate is not intended to be the lowest rate of
interest charged by the Canadian Administrative Agent in connection with
extensions of credit in Canadian Dollars to debtors.
"Canadian Dollar Prime Rate Loans": all Canadian Facility Loans
--------------------------------
denominated in Canadian Dollars that are bearing interest at a rate based
upon the Canadian Dollar Prime Rate.
"Canadian Dollars" and "C$": dollars in the lawful currency of
---------------- --
Canada.
"Canadian Entities": the collective reference to the Canadian
-----------------
Borrower, any Subsidiary of Holdings that holds, directly or indirectly,
any Capital Stock of the Canadian Borrower, and any Subsidiary of the
Canadian Borrower or any such Subsidiary.
"Canadian Facilities": the collective reference to the Canadian
-------------------
Revolving Credit Facility and the Canadian Term Loan Facility.
"Canadian Facility Guarantees": the guaranties described on Schedule
----------------------------
1.2.
"Canadian Facility Loans": the collective reference to the Canadian
-----------------------
Term Loans and the Canadian Revolving Credit Loans.
"Canadian Funding Office": the office from time designated by the
-----------------------
Canadian Administrative Agent, by notice to the Canadian Borrower and the
Canadian Lenders, as its funding office.
"Canadian GAAP": generally accepted accounting principle in Canada as
-------------
in effect from time to time except that for purposes of Section 11.1,
Canadian GAAP shall be determined on the basis of such principles in effect
on the date hereof and consistent with those used in the preparation of the
most recent audited financial statements referred to in Section 8.1.
"Canadian Issuing Lender": any Canadian Revolving Credit Lender
-----------------------
selected by the Canadian Borrower, with the consent of such Lender and the
Administrative Agents, to issue Canadian Letters of Credit.
"Canadian L/C Commitment": C$1,000,000.
-----------------------
9
"Canadian L/C Obligations": at any time, an amount equal to the sum
------------------------
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Canadian Letters of Credit and (b) the aggregate amount of
drawings under Canadian Letters of Credit that have not then been
reimbursed pursuant to Section 5.6.
"Canadian L/C Participant": with respect to each Canadian Letter of
------------------------
Credit, each Canadian Revolving Credit Lender other than the Issuing Lender
in respect of such Letter of Credit.
"Canadian Lenders": the collective reference to the Canadian
----------------
Revolving Credit Lenders and the Canadian Term Loan Lenders.
"Canadian Letter of Credit": as defined in Section 6.1.
-------------------------
"Canadian Payment Office": the office from time designated by the
-----------------------
Canadian Administrative Agent, by notice to the Canadian Borrower and the
Canadian Lenders, as its payment office.
"Canadian Reference Lenders": the collective reference to the
--------------------------
Schedule I Canadian Reference Lenders and the Schedule II Canadian
Reference Lenders.
"Canadian Revolving Credit Commitment": as to any Canadian Lender at
------------------------------------
any time, its obligation to make Canadian Revolving Credit Loans to, and/or
create Acceptances and discount Acceptances on behalf of (or, in lieu
thereof, to make loans pursuant to the Acceptance Notes to), the Canadian
Borrower, in an aggregate amount not to exceed at any one time outstanding
the U.S. Dollar amount (or the Canadian Dollar Equivalent thereof, as the
case may be) set forth opposite such Canadian Lender's name under the
heading "Canadian Revolving Credit Commitment" on Schedule I to the Lender
Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender become a party
hereto, as such amount may be reduced from time to time as provided herein.
The original aggregate amount of the Canadian Revolving Credit Commitments
is U.S. $15,000,000.
"Canadian Revolving Credit Commitment Percentage": as to any Canadian
-----------------------------------------------
Lender at any time, the percentage which such Canadian Lender's Canadian
Revolving Credit Commitment then constitutes of the aggregate Canadian
Revolving Credit Commitments (or, if the Canadian Revolving Credit
Commitments have terminated or expired, the percentage which (a) the
Canadian Revolving Extensions of Credit of such Canadian Lender at such
time constitutes of (b) the Canadian Revolving Extensions of Credit of all
Canadian Revolving Credit Lenders at such time).
"Canadian Revolving Credit Facility": as defined in the definition of
----------------------------------
"Facility" in this Section 1.1.
10
"Canadian Revolving Credit Lenders": each Lender that has a Canadian
---------------------------------
Revolving Credit Commitment.
"Canadian Revolving Credit Loan": as defined in subsection 5.1.
------------------------------
"Canadian Revolving Credit Termination Date": the fifth anniversary
------------------------------------------
of the Closing Date.
"Canadian Revolving Extensions of Credit": as to any Canadian
---------------------------------------
Revolving Credit Lender at any time, an amount in U.S. Dollars equal to the
U.S. Dollar Equivalent of the sum of (a) the aggregate principal amount of
all Canadian Revolving Credit Loans made by such Lender then outstanding,
(b) such Lender's Canadian Revolving Credit Percentage of the Canadian L/C
Obligations then outstanding and (c) such Lender's Canadian Revolving
Credit Percentage of the aggregate undiscounted face amount of all
Acceptances then outstanding created by such Canadian Revolving Credit
Lender.
"Canadian Security Documents": the security documents described in
---------------------------
Schedule 1.2.
"Canadian Subsidiary Guarantor": any Subsidiary of the Canadian
----------------------------
Borrower which is a guarantor of the Canadian Borrower Obligations.
"Canadian Term Loan": as defined in Section 3.1.
------------------
"Canadian Term Loan Commitment": as to any Canadian Lender at any
-----------------------------
time, its obligation to make Canadian Term Loans to the Canadian Borrower
in an aggregate amount not to exceed the amount set forth opposite such
Canadian Lender's name under the heading "Canadian Term Loan Commitment" on
Schedule I to the Lender Addendum delivered by such Lender, or, as the case
may be, in the Assignment and Acceptance pursuant to which such Lender
become a party hereto, as such amount may be reduced from time to time as
provided herein. The original aggregate principal amount of the Canadian
Term Loan Commitments is U.S. $15,000,000.
"Canadian Term Loan Commitment Percentage": as to any Canadian Lender
----------------------------------------
at any time, (a) prior to the Closing Date, the percentage which such
Canadian Lender's Canadian Term Loan Commitment then constitutes of the
aggregate Canadian Term Loan Commitments and (b) after the Closing Date,
the percentage which (i) the Aggregate Canadian Term Loan Outstandings of
such Canadian Lender at such time constitutes of (ii) the Aggregate
Canadian Term Loan Outstandings of all Canadian Lenders at such time.
"Canadian Term Loan Lender": each Lender that has a Canadian Term Loan
-------------------------
Commitment or holds Canadian Term Loans.
"CapEx Carryforward Amount": as defined in Section 11.7.
-------------------------
11
"Capital Expenditures": for any period, with respect to any Person,
--------------------
the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which are required to be capitalized under
GAAP on a balance sheet of such Person.
"Capital Lease Obligations": with respect to any Person, the
-------------------------
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP; and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Capital Stock Sale": any issuance and sale by Holdings after the
------------------
Closing Date of shares of its Capital Stock other than in connection with
(i) the exercise of options or warrants outstanding on the date hereof,
(ii) employee benefit arrangements, including the exercise of employee
stock options and the grant of restricted stock awards, (iii) Permitted
Acquisitions, (iv) the exchange of Exchangeable Shares, (v) the conversion
of convertible shares of Capital Stock, or (vi) the Transactions.
"Cash Equivalents": (a) (i) with respect to the Holdings or any
----------------
Domestic Subsidiary, marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States or (ii) with respect to any Foreign Subsidiary, marketable direct
obligations issued by, or unconditionally guaranteed by, the government of
the jurisdiction of organization of such Foreign Subsidiary or issued by
any agency thereof and backed by the full faith and credit of such
government, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, bankers' acceptances, time
deposits, eurodollar time deposits or overnight bank deposits having
maturities of one year or less from the date of acquisition issued by any
Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof having combined capital and surplus
of not less than $500,000,000 (or, in the case of any certificate of
deposit, bankers' acceptances, time deposits, eurodollar time deposits or
overnight time deposits of any Foreign Subsidiary, issued by any commercial
bank having capital and surplus of not less than $500,000,000 (or the
equivalent thereof)); (c) commercial paper of an issuer rated at least A-2
(or the equivalent thereof) by Standard & Poor's Ratings Services ("S&P")
---
or P-2 (or the equivalent thereof) by Xxxxx'x Investors Service, Inc.
---
("Moody's"), or carrying an equivalent rating by a nationally recognized
-------
rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper
12
issuers generally, and maturing within one year from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the applicable requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities of the types described in clauses (a) and (b) of this
definition; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States or any province or territory of Canada,
by any political subdivision or taxing authority of any such state,
commonwealth, province or territory or by any foreign government, the
securities of which state, commonwealth, province, territory, political
subdivision, taxing authority or foreign government (as the case may be)
are rated at least A (or the equivalent thereof) by S&P or A (or the
equivalent thereof) by Moody's or carry an equivalent rating by a
nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of such type generally; (f) securities
with maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; and (g)
shares of money market mutual or similar funds which invest substantially
in assets satisfying the requirements of clauses (a) through (f) of this
definition.
"CDOR Rate": the rate per annum determined by the Canadian
---------
Administrative Agent by reference to the average rate quoted on the Reuters
Monitor Screen, Page "CDOR" (or such other Page as may replace such Page on
such screen for the purpose of displaying Canadian interbank bid rates for
Canadian Dollar bankers' acceptances with a 30 day term as of 10:00 a.m.
(Toronto time) one Business Day prior to the first day of such 30 day term.
If for any reason the Reuters Monitor Screen rates are unavailable, CDOR
Rate means the rate of interest determined by the Canadian Administrative
Agent which is equal to the arithmetic mean of the rates quoted by such
reference banks as may be specified from time to time by the Canadian
Administrative Agent, after consultation with the Canadian Borrower, in
respect of Canadian Dollar bankers' acceptances with a 30 day term as of
10:00 a.m. one Business Day prior to the first day of such 30 day term.
"Chihuahua Acquisition": the acquisition by the U.S. Borrower or one
---------------------
of its Subsidiaries on the Closing Date of the Zenith facility located in
Chihuahua, Mexico, for an aggregate consideration not exceeding
U.S.$10,125,000 (subject to adjustment to up to $12,125,000 based on volume
purchases).
"Closing Date": the date on which the conditions precedent set forth
------------
in Section 9.1 shall have been satisfied or waived and the initial
extension of credit hereunder shall have been made, which date shall be not
later than August 7, 1999.
"Code": the Internal Revenue Code of 1986, as amended from time to
----
time.
"Collateral": all Property of the Loan Parties, now owned or
----------
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
13
"Collateral Monitoring Agent": Xxxxxx Commercial Paper Inc. together
---------------------------
with its affiliates, as collateral monitoring agent for the Lenders under
this Agreement and the other Loan Documents, and any successor thereto
appointed pursuant to Section 14.9.
"Commitment": with respect to any Lender, each of the Tranche A Term
----------
Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C Term
Loan Commitment, the U.S. Revolving Credit Commitment, the Canadian
Revolving Credit Commitment and the Canadian Term Loan Commitment of such
Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
------------------- --------
after the first Adjustment Date occurring after the completion of two full
fiscal quarters of Holdings after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.
"Commitment Percentage": any of the U.S. Revolving Credit Commitment
---------------------
Percentage, the Tranche A Term Loan Percentage, the Tranche B Term Loan
Percentage, the Tranche C Term Loan Percentage, the Canadian Term Loan
Percentage or the Canadian Revolving Credit Percentage, as the case may be.
"Commonly Controlled Entity": an entity, whether or not incorporated,
--------------------------
that is under common control with Holdings within the meaning of Section
4001 of ERISA or is part of a group that includes Holdings and that is
treated as a single employer under Section 414 (b), (c), (m) or (o) of the
Code.
"Compliance Certificate": a certificate duly executed by a
----------------------
Responsible Officer substantially in the form of Exhibit B-1.
"Confidential Information Memorandum": the Confidential Information
-----------------------------------
Memorandum dated July 1999 and furnished to the initial Lenders in
connection with the syndication of the Facilities.
"Consolidated Cash Interest Expense": of any Person for any period,
----------------------------------
the Consolidated Interest Expense accrued during such period to the extent
currently payable in cash (whether during such period or thereafter).
Notwithstanding the foregoing, if during any period for which
Consolidated Cash Interest Expense is being determined with respect to a
Person, such Person shall have consummated any Permitted Acquisition or
Disposition (other than the Transactions) then, for all purposes of this
Agreement, Consolidated Cash Interest Expense shall be determined on a pro
forma basis as if such Permitted Acquisition or Disposition (and any
Indebtedness incurred by the Borrower or any of its Subsidiaries in
connection with such Permitted Acquisition or repaid as a result of such
Disposition) had been made or consummated (and such Indebtedness incurred
or repaid) on the first day of such period.
14
"Consolidated Current Assets": at any date, all amounts (other than
---------------------------
cash, Cash Equivalents and deferred income taxes) that would, in conformity
with GAAP, be set forth opposite the caption "total current assets" (or any
like caption) on a consolidated balance sheet of Holdings and its
Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
--------------------------------
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of Holdings and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of Holdings and its Subsidiaries
(including accrued and unpaid interest), (b), without duplication, all
Indebtedness hereunder (including accrued and unpaid interest), to the
extent otherwise included therein and (c) deferred income taxes.
"Consolidated EBITDA": of any Person for any period, Consolidated Net
-------------------
Income of such Person and its Subsidiaries for such period plus, without
----
duplication and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period, the sum of (a) income tax
expense (including franchise taxes imposed in lieu of income taxes and
withholding taxes resulting from the repatriation or deemed repatriation of
income), (b) interest expense of such Person and its Subsidiaries
associated with Indebtedness (including the Loans and the Letters of
Credit) and Hedge Agreements, (c) amortization or writeoff of debt discount
and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans and the Letters
of Credit) and Hedge Agreements, (d) depreciation and amortization expense,
(e) amortization of intangibles (including, but not limited to, goodwill)
and organization costs, (f) any extraordinary, unusual or non-recurring
expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of
business, and charges for the write-up of any step-up in basis of inventory
required in a transaction which is accounted for under the purchase method
of accounting), (g) any non-cash charges (and any related withholding
taxes) incurred during such period as a result of the exercise or
conversion of any stock options or the grant to any employee of any
restricted stock award, (h) any one-time charges associated with the
Transactions or acquisitions, (i) all amounts incurred during such period
under the Management Agreement, (j) any amounts incurred pursuant to the
last sentence of Section 1.12 of the Exchange Agreement or the analogous
provision in any analogous agreement relating to the Exchangeable Shares,
(k) any charges incurred during such period in respect of employee
compensation to the extent an amount equal to such charges is applied to
the purchase of Capital Stock of Holdings or Exchangeable Shares, (l) with
respect to periods prior to the Closing Date, any charges for amounts other
than salary paid to stockholders of the Canadian Borrower and (m) any other
non-cash charges, and minus, to the extent included in the statement of
-----
such Consolidated Net Income for such period, the sum of (a) interest
income (except to the extent deducted in determining the amount of interest
expense described in clause (b) above), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income for such period, gains on
15
the sales of assets outside of the ordinary course of business) and (c) any
other non-cash income, all as determined on a consolidated basis; provided
--------
that for purposes of calculating Consolidated EBITDA of Holdings and its
Subsidiaries (x) for any period, (i) the Consolidated EBITDA of any Person
or assets acquired by Holdings or its Subsidiaries during such period shall
be included on a pro forma basis for such period (assuming the consummation
of such acquisition and the incurrence, assumption or repayment of any
Indebtedness in connection therewith occurred on the first day of such
period and adjusted for factually supportable and identifiable pro forma
cost savings for such period that are determined in accordance with GAAP
and concurred with by Holdings' independent accountants and that are
directly attributable to such acquisition) if Holdings shall deliver to the
Administrative Agent a certificate of a Responsible Officer setting forth
calculations required to support such pro forma adjustments and (ii) the
--- -----
Consolidated EBITDA of any Person Disposed of by Holdings or its
Subsidiaries during such period shall be excluded for such period (assuming
the consummation of such Disposition and the repayment of any Indebtedness
in connection therewith occurred on the first day of such period), and (y)
for any period that includes the Closing Date, the Consolidated EBITDA of
Holdings and its Subsidiaries shall be calculated on a pro forma basis
assuming the consummation of the Transactions and the incurrence,
assumption or repayment of any Indebtedness in connection therewith
occurred on the first day of such period and making appropriate adjustments
for factually supportable and identifiable pro forma cost savings for such
period that are determined in accordance with GAAP and concurred with by
Holdings' independent accountants and that are directly attributable to the
Transactions.
"Consolidated First Priority Debt": all Indebtedness of Holdings and
--------------------------------
the Borrowers under this Agreement and the other Loan Documents other than
Indebtedness in respect of the Tranche C Term Loans.
"Consolidated First Priority Debt Ratio": as of the last day of any
--------------------------------------
period of four consecutive fiscal quarters, the ratio of (a) Consolidated
First Priority Debt on such day to (b) Consolidated EBITDA of Holdings and
its Subsidiaries for such period.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
------------------------------------
(a) Consolidated EBITDA of Holdings and its Subsidiaries for such period to
(b) Consolidated Cash Interest Expense of Holdings and its Subsidiaries for
such period.
"Consolidated Interest Expense": of any Person for any period, total
-----------------------------
interest expense (including that attributable to Capital Lease Obligations)
of such Person and its Subsidiaries for such period with respect to all
outstanding Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges
owed by such Person with respect to letters of credit and bankers'
acceptance financing and net costs of such Person under Hedge Agreements in
respect of interest rates to the extent such net costs are allocable to
such period in accordance with GAAP, but excluding any prepayment premiums
or other prepayment charges to the extent allocable to such period in
accordance with GAAP).
16
"Consolidated Leverage Ratio": as at the last day of any period of
---------------------------
four consecutive fiscal quarters of Holdings, the ratio of (a) Consolidated
Total Debt on such day to (b) Consolidated EBITDA of Holdings and its
Subsidiaries for such period.
"Consolidated Net Income": of any Person for any period, the
-----------------------
consolidated net income (or loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP;
provided, that in calculating Consolidated Net Income of Holdings and its
--------
consolidated Subsidiaries for any period, there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or
any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of Holdings) in which Holdings or any of its Subsidiaries
has an ownership interest, except to the extent that any such income is
actually received by Holdings or such Subsidiary in the form of dividends
or similar distributions and (c) the undistributed earnings of any
Subsidiary of Holdings to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Total Debt": at any date, the aggregate principal
-----------------------
amount of all Funded Debt of Holdings and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the difference of (a)
----------------------------
Consolidated Current Assets on such date less (b) Consolidated Current
Liabilities on such date.
"Continuing Directors": the directors of Holdings on the Closing
--------------------
Date, after giving effect to the Transactions and the other transactions
contemplated hereby, and each other director of Holdings, if, in each case,
such other director (i) was elected to the board of directors pursuant to
the Stockholders Agreement, (ii) was elected to the board of directors
pursuant to class voting by the holders of Class A-1 Common Stock, Class A-
2 Common Stock, Class L Common Stock and Class N Common Stock on the
Closing Date pursuant to the certificate of incorporation of Holdings, or
(iii) whose nomination for election to the board of directors of Holdings
is recommended by at least 66-2/3% of the then Continuing Directors or such
other director receives the vote of the Permitted Investors in his or her
election by the shareholders of Holdings.
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other Person
----------------------------
that (a) directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or
more companies. For purposes of this definition, "control" of a
17
Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether by
contract or otherwise.
"Default": any of the events specified in Section 13, whether or not
-------
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Derivatives Counterparty": as defined in Section 11.6.
------------------------
"Disposition": with respect to any Property, any sale, lease, sale
-----------
and leaseback, assignment, conveyance, transfer or other disposition
thereof (excluding the sale by Holdings of its own Capital Stock); and the
terms "Dispose" and "Disposed of" shall have correlative meanings.
------- -----------
"Domestic Subsidiary": any Subsidiary of Holdings organized under the
-------------------
laws of any jurisdiction within the United States of America.
"Draft": a draft substantially in the form of Exhibit H or in such
-----
other form as the Canadian Administrative Agent may from time to time
reasonably request (or to the extent the context shall require, an
Acceptance Note, delivered in lieu of a draft), as the same may be amended,
supplemented or otherwise modified from time to time.
"ECF Percentage": with respect to any fiscal year of Holdings, 75%;
--------------
provided, that, with respect to any fiscal year of Holdings ending on a
--------
date on which the Consolidated Leverage Ratio is less than 3.50 to 1.0, the
ECF Percentage shall be 50%.
"Eligible Accounts": as to any Borrower, at a particular date, all
-----------------
Accounts of such Borrower arising in the ordinary course of business, net
of reserves required by GAAP, other than:
(a) Accounts which are outstanding more than 90 days past the
due date;
(b) Accounts as to which the account debtor thereunder has not
been sent an invoice within 60 days after shipping;
(c) Accounts which are owed by an obligor which is an Affiliate
(other than a Control Investment Affiliate of a Sponsor or a
subsidiary of such a Control Investment Affiliate) or employee of such
Borrower;
(d) Accounts which are pre-petition liabilities owed by an
obligor which has taken any of the actions or suffered any of the
events of the kind described in Section 13(f) (other than accounts
owed by Zenith Electronics Corporation or any of its subsidiaries);
(e) Accounts which are owed by account debtors located outside
the United States of America other than Canada (but excluding
Newfoundland,
00
Xxxxxxxxx Xxxxxxxxxxx and Nunavut) and any other Approved
Jurisdiction, other than such Accounts in respect of sales which are
secured by standby letters of credit or other instruments (in form and
substance satisfactory to the Collateral Monitoring Agent) issued or
confirmed by, and payable at, banks satisfactory to the Collateral
Monitoring Agent having a place of business in the United States of
America or Canada and payable in U.S. Dollars or Canadian Dollars,
which letters of credit are assigned or issued for the benefit of and
delivered to the Collateral Monitoring Agent; provided that the
--------
Accounts in respect of such sales otherwise comply with all of the
other criteria set forth in this definition of Eligible Accounts and
represent sales not in excess of U.S. $5,000,000 in the aggregate at
any one time outstanding;
(f) Accounts (i) upon which such Borrower's right to receive
payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever or (ii) as to which such Borrower is not able at
the time Borrower intends to seek judicial recourse with respect to
such Account to bring suit or otherwise enforce its remedies against
the account debtor through judicial process or (iii) if the Account
represents a progress billing consisting of an invoice for goods sold
or used or services rendered pursuant to a contract under which the
account debtor's obligation to pay that invoice is subject to such
Borrower's completion of further performance under such contract or is
subject to the equitable lien of a surety bond issuer;
(g) any Account to the extent that any defense, counterclaim,
setoff or dispute is asserted as to such Account;
(h) any Account that is not a true and correct statement of bona
fide indebtedness incurred in the amount of the Account for
merchandise sold to or services rendered and accepted by the
applicable account debtor;
(i) any Account to the extent such Borrower or any Subsidiary
thereof is liable for goods sold or services rendered by the
applicable account debtor to such Borrower or any Subsidiary thereof
but only to the extent of the potential offset;
(j) any Account that arises with respect to goods which are
delivered on a xxxx-and-hold, cash-on-delivery basis or placed on
consignment, guaranteed sale or other terms by reason of which the
payment by the account debtor is or may be conditional;
(k) any Account as to which any of the representations or
warranties pertaining to Accounts set forth in this Agreement or the
Security Documents is untrue in any material respect;
(l) any Account which is payable in a currency other than U.S.
Dollars or Canadian Dollars;
19
(m) Accounts which are owed by a Governmental Authority or an
Affiliate thereof (unless, with respect to Accounts arising from sales
to (i) the United States of America or to any agency, department or
division thereof, such Borrower or the relevant Subsidiary thereof has
complied with the Federal Assignment of Claims Act with respect
thereto) or (ii) Canada or any agency, department or division thereof,
such Borrower or the relevant Subsidiary thereof has complied with the
Financial Administration Act (Canada); provided, that Accounts in an
--------
aggregate amount of up to US$1,000,000 owed by Governmental
Authorities (and in respect of which the relevant Borrower has not
complied with the Assignment of Claims Act or the Financial
Administration Act) shall be eligible for inclusion as Eligible
Accounts; or
(n) Accounts (i) which are not bona fide, valid and legally
enforceable obligations of the parties thereto or the account debtor
in respect thereof and which do not arise from the sale and delivery
of Inventory or the rendition of services in the ordinary course of
business to such parties or account debtors, (ii) as to which either
such Borrower or (to the best of such Borrower's knowledge) any other
party to such Account is in default in the performance or observance
of any of the terms thereof in any material respect, (iii) which are
not solely owned by such Borrower (subject to the Lien of an
Administrative Agent therein), (iv) in which such Borrower (1) has not
granted a valid and continuing first lien and first security interest
in favor of an Administrative Agent pursuant to the Security Documents
and (2) does not have good and marketable title, free and clear of any
and all Liens (except inchoate or similar Liens, and Liens created
under the Security Documents) or rights of others enforceable as such
against all other Persons, (v) as to which all action necessary under
applicable law to protect and perfect such lien and security interest
has not been duly taken, (vi) as to which any amounts payable under or
in connection therewith are evidenced by promissory notes or other
instruments except (1) instruments which constitute a part of chattel
paper and which have been individually marked to show the Lien granted
pursuant to the Security Documents and (2) instruments which have been
delivered to an Administrative Agent or the Collateral Monitoring
Agent on behalf of an Administrative Agent and (vii) as to which any
security agreement, financing statement, equivalent security or lien
instrument or continuation statement covering all or any part thereof
is on file or of record in any public office, except such as may have
been filed in favor of an Administrative Agent pursuant to the
Security Documents.
"Eligible Inventory": as to any Borrower, at a particular date, all
------------------
Inventory of such Borrower and its Subsidiaries, net of reserves required
by GAAP; provided, that the following shall not constitute Eligible
--------
Inventory:
(a) Inventory (A) which is not solely owned by such Borrower or
a Subsidiary thereof; or (B) which is not located on property owned or
leased by
20
such Borrower or a Subsidiary thereof or in a contract warehouse or
located at an outside contractor, except for such Inventory that is
listed on Schedule 1.1;
(b) (x) Inventory (other than Mexican Inventory) as to which
such Borrower or a Subsidiary thereof has not granted a valid and
continuing first Lien in favor of an Administrative Agent pursuant to
the Security Documents or (y) Inventory as to which such Borrower or a
Subsidiary thereof does not have good and marketable title, free and
clear of any and all Liens (other than inchoate warehouseman's or
similar Liens and Liens created pursuant to the Security Documents but
including the rights of a purchaser that has made progress payments
and the rights of a surety that has issued a bond to assure such
Borrower's performance with respect to that Inventory);
(c) Inventory as to which any security agreement, financing
statement, equivalent security or lien instrument or continuation
statement covering all or any part thereof is on file or of record in
any public office, except such as may have been filed in favor of an
Administrative Agent pursuant to the Security Documents;
(d) Inventory (other than Mexican Inventory) which constitutes
any supplies consisting of display items, goods present outside of the
United States of America, Canada or Ireland, goods returned or
rejected by the customers of such Borrower or the relevant Subsidiary
(other than goods that are undamaged and resalable in the ordinary
course of business), goods to be returned to the suppliers of such
Borrower or the relevant Subsidiary or goods in transit to third
parties (other than the agents or warehouses of such Borrower and its
Subsidiaries); provided, that up to U.S.$500,000 of Inventory in
--------
transit (other than Mexican Inventory) which satisfies the other
requirements of this definition may be included in Eligible Inventory;
(e) Inventory which is placed on consignment;
(f) Inventory which is covered by a negotiable document of
title, unless such document has been delivered to an Administrative
Agent or the Collateral Monitoring Agent on behalf of an
Administrative Agent with all necessary endorsements, free and clear
of all Liens except those in favor of an Administrative Agent pursuant
to the Security Documents;
(g) Inventory which is not of a type held for sale in the
ordinary course of such Borrower's business;
(h) Inventory (other than Mexican Inventory) as to which the
Lien created by the Security Documents therein is not a first priority
perfected Lien; provided, that up to U.S.$2,500,000 of other Inventory
--------
(other than Mexican Inventory) which satisfies all requirements of
this definition other than requirements relating to the existence of a
first priority security interest therein in favor of an
21
Administrative Agent pursuant to the Security Documents may be
included in Eligible Inventory;
(i) Inventory as to which any of the representations or
warranties pertaining to Inventory (other than representations and
warranties relating to the security interest of an Administrative
Agent therein, to the extent such exception is permitted by the
foregoing clause (h)) set forth in this Agreement or the Security
Documents is untrue in any material respect; or
(j) Inventory which is not covered by the casualty insurance
required by Section 10.6.
"Environmental Laws": any and all applicable laws, rules, orders,
------------------
regulations, statutes, ordinances, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any
state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and
safety, as is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, approvals,
---------------------
registrations, notifications, exemptions and other authorizations required
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
--------------------
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the "Eurodollar Base Rate" for
--------------------
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as
may be selected by the General Administrative Agent (with respect to
22
Loans to the U.S. Borrower) or the Canadian Administrative Agent (with
respect to Loans to the Canadian Borrower).
"Eurodollar Loans": Loans for which the applicable rate of interest
----------------
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
------------------
under the same Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 13;
----------------
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, has been satisfied.
"Excess Cash Flow": with respect to any Person, for any fiscal year
----------------
of Holdings, the difference, if any, of (a) the sum, without duplication,
of (i) such Person's Consolidated Net Income for such fiscal year, (ii) the
amount of all non-cash charges (including depreciation and amortization)
deducted in arriving at such Consolidated Net Income, (iii) the amount of
the decrease, if any, in such Person's Consolidated Working Capital for
such fiscal year, (iv) the aggregate net amount of non-cash loss on the
Disposition of Property by such Person and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net
Income, (v) the net increase during such fiscal year (if any) in deferred
tax accounts of such Person and its Subsidiaries, (vi) the amount by which
such Person's Consolidated Working Capital was increased as a result of the
payment in such fiscal year of items referred to in clause (b)(xv) below
and (vii) any unused CapEx Carryforward Amount from the prior fiscal year,
minus (b) the sum, without duplication, of (i) the amount of all non-cash
-----
credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by such Person and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (excluding the
principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of any
portion of any Reinvestment Deferred Amount that exceeded any gain included
in the determination of such Person's Consolidated Net Income recognized as
a result of the event that gave rise to such Reinvestment Deferred Amount),
(iii) the CapEx Carryforward Amount for such fiscal year, (iv) the
aggregate amount of all prepayments of Revolving Credit Loans and Swing
Line Loans by or on behalf of such Person during such fiscal year to the
extent accompanying permanent optional reductions of the Revolving Credit
Commitments, (v) the aggregate amount of all
23
optional prepayments of the Term Loans and other Funded Debt during such
fiscal year, (vi) the aggregate amount of all regularly scheduled principal
payments of the Term Loans and other Funded Debt of such Person and its
Subsidiaries made during such fiscal year (other than in respect of any
revolving credit facility to the extent there is not an equivalent
permanent reduction in commitments thereunder), (vii) the amount of the
increase, if any, in such Person's Consolidated Working Capital for such
fiscal year, (viii) the aggregate net amount of non-cash gain on the
Disposition of Property by such Person and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of
business), to the extent included in arriving at such Consolidated Net
Income, and (ix) the net decrease during such fiscal year (if any) in
deferred tax accounts of such Person and its Subsidiaries, (x) any cash
payments made during such period in permanent satisfaction of non-current
liabilities of such Person and its Subsidiaries (except any such
liabilities that constitute Funded Debt other than Capital Lease
Obligations), (xi) any cash payments made by such Person or its
Subsidiaries during such fiscal year in respect of restructuring charges to
the extent not deducted in determining such Consolidated Net Income, (xii)
any Restricted Payments permitted under Section 11.6 and made by such
Person in cash during such fiscal year, (xiii) any cash payments made
during such fiscal year pursuant to Investments made by such Person and its
Subsidiaries permitted under Section 11.8(d), (f) and (m) and which results
in a net increase during such fiscal year in the outstanding or unreturned
cash balance of such Investments, (xiv) any gain recognized as a result of
any Asset Sale or Recovery Event to the extent such gain was included in
determining such Consolidated Net Income and (xv) the amount of non cash
charges that decreased such Person's Consolidated Working Capital during
such fiscal year which resulted from items that Holdings reasonably
determines in good faith are expected to be paid in cash in the immediately
following fiscal year.
"Excess Cash Flow Application Date": as defined in Section 7.5(d).
---------------------------------
"Excess Net Cash Proceeds": the amount by which the aggregate Net
------------------------
Cash Proceeds from Capital Stock Sales exceed $25,000,000.
"Exchange Agreement": the Exchange Agreement, dated as of July 30,
------------------
1999, among Holdings, the Canadian Borrower, SMTC Nova Scotia and the
stockholders listed therein.
"Exchangeable Shares": any Capital Stock issued by the Canadian
-------------------
Borrower that in any event is required to be exchanged for Capital Stock
issued by Holdings or which is automatically callable if all of the
Indebtedness hereunder becomes due and payable (whether by acceleration or
otherwise) and is not paid in full at such time.
"Exchange Rate": on any date, the Bank of Canada noon spot rate on
-------------
such date. In the event that such rate is not made available, the "Exchange
Rate" shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the Canadian
Administrative Agent and the U.S. Borrower or, in the absence of such
agreement, the "Exchange Rate" shall instead be the Canadian
24
Administrative Agent's spot rate of exchange in the interbank market where
its foreign currency exchange operations in respect of Canadian Dollars are
then being conducted, at or about 10:00 A.M., local time, on such date for
the purchase of U.S. Dollars with Canadian Dollars, for delivery two
Business Days later; provided, that if at the time of any such
--------
determination, no such spot rate can reasonably be quoted, the Canadian
Administrative Agent may use any reasonable method as it deems applicable
to determine such rate, and such determination shall be conclusive absent
manifest error.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect of
-----------------------------
which either (i) the pledge of all of the Capital Stock of such Subsidiary
as Collateral or (ii) the guaranteeing by such Subsidiary of the
obligations of the U.S. Borrower hereunder, would, in the good faith
judgment of Holdings, result in adverse tax consequences to Holdings or any
Affiliate thereof.
"Extension of Credit": as to any Lender, the making of a Loan by such
-------------------
Lender, the acceptance of a Draft or an Acceptance Note by such Lender or
the issuance of any Letter of Credit. For purposes of Section 9.2, it is
expressly understood and agreed that the following do not constitute
Extensions of Credit for purposes of this Agreement: (a) the conversions
and continuations of U.S. Facility Loans as or to Eurodollar Loans or Base
Rate Loans pursuant to Section 7.2, (b) the substitution of maturing
Acceptances with new Acceptances, (c) the making of Canadian Revolving
Credit Loans on any date to the extent the proceeds thereof are applied to
repay Acceptances and Acceptance Notes maturing on such date, (d) the
creation of Acceptances or Acceptance Notes on any date in an aggregate
undiscounted face amount not exceeding the aggregate principal amount of
Canadian Revolving Credit Loans repaid on such date, (e) the conversions
and continuation of Canadian Facility Loans as or to Eurodollar Loans
pursuant to Section 7.2.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
--------
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility"),
----------------------------
(b) the Tranche B Term Loan Commitments and the Tranche B Term Loans made
thereunder (the "Tranche B Term Loan Facility"), (c) the Tranche C Term
----------------------------
Loan Commitments and the Tranche C Term Loans made thereunder (the "Tranche
-------
C Term Loan Facility"), (d) the U.S. Revolving Credit Commitments and the
--------------------
extensions of credit made thereunder (the "Revolving Credit Facility"), (e)
-------------------------
the Canadian Term Loan Commitments and the Canadian Term Loans made
thereunder (the "Canadian Term Loan Facility") and (f) the Canadian
---------------------------
Revolving Credit Commitments and the Canadian Revolving Credit Loans made
thereunder and the Acceptance and Acceptance Notes created thereunder (the
"Canadian Revolving Credit Facility").
----------------------------------
"Federal Funds Effective Rate": for any day, the weighted average of
----------------------------
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions
25
received by the Reference Lender from three federal funds brokers of
recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of Holdings that is not a
------------------
Domestic Subsidiary.
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical year
--- --- --- ---
designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of Holdings. (e.g., FQ1 2000 means the
first fiscal quarter of Holdings 2000 fiscal year, which fiscal quarter
ends March 31, 2000).
"Funded Debt": with respect to any Person, all Indebtedness of such
-----------
Person of the types described in clauses (a) through (e) of the definition
of "Indebtedness" in this Section.
"GAAP": generally accepted accounting principles in the United States
----
of America as in effect from time to time, except that for purposes of
Section 11.1, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements referred to in Section 8.1,
except that calculations made for purposes of determining compliance with
Section 11.1 and for purposes of determining the Applicable Margin shall be
made without giving effect to depreciation, amortization or other expenses
to the extent recorded as a result of the application of purchase
accounting in accordance with Accounting Principles Board Opinion Nos. 16
and 17.
"General Administrative Agent": Xxxxxx Commercial Paper Inc.,
----------------------------
together with its affiliates, as general administrative agent for the
Lenders under this Agreement and the other Loan Documents, and any
successor thereto appointed pursuant to subsection 14.9.
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
----------------------------------
Agreement to be executed and delivered by Holdings, the U.S. Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as the
same may be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
-------------------- -------------------
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
-------------------
(the "primary obligor") in any manner, whether directly or indirectly,
---------------
including, without limitation, any
26
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
-------- -------
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in
each case, in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by Holdings in good faith.
"Guarantors": the collective reference to Holdings and the Subsidiary
----------
Guarantors.
"Hedge Agreements": all interest rate or currency swaps, caps or
----------------
collar agreements or similar arrangements or foreign exchange contracts
entered into by Holdings or any of its Subsidiaries providing for
protection against fluctuations in interest rates or currency exchange
rates or the exchange of nominal interest obligations, either generally or
under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than trade payables and accrued expenses incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to Property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party under acceptance,
letter of credit or similar facilities, (g) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses
(a) through (f) above; (h) all obligations of the kind referred to in
clauses (a) through (g) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on Property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such Person has
assumed or become liable
27
for the payment of such obligation, (i) for the purposes of Section 13(e)
only, all obligations of such Person in respect of Hedge Agreements. The
amount of any Indebtedness under (x) clause (h) shall be equal to the
lesser of (A) the stated amount of the relevant obligations and (B) the
fair market value of the Property subject to the relevant Lien and (y)
clause (i) shall be the net amount, including any net termination payments,
required to be paid to a counterparty rather than the notional amount of
the applicable Hedge Agreement.
"Indemnified Liabilities": as defined in Section 15.5.
-----------------------
"Indemnitee": as defined in Section 15.5.
----------
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": the collective reference to all rights,
---------------------
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to xxx at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.
"Interest Payment Date": (a) as to any U.S. Base Rate Loan, Canadian
---------------------
Base Rate Loan or Canadian Prime Rate Loan, the last day of each March,
June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period and (d) as to any Term Loan, the date of any
repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
---------------
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six or
(if available to all Lenders under the relevant Facility) nine or twelve
months thereafter, as selected by the relevant Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with respect
thereto; and (b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six or (if available to all Lenders under the
relevant Facility) nine or twelve months thereafter, as selected by the
relevant Borrower by irrevocable notice to the General Administrative Agent
(or the Canadian Administrative Agent, in the case of Canadian Facility
Loans) not
28
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the foregoing
--------
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period in respect of Loans under any
Facility that would otherwise extend beyond the date final payment is
due on such Loans shall end on such due date;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iv) Interest Periods of one week's duration may be selected
prior to the Syndication Date.
"Inventory": as to any Person, any "inventory" (as such term is
---------
defined in Section 9-109(4) of the Uniform Commercial Code as in effect on
the date hereof in the State of New York) now or hereafter owned by such
Person.
"Investments": as defined in Section 11.8.
-----------
"Issuing Lender": any U.S. Issuing Lender or Canadian Issuing Lender.
--------------
"L/C Fee Payment Date": the last day of each March, June, September
--------------------
and December and the last day of the U.S. Revolving Credit Commitment
Period or the Canadian Revolving Credit Commitment Period, as the case may
be.
"L/C Participants": the collective reference to the U.S. L/C
----------------
Participants and the Canadian L/C Participants.
"Xxxxxx Entity": any of Xxxxxx Commercial Paper Inc. or any of its
-------------
affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a Lender
---------------
Addendum, substantially in the form of Exhibit M, to be executed and
delivered by such Lender on the Closing Date as provided in Section 15.17.
"Lenders": as defined in the preamble hereto.
-------
29
"Letters of Credit": as defined in Section 6.1.
-----------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, in each case, for the purpose of
securing any obligation of any Person (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
----
"Loan Documents": this Agreement, the Security Documents, the
--------------
Syndication Letter Agreement, the Applications, the Notes, the Acceptances
and the Acceptance Notes.
"Loan Parties": Holdings, each Borrower and each Subsidiary of
------------
Holdings that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
-------------------------
holders of more than 50% of the aggregate unpaid principal and/or face
amount of the Extensions of Credit under such Facility (or, in the case of
the U.S. Revolving Credit Facility or the Canadian Revolving Credit
Facility, prior to the termination of the U.S. Revolving Credit Commitments
or the Canadian Revolving Credit Commitments, respectively, the holders of
more than 50% of the total U.S. Revolving Credit Commitments or the total
Canadian Revolving Credit Commitments, respectively).
"Management Agreement": the Management Agreement between Holdings,
--------------------
Xxxx Capital Partners VI, L.P., Celerity Management Co., Inc. and Xxxxxx
Electronics Group Limited, to be dated as of July 30, 1999, as in effect on
the Closing Date.
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
Transactions, (b) the business, assets, property or financial condition of
Holdings and its Subsidiaries taken as a whole or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
material rights or remedies, taken as a whole, of the Agents or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances or forces
of any kind, whether or not any such substance or force is defined as
hazardous or toxic under any Environmental Law, that is regulated pursuant
to or could give rise to liability under any Environmental Law.
"Material Subsidiary": any Subsidiary with assets as of or revenues
-------------------
for the most recently concluded period of four fiscal quarters of, greater
than $1,000,000.
30
"Mexican Inventory": Inventory of the U.S. Borrower which satisfies
-----------------
all requirements of the definition of Eligible Inventory in this Section
1.1 except the requirements set forth in subsections (b), (d) and (h) of
such definition.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
-----------------
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received and excluding the portion of such deferred payment constituting
interest) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied
to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such Asset Sale or Recovery
Event (other than any Lien pursuant to a Security Document) and other
customary costs, fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and net of amounts deposited
in escrow in connection therewith or reasonably expected to be paid as a
result of any purchase price adjustment, indemnities or reserves related
thereto (such amounts shall be Net Cash Proceeds to the extent and at the
time released or not required to be so used) and, (b) in connection with
any issuance or sale of equity securities or debt securities or instruments
or the incurrence of loans, the cash proceeds received from such issuance
or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 7.13(a).
------------------
"Non-U.S. Lender": as defined in Section 7.13(d).
---------------
"Note": any promissory note evidencing any Loan.
----
"OECD": Organization for Economic Cooperation and Development.
----
"Other Taxes": any and all present or future stamp or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 6.6(b).
-----------
"Payment Amount": as defined in Section 6.5.
--------------
31
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": (i) the Chihuahua Acquisition and (ii) any
---------------------
acquisition by Holdings or any of its Subsidiaries of all or substantially
all of the Capital Stock, or substantially all of the assets, of any
Person, or of all or substantially all of the assets constituting a
division or business line of any Person, if such acquisition complies with
the following criteria:
(a) No Default or Event of Default shall be in effect after
giving effect to such acquisition, and Holdings shall have delivered
to the General Administrative Agent a certificate of a Responsible
Officer to such effect.
(b) After giving effect to the consummation of such acquisition
and to the incurrence of any Indebtedness associated therewith, (i)
the Consolidated Leverage Ratio (determined in the manner described in
Section 11.1) shall not exceed (A) in respect of any such acquisition
consummated before the first anniversary of the Closing Date, 4.25 to
1.00, (B) in respect of any such acquisition consummated on or after
the first anniversary of the Closing Date and before the second
anniversary of the Closing Date, 4.00 to 1.00 and (C) in respect of
any such acquisition consummated on or after the second anniversary of
the Closing Date, 3.75 to 1.00 and (ii) the Consolidated First
Priority Debt Ratio (determined in the manner described in Section
11.1) shall not exceed (A) in respect of any such acquisition
consummated before the first anniversary of the Closing Date, 4.00 to
1.00 and (B) in respect of any such acquisition consummated on or
after the first anniversary of the Closing Date and before the second
anniversary of the Closing Date, 3.75 to 1.00 and (C) in respect of
any such acquisition consummated on or after the second anniversary of
the Closing Date, 3.50 to 1.00.
(c) The Person, division or line of business acquired in such
acquisition (the "Target") shall be in the same or a similar line of
------
business as Holdings and its Subsidiaries, or in a line of business
related thereto.
(d) Prior to the consummation of such acquisition (i) the Lenders
shall have received (x) financial projections in respect of the Target
for the one-year period following the consummation of such acquisition
and (y) such financial information as they shall reasonably request to
demonstrate pro forma compliance with the financial criteria set forth
--- -----
in paragraph (b) above, (ii) the Lenders shall be reasonably satisfied
with the environmental affairs of the Person, division or line of
business to be acquired in such acquisition, (iii) the General
Administrative Agent shall have received final copies of the
documentation to be executed in connection with such acquisition,
including all schedules and exhibits thereto and (iv) the General
Administrative Agent (for distribution to the Lenders) shall have
received notice of the closing date for such acquisition; provided,
--------
that, such notice shall be given at least five Business Days prior to
such closing date unless doing so would
32
materially interfere with, or would cause materially adverse economic
consequences with respect to, the consummation of such acquisition.
(e) (i) After giving effect to any such acquisition made by the
Canadian Borrower or any of its Subsidiaries, the Available Canadian
Revolving Credit Commitment shall be at least $2,000,000 or (ii) after
giving effect to any such acquisition made by the U.S. Borrower or any
of its Subsidiaries, the sum of the Available U.S. Revolving Credit
Commitment and the Available Canadian Revolving Credit Commitment
shall be at least $2,000,000.
"Permitted Investors": the collective reference to the each Sponsor
-------------------
and its Control Investment Affiliates and the SMT Investors.
"Permitted Seller Debt": unsecured Indebtedness of Holdings issued in
---------------------
connection with a Permitted Acquisition to the seller party to such
Permitted Acquisition, provided, that (a) such Indebtedness shall not be
--------
guaranteed by any Subsidiary of Holdings and (b) such Indebtedness shall
have subordination and other terms and conditions reasonably acceptable to
the General Administrative Agent.
"Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan that is
----
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Powers of Attorney": as defined in Section 5.7(b).
------------------
"Prepayment Option Notice": as defined in Section 7.5(i).
------------------------
"Pricing Grid": the pricing grid attached hereto as Annex A.
------------
"Pro Forma Balance Sheet": as defined in Section 8.1(a).
-----------------------
"Projections": as defined in Section 10.2(c).
-----------
"Property": any right or interest in or to property of any kind
--------
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of any
--------------
property or casualty insurance claim or any condemnation proceeding
relating to any asset of Holdings or any of its Subsidiaries with a value
in excess of $500,000.
33
"Reference Discount Rate": on any date with respect to each Draft
-----------------------
requested to be accepted by a Canadian Lender, (a) if such Canadian Lender
is a Schedule I Canadian Lender, the arithmetic average of the discount
rates (expressed as a percentage calculated on the basis of a year of 365
days and rounded upward to the nearest one-hundredth of 1%) quoted by the
Toronto offices of each of the Schedule I Canadian Reference Lenders, at
10:00 A.M. (Toronto time) on the Borrowing Date as the discount rate at
which each such Schedule I Canadian Reference Lender would, in the normal
course of its business, purchase on such date its own Acceptances having an
aggregate face amount and term to maturity as designated by the Canadian
Borrower pursuant to Section 4.6 or Section 5.7, as the case may be, and
(b) if such Canadian Lender is a Schedule II Canadian Lender, the
arithmetic average of the discount rates (expressed as a percentage
calculated on the basis of a year of 365 days and rounded upward to the
nearest one-hundredth of 1%) quoted by the Toronto offices of each of the
Schedule II Canadian Reference Lenders, at 10:00 A.M. (Toronto time) on the
Borrowing Date as the discount rate at which each such Schedule II Canadian
Reference Lender would, in the normal course of its business, purchase on
such date its own Acceptances having an aggregate face amount and term to
maturity as designated by the Canadian Borrower pursuant to Section 4.6 or
Section 5.7, as the case may be. The Canadian Administrative Agent shall
advise the Canadian Borrower and the relevant Canadian Lenders, either in
writing or verbally, by 11:00 A.M. (Toronto time) on the Borrowing Date as
to the applicable Reference Discount Rate and corresponding Acceptance
Purchase Price in respect of Acceptances having the maturities selected by
the Canadian Borrower for such Borrowing Date. Notwithstanding the
foregoing, the Canadian Borrower, the Canadian Administrative Agent and the
Canadian Lenders, may agree upon alternative methods of determining the
Reference Discount Rate from time to time.
"Refunded Swing Line Loans": as defined in Section 2.7.
-------------------------
"Refunding Date": as defined in Section 2.7.
--------------
"Register": as defined in Section 15.6(d).
--------
"Regulation H": Regulation H of the Board as in effect from time to
------------
time.
"Regulation U": Regulation U of the Board as in effect from time to
------------
time.
"Reimbursement Obligation": the obligations of the relevant Borrower
------------------------
pursuant to Section 6.5 to reimburse the relevant Issuing Lender in respect
of any Letter of Credit issuer for such Borrower's account.
"Reinvestment Deferred Amount": with respect to any Reinvestment
----------------------------
Event, the aggregate Net Cash Proceeds received by Holdings or any of its
Subsidiaries in connection therewith that are not applied to prepay the
Loans or reduce the Commitments pursuant to Section 7.5 as a result of the
delivery of a Reinvestment Notice.
34
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
------------------
which Holdings has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
-------------------
Officer stating that no Default or Event of Default has occurred and is
continuing and that Holdings (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash
Proceeds of an Asset Sale or Recovery Event to acquire assets (directly or
through the purchase of the Capital Stock of any Person owning such assets)
useful in the business of Holdings or any of its Subsidiaries.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
------------------------------
Event, the Reinvestment Deferred Amount relating thereto less any amount
----
expended prior to the relevant Reinvestment Prepayment Date to acquire
assets (directly or through the purchase of the Capital Stock of any Person
owning such assets) useful in the business of Holdings or any of its
Subsidiaries.
"Reinvestment Prepayment Date": with respect to any Reinvestment
----------------------------
Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which Holdings shall have determined
not to, or shall have otherwise ceased to, acquire assets (directly or
through the purchase of the Capital Stock of any Person owning such assets)
useful in the business of Holdings or any of its Subsidiaries with all or
any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Replacement Subordinated Debt": unsecured Indebtedness of Holdings
-----------------------------
that (a) is not guaranteed by any Subsidiary of Holdings, (b) has a final
maturity no earlier than the final maturity of the Tranche C Term Loans,
(c) amortizes at a rate no faster than the Tranche C Term Loans, (d) has
an annual interest expense no greater than the interest expense in respect
of the Tranche C Term Loans during the twelve month period immediately
preceding the date of issuance of such subordinated debt and (e) has
subordination terms, covenants, events of default, defaults and other terms
and conditions reasonably acceptable to the General Administrative Agent.
"Reportable Event": any of the events set forth in Section 4043(c) of
----------------
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. (S) 4043.
"Request for Acceptances": as defined in Section 5.7(a).
-----------------------
"Required Lenders": at any time, the holders of more than 50% of (a)
----------------
until the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal and/or face amount of the Term Loans and T/L
Acceptances and Acceptance Notes then outstanding and (ii) the U.S.
Revolving Credit Commitments and Canadian
35
Revolving Credit Commitments then in effect or, if the Commitments have
been terminated, the Aggregate U.S. Revolving Extensions of Credit and
Aggregate Canadian Revolving Extensions of Credit of all Lenders then
outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders in
---------------------------
respect of each Facility (other than the Tranche C Term Loan Facility).
"Requirement of Law": as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer": with respect to any Person, the chief
-------------------
executive officer, president, executive vice president, senior vice
president--finance, vice president--finance or chief financial officer of
such Person, but in any event, with respect to financial matters, the
executive vice president, senior vice president--finance, vice president--
finance or chief financial officer of such Person. When any provision of
this Agreement requires an action by a Responsible Officer, such action may
be taken by a Responsible Officer of Holdings or Responsible Officers of
both Borrowers.
"Restricted Payments": as defined in Section 11.6.
-------------------
"Revolving Credit Commitments": the U.S. Revolving Credit
----------------------------
Commitments, the Canadian Revolving Credit Commitments and the Swing Line
Commitment.
"Schedule I Canadian Lender": each Canadian Lender listed on Schedule
--------------------------
I to the Bank Act (Canada).
"Schedule I Canadian Reference Lenders": one or more Schedule I
-------------------------------------
Canadian Lenders selected by the Canadian Borrower with the consent of all
Schedule I Canadian Lenders.
"Schedule II Canadian Lender": each Canadian Lender which is not a
---------------------------
Schedule I Canadian Lender.
"Schedule II Canadian Reference Lenders": one or more Schedule II
--------------------------------------
Canadian Lenders selected by the Canadian Borrower with the consent of all
the Schedule II Canadian Lenders.
"SEC": the Securities and Exchange Commission (or successors thereto
---
or an analogous Governmental Authority).
"Security Documents": the collective reference to the Guarantee and
------------------
Collateral Agreement, the Canadian Security Documents, the Canadian
Facility Guarantees and all
36
other security documents hereafter delivered to the General Administrative
Agent or the Canadian Administrative Agent granting a Lien on any Property
of any Person to secure the obligations and liabilities of any Loan Party
under any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"SMT Investors": the shareholders of the Canadian Borrower that
-------------
become shareholders of Holdings pursuant to the Transactions.
"SMTC Nova Scotia": SMTC Nova Scotia Company, a Nova Scotia unlimited
----------------
liability company which is the immediate parent company of the Canadian
Borrower.
"Solvent": with respect to any Person, as of any date of
-------
determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability
of such Person on its debts as such debts become absolute and matured, (c)
such Person will not have, as of such date, an unreasonably small amount of
capital with which to conduct its business, and (d) such Person will be
able to pay its debts as they mature. For purposes of this definition, (i)
"debt" means liability on a "claim", (ii) "claim" means any (x) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured or
unsecured and (iii) the Borrower may assume, so long as no Default or Event
of Default shall have occurred and be continuing at the time such
assumption is made, that all or a portion of the outstanding Term Loans
will be refinanced at the maturity thereof.
"Specified Hedge Agreement": any Hedge Agreement (a) entered into by
-------------------------
(i) Holdings or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, as counterparty and (b) that has been designated by such
Lender and Holdings, by notice to the General Administrative Agent, as a
Specified Hedge Agreement. The designation of any Hedge Agreement as a
Specified Hedge Agreement shall not create in favor of the Lender or
affiliate thereof that is a party thereto any rights in connection with the
management or release of any Collateral or of the obligations of any
Guarantor under the Guarantee and Collateral Agreement.
"Specified Jurisdiction": any of (a) any country that is a member of
----------------------
the OECD and (b) Hong Kong, Singapore and South Korea.
37
"Sponsor": each of Xxxx Capital and Celerity Partners.
-------
"Stockholders Agreement": the Stockholders Agreement, dated as of
----------------------
July 30, 1999, among the stockholders of Holdings listed on the signature
pages thereof.
"Subsidiary": as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of Holdings other than any
--------------------
Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line Lender to
---------------------
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal
amount at any one time outstanding not to exceed U.S. $10,000,000.
"Swing Line Lender": Xxxxxx Commercial Paper Inc., in its capacity as
-----------------
the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
----------------
"Swing Line Participation Amount": as defined in Section 2.7.
-------------------------------
"Syndication Date": the earlier of September 30, 1999 or the date on
----------------
which the Syndication Agent completes the syndication of the Facilities and
the entities selected in such syndication process become parties to this
Agreement.
"Syndication Letter Agreement": the letter agreement, dated as of the
----------------------------
Closing Date, between Holdings, the Borrowers and the Syndication Agent and
the Arranger relating to the syndication of the Facilities.
"Tax Act": the Income Tax Act (Canada), as amended from time to time.
-------
"Term Loans": the collective reference the U.S. Term Loans and the
----------
Canadian Term Loans.
"Tranche A Term Loan": as defined in Section 2.1.
-------------------
38
"Tranche A Term Loan Commitment": as to any Lender, the obligation of
------------------------------
such Lender, if any, to make a Tranche A Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under
the heading "Tranche A Term Loan Commitment" opposite such Lender's name on
Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case
may be, in the Assignment and Acceptance pursuant to which such Lender
became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original aggregate amount of the Tranche
A Term Loan Commitments is U.S. $20,000,000.
"Tranche A Term Loan Facility": as defined in the definition of
----------------------------
"Facility" in this Section 1.1.
"Tranche A Term Loan Lender": each Lender that has a Tranche A Term
--------------------------
Loan Commitment or is the holder a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan Lender at
------------------------------
any time, the percentage which such Lender's Tranche A Term Loan Commitment
then constitutes of the aggregate Tranche A Term Loan Commitments (or, at
any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Tranche A Term Loans then outstanding
constitutes of the aggregate principal amount of the Tranche A Term Loans
then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
-------------------
"Tranche B Term Loan Commitment": as to Tranche B Term Loan Lender,
------------------------------
the obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Loan Commitment" opposite such Lender's
name on Schedule 1 to the Lender Addendum delivered by such Lender, or, as
the case may be, in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original aggregate amount of the Tranche
B Term Loan Commitments is U.S. $50,000,000.
"Tranche B Term Loan Facility": as defined in the definition of
----------------------------
"Facility" in this Section 1.1.
"Tranche B Term Loan Lender": each Lender that has a Tranche B Term
--------------------------
Loan Commitment or is the holder of a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
------------------------------
percentage which such Lender's Tranche B Term Loan Commitment then
constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Tranche B Term Loans then outstanding constitutes
of the aggregate principal amount of the Tranche B Term Loans then
outstanding).
39
"Tranche C Term Loan": as defined in Section 2.1.
-------------------
"Tranche C Term Loan Commitment": as to Tranche C Term Loan Lender,
------------------------------
the obligation of such Lender, if any, to make a Tranche C Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche C Term Loan Commitment" opposite such Lender's
name on Schedule 1 to the Lender Addendum delivered by such Lender, or, as
the case may be, in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original aggregate amount of the Tranche
C Term Loan Commitments is U.S. $10,000,000.
"Tranche C Term Loan Facility": as defined in the definition of
----------------------------
"Facility" in this Section 1.1.
"Tranche C Term Loan Lender": each Lender that has a Tranche C Term
--------------------------
Loan Commitment or is the holder of a Tranche C Term Loan.
"Tranche C Term Loan Percentage": as to any Lender at any time, the
------------------------------
percentage which such Lender's Tranche C Term Loan Commitment then
constitutes of the aggregate Tranche C Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the principal amount of
such Lender's Tranche C Term Loan then outstanding constitutes of the
aggregate principal amount of the Tranche C Term Loans then outstanding).
"Transactions": the transactions contemplated by the Transaction
------------
Documentation to be consummated on or before the Closing Date.
"Transaction Agreement": the Reorganization and Merger Agreement,
---------------------
dated as of July 26, 1999, by and among Holdings, the U.S. Borrower, the
Canadian Borrower, EMSIcon Investments, LLC and the stockholders listed
therein.
"Transaction Documentation": collectively, each Transaction Agreement
-------------------------
and each "Document" (as defined in the Transaction Agreement) and all
schedules, exhibits, annexes and amendments thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case, as amended, supplemented or otherwise modified
from time to time.
"Transferee": as defined in Section 5.15.
----------
"Type": (a) as to any U.S. Facility Loan, its nature as a U.S. Base
----
Rate Loan or a Eurodollar Loan and (b) as to any Canadian Facility Loan,
its nature as a Eurodollar Loan, a Canadian Base Rate Loan or a Canadian
Prime Rate Loan.
"U.S. Base Rate": for any day, a rate per annum (rounded upwards, if
--------------
necessary, to the next 1/16 of 1%) equal to the greater of (a) the U.S.
Prime Rate in effect on such
40
day and (b) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "U.S. Prime Rate" shall mean the rate of
---------------
interest per annum publicly announced from time to time by the U.S.
Reference Lender as its prime or base rate in effect at its principal
office in New York City (the U.S. Prime Rate not being intended to be the
lowest rate of interest charged by the U.S. Reference Lender in connection
with extensions of credit to debtors). Any change in the Base Rate due to
a change in the U.S. Prime Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such
change in the U.S. Prime Rate or the Federal Funds Effective Rate,
respectively.
"U.S. Base Rate Loans": U.S. Facility Loans for which the applicable
--------------------
rate of interest is based upon the Base Rate.
"U.S. Borrower": as defined in the Preamble.
-------------
"U.S. Dollar Equivalent": with respect to an amount denominated in
----------------------
Canadian Dollars, the equivalent in U.S. Dollars determined at the Exchange
Rate.
"U.S. Dollars" and "U.S.$": lawful currency of the United States of
------------ -----
America.
"U.S. Facilities": the collective reference to the U.S. Term Loan
---------------
Facilities and the U.S. Revolving Credit Facility.
"U.S. Facility Loans": the collective reference to the U.S. Term
-------------------
Loans, the U.S. Revolving Credit Loans and the Swing Line Loans.
"U.S. Funding Office": the office specified from time to time by the
-------------------
General Administrative Agent as its funding office by notice to the U.S.
Borrower and the U.S. Lenders.
"U.S. L/C Commitment": U.S.$2,000,000.
-------------------
"U.S. L/C Obligations": at any time, an amount equal to the sum of
--------------------
(a) the aggregate then undrawn and unexpired amount of the then outstanding
U.S. Letters of Credit and (b) the aggregate amount of drawings under U.S.
Letters of Credit that have not then been reimbursed pursuant to Section
5.6.
"U.S. L/C Participant": with respect to each U.S. Letter of Credit,
--------------------
each U.S. Revolving Credit Lender other than the Issuing Lender in respect
of such Letter of Credit.
"U.S. Letter of Credit": as defined in Section 6.1.
---------------------
"U.S. Issuing Lender": any U.S. Revolving Credit Lender selected by
-------------------
the U.S. Borrower, with the consent of such Lender and the General
Administrative Agent, to issue U.S. Letters of Credit.
41
"U.S. Payment Office": the office specified from time to time by the
-------------------
General Administrative Agent as its payment office by notice to the U.S.
Borrower and the U.S. Lenders.
"U.S. Reference Lender": Bankers Trust Company.
---------------------
"U.S. Reimbursement Obligation": the obligation of the U.S. Borrower
-----------------------------
to reimburse each Issuing Lender pursuant to Section 6.5 for amounts drawn
under U.S. Letters of Credit issued by such U.S. Issuing Lender.
"U.S. Revolving Credit Commitment": as to any Lender, the obligation
--------------------------------
of such Lender, if any, to make U.S. Revolving Credit Loans and participate
in Swing Line Loans and U.S. Letters of Credit, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"U.S. Revolving Credit Commitment" opposite such Lender's name on Schedule
1 to the Lender Addendum delivered by such Lender, or, as the case may be,
in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the
terms hereof. The original aggregate amount of the U.S. Revolving Credit
Commitments is U.S. $45,000,000.
"U.S. Revolving Credit Commitment Period": the period from and
---------------------------------------
including the Closing Date to the U.S. Revolving Credit Termination Date.
"U.S. Revolving Credit Facility": as defined in the definition of
------------------------------
"Facility" in this Section 1.1.
"U.S. Revolving Credit Lender": each Lender that has a U.S. Revolving
----------------------------
Credit Commitment or that is the holder of U.S. Revolving Credit Loans.
"U.S. Revolving Credit Loans": as defined in Section 2.4.
---------------------------
"U.S. Revolving Credit Percentage": as to any U.S. Revolving Credit
--------------------------------
Lender at any time, the percentage which such Lender's U.S. Revolving
Credit Commitment then constitutes of the Total U.S. Revolving Credit
Commitments (or, at any time after the U.S. Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate amount
of such Lender's U.S. Revolving Extensions of Credit then outstanding
constitutes of the Aggregate U.S. Revolving Extensions of Credit of all
U.S. Revolving Credit Lenders then outstanding).
"U.S. Revolving Credit Termination Date": the fifth anniversary of
--------------------------------------
the Closing Date.
"U.S. Revolving Extensions of Credit": as to any U.S. Revolving
-----------------------------------
Credit Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all U.S. Revolving Credit Loans made by such Lender
then outstanding, (b) such Lender's U.S.
42
Revolving Credit Percentage of the U.S. L/C Obligations then outstanding
and (c) such Lender's U.S. Revolving Credit Percentage of the aggregate
principal amount of Swing Line Loans then outstanding.
"U.S. Term Loan Facilities": the collective reference to the Tranche
-------------------------
A Term Loan Facility, the Tranche B Term Loan Facility and the Tranche C
Term Loan Facility.
"U.S. Term Loan Lenders": the collective reference to the Tranche A
----------------------
Term Loan Lenders, the Tranche B Term Loan Lenders and the Tranche C Term
Loan Lenders.
"U.S. Term Loans": the collective reference to the Tranche A Term
---------------
Loans, Tranche B Term Loans and Tranche C Term Loans.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
-----------------------
the Capital Stock of which (other than (i) directors' qualifying shares
required by law, (ii) other nominal amounts of shares or other equity
interests required by law to be held other than by such Person, or (iii)
Exchangeable Shares) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
---------------------------------
a Wholly Owned Subsidiary of Holdings.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF U.S. FACILITIES COMMITMENTS
2.1 U.S. Term Loan Commitments. (a) Subject to the terms and
--------------------------
conditions hereof, the Tranche A Term Loan Lenders severally agree to make term
loans (each, a "Tranche A Term Loan") to the U.S. Borrower on the Closing Date
-------------------
in an amount for each Tranche A Term
43
Loan Lender not to exceed the amount of the Tranche A Term Loan Commitment of
such Lender.
(b) Subject to the terms and conditions hereof, the Tranche B Term
Loan Lenders severally agree to make term loans (each, a "Tranche B Term Loan")
-------------------
to the U.S. Borrower on the Closing Date in an amount for each Tranche B Term
Loan Lender not to exceed the amount of the Tranche B Term Loan Commitment of
such Lender.
(c) Subject to the terms and conditions hereof, the Tranche C Term
Loan Lenders severally agree to make term loans (each, a "Tranche C Term Loan")
-------------------
to the U.S. Borrower on the Closing Date in an amount for each Tranche C Term
Loan Lender not to exceed the amount of the Tranche C Term Loan Commitment of
such Lender.
(d) The U.S. Term Loans shall be denominated in U.S. Dollars and may
from time to time be Eurodollar Loans or U.S. Base Rate Loans, as determined by
the U.S. Borrower and notified to the General Administrative Agent in accordance
with Sections 2.2 and 7.2.
2.2 Procedure for U.S. Term Loan Borrowing. The U.S. Borrower shall
--------------------------------------
give the General Administrative Agent irrevocable notice (which notice must be
received by the General Administrative Agent prior to 12:00 Noon, New York City
time, one Business Day prior to the anticipated Closing Date) requesting that
the U.S. Term Loan Lenders make the U.S. Term Loans on the Closing Date and
specifying the amount to be borrowed. The U.S. Term Loans made on the Closing
Date shall initially be U.S. Base Rate Loans, and prior to the Syndication Date
no U.S. Term Loan may be converted into or continued as a Eurodollar Loan having
an Interest Period in excess of one month. Upon receipt of such notice, the
General Administrative Agent shall promptly notify each U.S. Term Loan Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date
each U.S. Term Loan Lender shall make available to the General Administrative
Agent at the U.S. Funding Office an amount in immediately available funds equal
to the U.S. Term Loan or U.S. Term Loans to be made by such Lender. The General
Administrative Agent shall make available to the U.S. Borrower the aggregate of
the amounts made available to the General Administrative Agent by the U.S. Term
Loan Lenders, in like funds as received by the General Administrative Agent.
2.3 Repayment of U.S. Term Loans. (a) The Tranche A Term Loan of
----------------------------
each Tranche A Lender shall mature in 16 consecutive quarterly installments,
payable on the last day of each March, June, September and December, commencing
on September 30, 2000, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the percentage set forth
below opposite such installment of the initial aggregate principal amount of
Tranche A Term Loans:
Installment Percentage
----------- ----------
September 30, 2000 2.5%
December 31, 2000 2.5%
March 31, 2001 2.5%
June 30, 2001 2.5%
September 30, 2001 5.0%
44
December 31, 2001 5.0%
March 31, 2002 5.0%
June 30, 2002 5.0%
September 30, 2002 7.5%
December 31, 2002 7.5%
March 31, 2003 7.5%
June 30, 2003 7.5%
September 30, 2003 10%
December 31, 2003 10%
March 31, 2004 10%
June 30, 2004 10%
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in
22 consecutive quarterly installments, payable on the last day of each March,
June, September and December, commencing on September 30, 2000, each of which
shall be in an amount equal to such Lender's Tranche B Term Loan Percentage
multiplied by the percentage set forth below opposite such installment of the
initial aggregate principal amount of Tranche A Term Loans:
Installment Percentage
----------- ----------
September 30, 2000 .25%
December 31, 2000 .25%
March 31, 2001 .25%
June 30, 2001 .25%
September 30, 2001 .25%
December 31, 2001 .25%
March 31, 2002 .25%
June 30, 2002 .25%
September 30, 2002 .25%
December 31, 2002 .25%
March 31, 2003 .25%
June 30, 2003 .25%
September 30, 2003 .25%
December 31, 2003 .25%
March 31, 2004 .25%
June 30, 2004 .25%
September 30, 2004 16.0%
December 31, 2004 16.0%
March 31, 2005 16.0%
June 30, 2005 16.0%
September 30, 2005 16.0%
December 31, 2005 16.0%
(c) The Tranche C Term Loan of each Tranche C Lender shall mature in
one installment payable on September 30, 2006.
45
2.4 U.S. Revolving Credit Commitments. (a) Subject to the terms and
---------------------------------
conditions hereof, the U.S. Revolving Credit Lenders severally agree to make
revolving credit loans ("U.S. Revolving Credit Loans") to the U.S. Borrower from
---------------------------
time to time during the U.S. Revolving Credit Commitment Period so long as,
after giving effect thereto, (A) the Available U.S. Revolving Credit Commitment
of each U.S. Revolving Credit Lender would be equal to or greater than zero and
(B) the Aggregate U.S. Revolving Extensions of Credit would not exceed the
Borrowing Base of the U.S. Borrower. During the U.S. Revolving Credit Commitment
Period the U.S. Borrower may use the U.S. Revolving Credit Commitments by
borrowing, prepaying the U.S. Revolving Credit Loans and Swing Line Loans in
whole or in part, and reborrowing, and by causing the insurance of U.S. Letters
of Credit pursuant to Section 6, all in accordance with the terms and conditions
hereof. The U.S. Revolving Credit Loans shall be denominated in U.S. Dollars and
may from time to time be Eurodollar Loans or Base Rate Loans, as determined by
the U.S. Borrower and notified to the General Administrative Agent in accordance
with Sections 2.5 and 7.2, provided that no U.S. Revolving Credit Loan shall be
--------
made as a Eurodollar Loan after the day that is one month prior to the U.S.
Revolving Credit Termination Date.
(b) The U.S. Revolving Credit Loans shall be denominated in U.S.
Dollars and may from time to time be Eurodollar Loans or U.S. Base Rate Loans,
as determined by the U.S. Borrower and notified to the General Administrative
Agent pursuant to Sections 2.5 and 7.2.
(c) The U.S. Borrower shall repay all outstanding U.S. Revolving
Credit Loans on the U.S. Revolving Credit Termination Date.
2.5 Procedure for U.S. Revolving Credit Borrowing. The U.S. Borrower
---------------------------------------------
may borrow U.S. Revolving Credit Loans under the U.S. Revolving Credit
Commitments on any Business Day during the U.S. Revolving Credit Commitment
Period, provided that the U.S. Borrower shall give the General Administrative
--------
Agent irrevocable notice (which notice must be received by the General
Administrative Agent prior to 1:00 P.M., New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of U.S.
Base Rate Loans), specifying (i) the amount and Type of U.S. Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the length of the initial Interest Period therefor. Any U.S.
Revolving Credit Loans made on the Closing Date shall initially be U.S. Base
Rate Loans, and prior to the Syndication Date no U.S. Revolving Credit Loan may
be made as, converted into or continued as a Eurodollar Loan having an Interest
Period in excess of one month. Each borrowing of U.S. Revolving Credit Loans
under the U.S. Revolving Credit Commitments shall be in an amount equal to (x)
in the case of U.S. Base Rate Loans, U.S.$250,000 or integral multiples of
$100,000 in excess thereof (or, if the then aggregate Available U.S. Revolving
Credit Commitments are less than U.S.$250,000, such lesser amount) and (y) in
the case of Eurodollar Loans, U.S.$1,000,000 or integral multiples of $500,000
in excess thereof; provided, that the Swing Line Lender may request, on behalf
--------
of the U.S. Borrower, borrowings of U.S. Base Rate Loans under the U.S.
Revolving Credit Commitments in other amounts pursuant to Section 2.7. Upon
receipt of any such notice from the U.S. Borrower, the General Administrative
Agent shall promptly notify each U.S. Revolving Credit Lender
46
thereof. Each U.S. Revolving Credit Lender will make its U.S. Revolving Credit
Percentage of the amount of each borrowing of U.S. Revolving Credit Loans
available to the General Administrative Agent for the account of the U.S.
Borrower at the U.S. Funding Office prior to 12:00 Noon, New York City time, on
the Borrowing Date requested by the U.S. Borrower in funds immediately available
to the General Administrative Agent. Such borrowing will then be made available
to the U.S. Borrower by the General Administrative Agent in like funds as
received by the General Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and conditions
---------------------
hereof, the Swing Line Lender agrees that, during the U.S. Revolving Credit
Commitment Period, it will make available to the U.S. Borrower in the form of
swing line loans ("Swing Line Loans") a portion of the credit otherwise
----------------
available to the U.S. Borrower under the U.S. Revolving Credit Commitments;
provided that (i) the aggregate principal amount of Swing Line Loans outstanding
--------
at any time shall not exceed the Swing Line Commitment then in effect
(notwithstanding that the Swing Line Loans outstanding at any time, when
aggregated with the Swing Line Lender's other outstanding U.S. Revolving Credit
Loans hereunder, may exceed the Swing Line Commitment then in effect or such
Swing Line Lender's U.S. Revolving Credit Commitment then in effect) and (ii)
the U.S. Borrower shall not request, and the Swing Line Lender shall not make,
any Swing Line Loan unless, after giving effect to the making of such Swing Line
Loan, (A) the Available U.S. Revolving Credit Commitment of each U.S. Revolving
Credit Lender would be equal to or greater than zero, and (B) the Aggregate U.S.
Revolving Extensions of Credit would not exceed the Borrowing Base of the U.S.
Borrower. During the U.S. Revolving Credit Commitment Period, the U.S. Borrower
may use the Swing Line Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof. Swing Line Loans shall be
denominated in U.S. Dollars and shall be U.S. Base Rate Loans only.
(b) The U.S. Borrower shall repay all outstanding Swing Line Loans on
the U.S. Revolving Credit Termination Date. The U.S. Borrower shall also prepay
all Swing Line Loans then outstanding simultaneously with each borrowing of U.S.
Revolving Credit Loans.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans.
-----------------------------------------------------------------
(a) The U.S. Borrower may borrow under the Swing Line Commitment on any Business
Day during the U.S. Revolving Credit Commitment Period, provided, the U.S.
--------
Borrower shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:30 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date. Each borrowing under the Swing Line Commitment shall be in an
amount equal to U.S.$100,000 or a whole multiple of U.S.$50,000 in excess
thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in the borrowing notice in respect of any Swing Line Loan, the Swing
Line Lender shall make available to the General Administrative Agent at the U.S.
Funding Office an amount in immediately available funds equal to the amount of
such Swing Line Loan. The General Administrative Agent shall make the proceeds
of such Swing Line Loan available to the U.S. Borrower on such Borrowing Date in
like funds as received by the General Administrative Agent.
47
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may (and not less frequently than bi-weekly,
shall), on behalf of the U.S. Borrower (which hereby irrevocably directs the
Swing Line Lender to act on its behalf), on one Business Day's notice given by
the Swing Line Lender no later than 12:00 Noon, New York City time, request each
U.S. Revolving Credit Lender to make, and each U.S. Revolving Credit Lender
hereby agrees to make, a U.S. Revolving Credit Loan (which shall be initially a
U.S. Base Rate Loan), in an amount equal to such U.S. Revolving Credit Lender's
U.S. Revolving Credit Percentage of the aggregate amount of the Swing Line Loans
(the "Refunded Swing Line Loans") outstanding on the date of such notice, to
-------------------------
repay the Swing Line Lender. Each U.S. Revolving Credit Lender shall make the
amount of such U.S. Revolving Credit Loan available to the General
Administrative Agent at the U.S. Funding Office in immediately available funds,
not later than 10:00 A.M., New York City time, one Business Day after the date
of such notice. The proceeds of such U.S. Revolving Credit Loans shall be made
immediately available by the General Administrative Agent to the Swing Line
Lender for application by the Swing Line Lender to the repayment of the Refunded
Swing Line Loans.
(c) If prior to the time a U.S. Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 13(f) shall have occurred and be continuing with respect to the U.S.
Borrower, or if for any other reason, as determined by the Swing Line Lender in
its sole discretion, U.S. Revolving Credit Loans may not be made as contemplated
by Section 2.7(b), each U.S. Revolving Credit Lender shall, on the date such
U.S. Revolving Credit Loan was to have been made pursuant to the notice referred
to in Section 2.7(b) (the "Refunding Date"), purchase for cash an undivided
--------------
participating interest in the then outstanding Swing Line Loans by paying to the
Swing Line Lender an amount (the "Swing Line Participation Amount") equal to (i)
-------------------------------
such U.S. Revolving Credit Lender's U.S. Revolving Credit Percentage times (ii)
-----
the sum of the aggregate principal amount of Swing Line Loans then outstanding
which were to have been repaid with such U.S. Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has received
from any U.S. Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line Lender receives any payment on account of the Swing Line
Loans, the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
--- ----
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
-------- -------
Swing Line Lender is required to be returned, such U.S. Revolving Credit Lender
will return to the Swing Line Lender any portion thereof previously distributed
to it by the Swing Line Lender.
(e) Each U.S. Revolving Credit Lender's obligation to make the U.S.
Revolving Credit Loans referred to in Section 2.7(b) and to purchase
participating interests pursuant to Section 2.7(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense or other right
which such U.S. Revolving Credit Lender or the U.S. Borrower may have against
the Swing Line
48
Lender, the U.S. Borrower or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of a Default or an Event of Default or the failure
to satisfy any of the other conditions specified in Section 9; (iii) any adverse
change in the condition (financial or otherwise) of Holdings or the U.S.
Borrower; (iv) any breach of this Agreement or any other Loan Document by the
U.S. Borrower, any other Loan Party or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.8 Promise to Pay U.S. Facility Loans; Evidence of Debt. (a) The
----------------------------------------------------
U.S. Borrower hereby unconditionally promises to pay to the General
Administrative Agent for the account of the appropriate U.S. Revolving Credit
Lender or U.S. Term Loan Lender, as the case may be, (i) the then unpaid
principal amount of each U.S. Revolving Credit Loan of such U.S. Revolving
Credit Lender on the U.S. Revolving Credit Termination Date (or on such earlier
date on which the Loans become due and payable pursuant to Section 13), (ii) the
then unpaid principal amount of each Swing Line Loan of such Swing Line Lender
on the U.S. Revolving Credit Termination Date (or on such earlier date on which
the Loans become due and payable pursuant to Section 13) and (iii) the principal
amount of each U.S. Term Loan of such U.S. Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 13).
The U.S. Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 7.1.
(b) Each U.S. Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the U.S. Borrower to
such U.S. Lender resulting from each U.S. Facility Loan of such U.S. Lender from
time to time, including the amounts of principal and interest payable and paid
to such U.S. Lender from time to time under this Agreement.
(c) The General Administrative Agent, on behalf of the U.S. Borrower,
shall maintain the Register pursuant to Section 15.6(e), and a subaccount
therein for each U.S. Lender, in which shall be recorded (i) the amount of each
U.S. Facility Loan made hereunder and any Note evidencing such Loan, the Type of
such Loan and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the U.S.
Borrower to each U.S. Lender hereunder and (iii) both the amount of any sum
received by the General Administrative Agent hereunder from the U.S. Borrower
and each U.S. Lender's share thereof.
(d) The entries made in the Register and the accounts of each U.S.
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
----- -----
obligations of the U.S. Borrower therein recorded absent manifest error;
provided, however, that the failure of any U.S. Lender or the General
-------- -------
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the U.S. Borrower to
repay (with applicable interest) the Loans made to the U.S. Borrower by such
U.S. Lender in accordance with the terms of this Agreement.
49
(e) The U.S. Borrower agrees that, upon the request to the General
Administrative Agent by any U.S. Lender, the U.S. Borrower will execute and
deliver to such U.S. Lender a promissory note of the U.S. Borrower evidencing
any U.S. Term Loans, U.S. Revolving Credit Loans or Swing Line Loans, as the
case may be, of such U.S. Lender, substantially in the forms of Exhibit G-1, G-2
or G-3, respectively, with appropriate insertions as to date and principal
amount.
2.9 Commitment Fees, etc. The U.S. Borrower agrees to pay to the
---------------------
General Administrative Agent for the account of each U.S. Revolving Credit
Lender a commitment fee for the period from and including the Closing Date to
the last day of the U.S. Revolving Credit Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available U.S. Revolving
Credit Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the U.S. Revolving Credit Termination Date, commencing on the
first of such dates to occur after the date hereof.
2.10 Termination or Reduction of U.S. Revolving Credit Commitments.
--------------------------------------------------------------
The U.S. Borrower shall have the right, upon not less than three Business Days'
notice to the General Administrative Agent, to terminate the U.S. Revolving
Credit Commitments or, from time to time, to reduce the aggregate amount of the
U.S. Revolving Credit Commitments; provided that no such termination or
reduction of U.S. Revolving Credit Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the U.S. Revolving Credit Loans
and Swing Line Loans made on the effective date thereof, the U.S. Revolving
Extensions of Credit would exceed the U.S. Revolving Credit Commitments. Any
such reduction shall be in an amount equal to U.S.$1,000,000, or a whole
multiple thereof, and shall reduce permanently the U.S. Revolving Credit
Commitments then in effect.
SECTION 3. AMOUNT AND TERMS OF
CANADIAN TERM LOAN COMMITMENTS
3.1 Canadian Term Loan Commitments. (a) Subject to the terms and
------------------------------
conditions hereof, the Canadian Term Loan Lenders severally agree to make term
loans denominated in U.S. Dollars (each, a "Canadian Term Loan") to the Canadian
------------------
Borrower on the Closing Date in an amount for each Canadian Term Loan Lender not
to exceed the amount of the Canadian Term Loan Commitment of such Canadian Term
Loan Lender.
(b) The Canadian Term Loans may from time to time be Eurodollar Loans
or Canadian Base Rate Loans, as determined by the Canadian Borrower and notified
to the Administrative Agent in accordance with Sections 4.2 and 7.2.
3.2 Procedure for Canadian Term Loan Borrowing. The Canadian
------------------------------------------
Borrower shall give the Administrative Agents irrevocable notice (which notice
must be received by both Administrative Agents prior to 10:00 A.M., Toronto
time, one Business Day prior to the anticipated Closing Date) requesting that
the Canadian Term Loan Lenders make the Canadian Term Loans on the Closing Date
and specifying the amount to be borrowed. The Canadian Term
50
Loans made on the Closing Date shall initially be Canadian Base Rate Loans, and
prior to the Syndication Date no Canadian Term Loan may be converted into or
continued as a Eurodollar Loan having an Interest Period in excess of one month.
Upon receipt of such notice the Canadian Administrative Agent shall promptly
notify each Canadian Term Loan Lender thereof. Not later than 12:00 Noon,
Toronto time, on the Closing Date each Canadian Term Loan Lender shall make
available to the Canadian Administrative Agent at the Canadian Funding Office an
amount in immediately available funds equal to the Canadian Term Loan to be made
by such Lender. The Canadian Administrative Agent shall make available to the
Canadian Borrower the aggregate of the amounts made available to the Canadian
Administrative Agent by the Canadian Term Loan Lenders pursuant to this Section,
in like funds as received by the Canadian Administrative Agent.
3.3 Repayment of Canadian Term Loans. The Canadian Term Loan of each
--------------------------------
Canadian Term Loan Lender shall mature in 16 consecutive quarterly installments,
payable on the last day of each March, June, September and December, commencing
on September 30, 2000, each of which shall be in an amount equal to such
Canadian Term Loan Lender's Canadian Term Loan Percentage multiplied by the
percentage set forth below opposite such installment of the initial aggregate
principal amount of Canadian Term Loans:
Installment Percentage
----------- ----------
September 30, 2000 2.5%
December 31, 2000 2.5%
March 31, 2001 2.5%
June 30, 2001 2.5%
September 30, 2001 5.0%
December 31, 2001 5.0%
March 31, 2002 5.0%
June 30, 2002 5.0%
September 30, 2002 7.5%
December 31, 2002 7.5%
March 31, 2003 7.5%
June 30, 2003 7.5%
September 30, 2003 10%
December 31, 2003 10%
March 31, 2004 10%
June 30, 2004 10%
3.4 Promise to Pay Canadian Term Loans; Evidence of Debt. (a) The
----------------------------------------------------
Canadian Borrower hereby unconditionally promises to pay to the Canadian
Administrative Agent for the account of the appropriate Canadian Term Loan
Lender the then unpaid principal amount of each Canadian Term Loan of such
Canadian Term Loan Lender in installments according to the amortization schedule
set forth in Section 3.3 (or on such earlier date on which the Loans become due
and payable pursuant to Section 13). The Canadian Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Canadian Term Loans
from time to time
51
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 7.1.
(b) Each Canadian Term Loan Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Canadian Borrower to such Canadian Term Loan Lender resulting from the Canadian
Term Loan of such Canadian Term Loan Lender from time to time, including the
amounts of principal and interest payable and paid to such Canadian Term Loan
Lender from time to time under this Agreement.
(c) The General Administrative Agent and the Canadian Administrative
Agent, on behalf of the Canadian Borrower, shall maintain the Register pursuant
to Section 15.6(e), and a subaccount therein for each Canadian Term Loan Lender,
in which shall be recorded (i) the amount of each Canadian Term Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Canadian Borrower to each
Canadian Term Loan Lender in respect of Canadian Term Loans and (iii) both the
amount of any sum received by the Canadian Administrative Agent hereunder from
the Canadian Borrower in respect of Canadian Term Loans and each Canadian Term
Loan Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 4.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
----- -----
obligations of the Canadian Borrower therein recorded absent manifest error;
provided, however, that the failure of any Canadian Term Loan Lender or the
-------- -------
Canadian Administrative Agent to maintain the Register or any such account, or
any error therein, shall not in any manner affect the obligation of the Canadian
Borrower to repay (with applicable interest) the Canadian Term Loans made to the
Canadian Borrower by such Canadian Term Loan Lender in accordance with the terms
of this Agreement.
(e) The Canadian Borrower agrees that, upon the request to the
Canadian Administrative Agent by any Canadian Term Loan Lender, the Canadian
Borrower will execute and deliver to such Canadian Term Loan Lender a promissory
note of the Canadian Borrower evidencing the Canadian Term Loan of such Canadian
Term Lender, substantially in the form of Exhibit G-4, with appropriate
insertions as to date and principal amount.
SECTION 4. [RESERVED]
SECTION 5. AMOUNT AND TERMS OF THE CANADIAN REVOLVING CREDIT
COMMITMENTS; ACCEPTANCES
5.1 Canadian Revolving Credit Commitments. (a) Subject to the terms
-------------------------------------
and conditions hereof, each Canadian Revolving Credit Lender severally agrees to
make revolving credit loans (each, a "Canadian Revolving Credit Loan") to the
------------------------------
Canadian Borrower from time to time during the Canadian Revolving Credit
Commitment Period so long as after giving effect thereto (A) the Available
Canadian Revolving Credit Commitment of each Canadian Revolving
52
Credit Lender would be greater than or equal to zero and (B) the Aggregate
Canadian Revolving Extensions of Credit of all Lenders would not exceed the
Borrowing Base of the Canadian Borrower. During the Canadian Revolving Credit
Commitment Period, the Canadian Borrower may use the Canadian Revolving Credit
Commitments by borrowing, repaying the Canadian Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Canadian Revolving Credit Loans may be denominated in U.S.
Dollars or Canadian Dollars, at the option of the Canadian Borrower. The
Canadian Revolving Credit Loans denominated in Canadian Dollars shall be
Canadian Dollar Prime Rate Loans, and the Canadian Revolving Credit Loans
denominated in U.S. Dollars shall be Canadian Base Rate Loans or Eurodollar
Loans, at the option of the Canadian Borrower.
5.2 Procedure for Canadian Revolving Credit Borrowing. The Canadian
-------------------------------------------------
Borrower may borrow under the Canadian Revolving Credit Commitments during the
Revolving Credit Commitment Period on any Business Day, provided that the
--------
Canadian Borrower shall give the Canadian Administrative Agent irrevocable
notice (which notice must be received by the Canadian Administrative Agent prior
to 2:00 P.M., Toronto time, at least one Business Day prior to the requested
Borrowing Date, in the case of a borrowing of Canadian Base Rate Loans or
Canadian Dollar Prime Rate Loans, or three Business Days prior to the requested
Borrowing Date, in the case of a borrowing of Eurodollar Loans), specifying (i)
the amount and Type of Loans to be borrowed and (ii) the requested Borrowing
Date. Any Canadian Revolving Credit Loans denominated in U.S. Dollars made on
the Closing Date shall be Canadian Base Rate Loans, and no such Loan may be
converted into a Eurodollar Loan having an Interest Period longer than 60 days
prior to the Syndication Date. Each borrowing in Canadian Dollars under the
Canadian Revolving Credit Commitments shall be in an amount equal to C$300,000
or a whole multiple of C$100,000 in excess thereof, and each borrowing in U.S.
Dollars under the Canadian Revolving Credit Commitments shall be in an amount
equal to U.S.$250,000 or a whole multiple of U.S.$100,000 in excess thereof (or,
in each case, if the then Aggregate Available Canadian Revolving Credit
Commitments are less than C$300,000 or U.S.$250,000, as the case may be, such
lesser amount). Upon receipt of any such notice from the Canadian Borrower, the
Canadian Administrative Agent shall promptly notify the General Administrative
Agent and each Canadian Revolving Credit Lender thereof. Not later than 12:00
Noon, Toronto time, on each requested Borrowing Date each Canadian Revolving
Credit Lender shall make an amount equal to its Canadian Revolving Credit
Commitment Percentage of the principal amount of Canadian Revolving Credit Loans
requested to be made on such Borrowing Date available to the Canadian
Administrative Agent at the Canadian Funding in Canadian Dollars or U.S.
Dollars, as the case may be, and in immediately available funds. The Canadian
Administrative Agent shall on such date make such amount available to the
Canadian Borrower in like funds as received by the Canadian Administrative
Agent.
5.3 Repayment of Canadian Revolving Credit Loans; Evidence of Debt.
--------------------------------------------------------------
(a) The Canadian Borrower hereby unconditionally promises to pay to the
Canadian Administrative Agent for the account of each Canadian Revolving Credit
Lender the then unpaid principal amount of each Canadian Revolving Credit Loan
of such Canadian Revolving Credit Lender on the Canadian
53
Revolving Credit Termination Date and on such other date(s) and in such other
amounts as may be required from time to time pursuant to this Agreement. The
Canadian Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Canadian Revolving Credit Loans from time to time outstanding
until payment thereof in full at the rates per annum, and on the dates, set
forth in Section 7.1.
(b) Each Canadian Revolving Credit Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Canadian Borrower to such Canadian Revolving Credit Lender
resulting from each Canadian Revolving Credit Loan of such Canadian Revolving
Credit Lender from time to time, including the amounts of principal and interest
payable thereon and paid to such Canadian Revolving Credit Lender from time to
time under this Agreement.
(c) The Canadian Administrative Agent (together with the General
Administrative Agent), on behalf of the Canadian Borrower, shall maintain the
Register pursuant to Section 15.6(d), and a subaccount therein for each Canadian
Revolving Credit Lender, in which shall be recorded (i) the date and amount of
each Canadian Revolving Credit Loan made hereunder, (ii) the date and amount of
any principal or interest due and payable or to become due and payable from the
Canadian Borrower to each Canadian Revolving Credit Lender hereunder in respect
of the Canadian Revolving Credit Loans and (iii) both the date and amount of any
sum received by the Canadian Administrative Agent hereunder from the Canadian
Borrower in respect of the Canadian Revolving Credit Loans and each Canadian
Revolving Credit Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Canadian Revolving Credit Lender maintained pursuant to Section 5.3(b) shall, to
the extent permitted by applicable law, be prima facie evidence of the existence
----- -----
and amounts of the obligations of the Canadian Borrower therein recorded absent
manifest error; provided, however, that the failure of any Canadian Revolving
-------- -------
Credit Lender or the Administrative Agents to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Canadian Borrower to repay (with applicable interest) the Canadian Revolving
Credit Loans made to the Canadian Borrower by such Canadian Revolving Credit
Lender in accordance with the terms of this Agreement.
(e) The Canadian Borrower agrees that, upon the request to the
Canadian Administrative Agent by any Canadian Revolving Credit Lender, it will
execute and deliver to such Canadian Revolving Credit Lender a promissory note
of the Canadian Borrower evidencing the Canadian Revolving Credit Loans of such
Canadian Revolving Credit Lender, substantially in the form of Exhibit G-5 with
appropriate insertions as to date and principal amount.
5.4 Termination or Reduction of Canadian Revolving Credit
-----------------------------------------------------
Commitments. The Canadian Borrower shall have the right, upon not less than one
-----------
Business Days' notice to the Canadian Administrative Agent, to terminate the
Canadian Revolving Credit Commitments or, from time to time, to reduce the
amount of the Canadian Revolving Credit Commitments; provided that no such
--------
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Loans made on the effective date thereof, the
Available Canadian
54
Revolving Credit Commitments would be less than zero. Any such reduction shall
be in an amount equal to U.S.$250,000 or a whole multiple of U.S.$100,000 in
excess thereof and shall reduce permanently the Canadian Revolving Credit
Commitments then in effect.
5.5 Commitment Fees. The Canadian Borrower agrees to pay to the
---------------
Canadian Administrative Agent for the account of each Canadian Revolving Credit
Lender a commitment fee, payable in U.S. Dollars, for the period from and
including the Closing Date to the last day of the Canadian Revolving Credit
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Canadian Revolving Credit Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on the Canadian
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof. For purposes of this Section, calculations of the
Available Canadian Revolving Credit Commitment of each Lender for each day
during the relevant period shall be made using the Exchange Rate in effect on
the first day of such period.
5.6 Acceptance Commitments. (a) Subject to the terms and conditions
----------------------
hereof, each Canadian Revolving Credit Lender severally agrees to create
Acceptances for the Canadian Borrower on any Business Day during the Canadian
Revolving Credit Commitment Period by accepting Drafts drawn by the Canadian
Borrower so long as after giving effect to such acceptance, (i) the Available
Canadian Revolving Credit Commitment of such Canadian Revolving Credit Lender
would be greater than or equal to zero and (ii) the Aggregate Canadian Revolving
Extensions Credit of all Lenders would not exceed the Borrowing Base of the
Canadian Borrower.
(b) The Canadian Borrower may utilize the Canadian Revolving Credit
Commitments for the creation of Acceptances by authorizing each Canadian
Revolving Credit Lender in the manner provided for in Section 5.7(b) to draw
Drafts on such Canadian Revolving Credit Lender and having such Drafts accepted
pursuant to Section 5.7, paying its obligations with respect thereto pursuant to
Section 5.11, and again, from time to time, authorizing Drafts to be drawn on
the Canadian Revolving Credit Lenders and having them presented for acceptance,
all in accordance with the terms and conditions hereof.
(c) For the purposes of this Agreement, all Acceptances shall be
considered a utilization of the Canadian Revolving Credit Commitments in an
amount equal to the undiscounted face amount of such Acceptance.
5.7 Creation of Acceptances. (a) The Canadian Borrower may request
-----------------------
the creation of Acceptances hereunder by submitting to the Canadian
Administrative Agent at the Canadian Funding Office prior to 11:00 A.M., Toronto
time, two Business Days prior to the requested Borrowing Date, (i) a request for
acceptances (each, a "Request for Acceptances") completed in a manner and in
-----------------------
form and substance reasonably satisfactory to the Canadian Administrative Agent
and specifying, among other things, the Borrowing Date, maturity and face amount
of the Drafts to be accepted and discounted, (ii) upon the request of the
Canadian Administrative Agent on behalf of the Canadian Revolving Credit
Lenders, a sufficient number of
55
Drafts to be drawn on the Canadian Revolving Credit Lenders, to be appropriately
completed in accordance with Section 5.7(d) and (iii) such other certificates,
documents and other papers and information as the Canadian Administrative Agent
may reasonably request. Upon receipt of any such Request for Acceptances, the
Canadian Administrative Agent shall promptly notify each Canadian Revolving
Credit Lender and the General Administrative Agent of its receipt thereof.
(b) The Canadian Borrower hereby agrees that it shall deliver to the
Canadian Administrative Agent on or prior to the Closing Date, Powers of
Attorney substantially in the form annexed hereto as Exhibit I ("Powers of
---------
Attorney") authorizing each Canadian Revolving Credit Lender to draw Drafts on
--------
such Canadian Revolving Credit Lender on behalf of the Canadian Borrower and to
complete such Drafts in accordance with the Requests for Acceptances submitted
from time to time pursuant to Section 5.7(a).
(c) Each Request for Acceptances made by or on behalf of the Canadian
Borrower hereunder shall contain a request for Acceptances denominated in
Canadian Dollars and having an aggregate undiscounted face amount equal to
C$1,000,000 or a whole multiple of C$100,000 in excess thereof. Each Acceptance
shall be dated the Borrowing Date specified in the Request for Acceptances with
respect thereto and shall be stated to mature on a Business Day which is
approximately 30, 60, 90 or 180 days after the date thereof (and, in any event,
prior to the Canadian Revolving Credit Termination Date).
(d) Not later than 12:00 Noon, Toronto time, on the Borrowing Date
specified in the relevant Request for Acceptances, and upon fulfillment of the
applicable conditions set forth in Section 9.2, each Canadian Revolving Credit
Lender will, in accordance with such Request for Acceptances, (i) sign each
Draft on behalf of the Canadian Borrower pursuant to the Power of Attorney, (ii)
complete the date, amount and maturity of each Draft to be accepted, (iii)
accept such Drafts and give notice to the Canadian Administrative Agent of such
acceptance and (iv) upon such acceptance, purchase such Acceptances to the
extent contemplated by Section 5.8. Alternatively, at the request of the
Canadian Administrative Agent, the Canadian Borrower shall deliver to the
Canadian Administrative Agent a "depository note" which complies with the
requirements of the Depository Bills and Notes Act (Canada), and consents to the
deposit of any Acceptance in the form of a depository note in the book-based
debt clearance system maintained by the Canadian Depository of Securities or
other recognized clearing house. In such circumstances, the delivery of
Acceptances shall be governed by the clearance procedures established
thereunder.
(e) Each Canadian Revolving Credit Lender will exercise such care in
the custody and safekeeping of Drafts as it would exercise in the custody and
safekeeping of similar property owned by it and will, upon request by the
Canadian Borrower, promptly advise the Canadian Borrower of the number and
designations, if any, of uncompleted Drafts held by it for the Canadian
Borrower. The signature of any officer of the Canadian Borrower on a Draft may
be mechanically reproduced and Acceptance Notes bearing facsimile signatures
shall be binding upon the Canadian Borrower as if they had been manually signed.
Even if the individuals whose manual or facsimile signature appears on any
Acceptance or Acceptance Note no longer hold office at the date of signature, at
the date of its acceptance by the Lender or at any time after such date, any
56
Acceptance or Acceptance Note so signed shall be valid and binding upon the
Canadian Borrower.
5.8 Discount of Acceptances. (a) Each Canadian Revolving Credit
-----------------------
Lender hereby severally agrees, on the terms and subject to the conditions set
forth in this Agreement, to purchase or cause to be purchased Acceptances
created by it on the Borrowing Date with respect thereto at the applicable
Reference Discount Rate by making available to the Canadian Borrower an amount
in immediately available funds equal to the Acceptance Purchase Price in respect
thereof, and to notify the Canadian Administrative Agent that such Draft has
been accepted, discounted and purchased by such accepting Canadian Revolving
Credit Lender.
(b) In the event that the Canadian Borrower has made a Request for
Acceptances, then (i) prior to 11:00 A.M., Toronto time, on the Borrowing Date
with respect thereto, the Canadian Administrative Agent will notify the General
Administrative Agent, the Canadian Borrower and the Canadian Revolving Credit
Lenders of the applicable Reference Discount Rate for such Acceptances and the
corresponding Acceptance Purchase Price and (ii) each Canadian Revolving Credit
Lender shall make the Acceptance Purchase Price for such Acceptances discounted
by it available to the Canadian Administrative Agent, for the account of the
Canadian Borrower, at the Canadian Funding Office prior to 12:00 Noon, Toronto
time, on the Borrowing Date, in Canadian Dollars and in funds immediately
available to the Canadian Administrative Agent. The proceeds of such purchase
will then be made available to the Canadian Borrower by the Canadian
Administrative Agent in like funds as received by the Canadian Administrative
Agent.
(c) Acceptances purchased or caused to be purchased by any Canadian
Revolving Credit Lender may be held by it for its own account until maturity or
sold by it at any time prior thereto in the relevant market therefor in Canada
in such Canadian Revolving Credit Lender's sole discretion. The doctrine of
merger shall not apply with respect to any Acceptance held by a Lender at
maturity.
5.9 Stamping Fees. On the Borrowing Date with respect to each
-------------
Acceptance, the Canadian Borrower shall pay to the Canadian Administrative
Agent, for the account of the Canadian Revolving Credit Lenders, a stamping fee
payable in Canadian Dollars at a rate per annum equal to the Applicable Margin
in effect on such Borrowing Date for Eurodollar Loans under the Canadian
Revolving Credit Facility, computed for the period from and including the
Borrowing Date with respect to such Acceptance to but not including the maturity
of such Acceptance, on the basis of a 365 or 366 -day year, as the case may be,
of the undiscounted face amount of such Acceptance. On any Borrowing Date with
respect to an Acceptance, the Canadian Borrower hereby authorizes each Canadian
Revolving Credit Lender to net all amounts payable on such date by such Canadian
Revolving Credit Lender to the Canadian Administrative Agent for the account of
the Canadian Borrower, against all amounts payable on such date by the Canadian
Borrower to such Canadian Revolving Credit Lender in accordance with the
Canadian Administrative Agent's calculations.
57
5.10 Acceptance Reimbursement Obligations. (a) The Canadian
------------------------------------
Borrower hereby unconditionally agrees to pay to the Canadian Administrative
Agent for the account of each Canadian Revolving Credit Lender, on the maturity
date (whether at stated maturity, by acceleration or otherwise) for each
Acceptance created by such Canadian Revolving Credit Lender for the account of
the Canadian Borrower, the aggregate undiscounted face amount of each such then-
maturing Acceptance.
(b) The obligation of the Canadian Borrower to reimburse the Canadian
Revolving Credit Lenders for then-maturing Acceptances may be satisfied by the
Canadian Borrower by:
(i) paying to the Canadian Administrative Agent, for the
account of the Canadian Revolving Credit Lenders, an amount in Canadian
Dollars and in immediately available funds equal to the aggregate
undiscounted face amount of all Acceptances created for the account of the
Canadian Borrower hereunder which are then maturing by 12:00 Noon, Toronto
time, on such maturity date; provided that the Canadian Borrower shall have
given not less than one Business Day's prior notice to the Canadian
Administrative Agent (which shall promptly notify each Canadian Revolving
Credit Lender thereof) of its intent to reimburse the Canadian Revolving
Credit Lenders in the manner contemplated by this clause (i);
(ii) having new Drafts accepted and discounted by the Canadian
Revolving Credit Lenders in the manner contemplated by Sections 5.7 and 5.8
in substitution for the then-maturing Acceptances; provided that (A) the
--------
Canadian Borrower shall have delivered to the Canadian Administrative Agent
(which shall promptly provide a copy thereof to each Canadian Revolving
Credit Lender) a duly completed Request for Acceptances not later than 2:00
P.M., Toronto time, one Business Day prior to such maturity date, together
with the documents, instruments, certificates and other papers and
information contemplated by Section 5.7(a)(ii) and 5.7(a)(iii), (B) if any
Default or Event of Default has occurred and is then continuing, the
Request for Acceptances shall be deemed to be a request for a Canadian
Revolving Credit Loan in an amount equal to the undiscounted face amount of
the Acceptances requested, (C) each Canadian Revolving Credit Lender shall
retain the Acceptance Purchase Price for the Acceptance created by it and
apply such Acceptance Purchase Price to the Acceptance Reimbursement
Obligations of the Canadian Borrower in respect of the maturing Acceptance
created by such Canadian Revolving Credit Lender, (D) if the Acceptance
Purchase Price so retained by such Canadian Revolving Credit Lender is less
than the undiscounted face amount of the then-maturing Acceptance, the
Canadian Borrower shall have made arrangements reasonably satisfactory to
such Canadian Revolving Credit Lender for payment of such deficiency and
(E) if the Acceptance Purchase Price so retained by the Canadian Revolving
Credit Lender is greater than the undiscounted face amount of the then-
maturing Acceptance, the Canadian Revolving Credit Lender shall make such
excess available to the Canadian Administrative Agent, which in turn shall
make such excess available to the Canadian Borrower, all in accordance with
Section 5.8(b); or
58
(iii) no the extent that the Canadian Borrower has not given to
the Canadian Administrative Agent a notice contemplated by clause (i) or
(ii) above, then the Canadian Borrower shall be deemed to have requested a
borrowing pursuant to Section 5.1 of Canadian Revolving Credit Loans in an
aggregate principal amount equal to the undiscounted face amount of such
then-maturing Acceptance. The Borrowing Date with respect to such borrowing
shall be the maturity date for such Acceptance. Except to the extent that
any of the events contemplated by paragraph (f) of Section 13 with respect
to the Canadian Borrower has occurred and is then continuing, each Canadian
Revolving Credit Lender shall be obligated to make the Canadian Revolving
Credit Loan contemplated by this Section 5.10(b)(iii) regardless of whether
the conditions precedent to borrowing set forth in this Agreement are then
satisfied. The proceeds of any Canadian Revolving Credit Loans made
pursuant to this Section 5.10(b)(iii) shall be retained by the Canadian
Revolving Credit Lenders and applied by them to the Acceptance
Reimbursement Obligations of the Canadian Borrower in respect of the then-
maturing Acceptance.
(c) The unpaid amount of any such Acceptance Reimbursement
Obligations shall be treated as a Canadian Revolving Credit Loan for the
purposes hereof and interest shall accrue on the amount of any such unpaid
Acceptance Reimbursement Obligation from the date such amount becomes due until
paid in full at a fluctuating rate per annum equal to the rate which would then
be payable on Canadian Revolving Credit Loans. Such interest shall be payable
by the Canadian Borrower on demand by the Canadian Administrative Agent.
(d) In no event shall the Canadian Borrower claim from any Canadian
Revolving Credit Lender any grace period with respect to the payment at maturity
of any Acceptances created by such Canadian Revolving Credit Lender pursuant to
this Agreement.
5.11 Converting Canadian Revolving Credit Loans to Acceptances and
-------------------------------------------------------------
Acceptances to Canadian Revolving Credit Loans. (a) Subject to Section
----------------------------------------------
5.11(b), the Canadian Borrower may at any time and from time to time request
that any then outstanding Canadian Revolving Credit Loan denominated in Canadian
Dollars be converted into an Acceptance by delivering to the Canadian
Administrative Agent (which shall promptly notify the General Administrative
Agent and each Canadian Revolving Credit Lender of its receipt thereof) a
Request for Acceptances, together with a statement that the Acceptances so
requested are to be created pursuant to this Section 5.11(a), such notice to be
given not later than two Business Days prior to the requested conversion date.
(b) In the event that the Canadian Administrative Agent receives such
a Request for Acceptances and the accompanying statement described in Section
5.11(a), then the Canadian Borrower shall pay on the requested Borrowing Date to
the Canadian Administrative Agent, for the account of the Canadian Revolving
Credit Lenders, the principal amount of the then outstanding Canadian Revolving
Credit Loans being so converted, and each Canadian Revolving Credit Lender shall
accept and discount the Canadian Borrower's Draft having an aggregate face
amount equal to the principal amount of the Canadian Revolving Credit Loans of
such Canadian Revolving Credit Lender which are then being repaid; it being
understood and agreed that for the
59
purposes of this Section 5.11(b), such payment by the Canadian Borrower of such
outstanding Canadian Revolving Credit Loans may be from the proceeds of such
discounted Drafts, provided that, (i) following the occurrence and during the
--------
continuance of a Default or an Event of Default, no Acceptances may be created,
(ii) the Canadian Borrower shall make arrangements reasonably satisfactory to
each Canadian Revolving Credit Lender for payment of any deficiency, including,
without limitation, the difference between the undiscounted face amount of the
Acceptance to be created pursuant to Section 5.11(a) and the Acceptance Purchase
Price and any other amount owing by the Canadian Borrower and (iii) no
Acceptance which is permitted to be created hereunder shall have a maturity that
extends beyond the Canadian Revolving Credit Termination Date.
(c) The creation of Acceptances pursuant to this Section 5.11 shall
not be subject to the satisfaction of the conditions precedent to borrowing set
forth in this Agreement.
(d) The Canadian Borrower may elect from time to time to convert
outstanding Acceptances to Canadian Revolving Credit Loans denominated in
Canadian Dollars by giving the Canadian Administrative Agent at least one
Business Day's irrevocable notice of such election prior to the maturity of such
Acceptances; provided that any such conversion of Acceptances may only be made
--------
on the maturity thereof.
(e) On any date on which a conversion or substitution of a maturing
Acceptance shall occur, the Canadian Administrative Agent shall be entitled to
net all amounts payable on such date by the Canadian Administrative Agent to a
Canadian Revolving Credit Lender against all amounts payable on such date by
such Canadian Revolving Credit Lender to the Canadian Administrative Agent.
Similarly, on any such date, the Canadian Borrower hereby authorizes each
Canadian Revolving Credit Lender to net all amounts payable on such date by such
Canadian Revolving Credit Lender to the Canadian Administrative Agent for the
account of the Canadian Borrower, against all amounts payable on such date by
the Canadian Borrower to such Canadian Revolving Credit Lender in accordance
with the Canadian Administrative Agent's calculations.
5.12 Allocation of Acceptances. The Canadian Borrower hereby agrees
-------------------------
that each Request for Acceptances, reimbursement of Acceptances and conversion
of Canadian Revolving Credit Loans to Acceptances shall be made in a manner so
that any such Request for Acceptances, reimbursement or conversion shall apply
ratably to all Canadian Revolving Credit Lenders in accordance with their
respective Canadian Revolving Credit Commitment Percentages. In the event that
the aggregate undiscounted face amount of Acceptances requested by the Canadian
Borrower to be created by all Canadian Revolving Credit Lenders hereunder
pursuant to any Request for Acceptances is an amount which, if divided ratably
among the Canadian Revolving Credit Lenders in accordance with their respective
Canadian Revolving Credit Commitment Percentages, would not result in each
Canadian Revolving Credit Lender accepting a Draft which has an undiscounted
face amount equal to C$100,000 or a whole multiple of C$100,000 in excess
thereof, then, notwithstanding any provision in this Section 5.12 to the
contrary, the Canadian Administrative Agent is authorized by the Canadian
Borrower and the Canadian Revolving Credit Lenders to allocate among the
Canadian Revolving Credit Lenders the Acceptances to be issued in such manner
and amounts as the Canadian Administrative Agent may,
60
in its sole discretion, acting reasonably, consider necessary, rounding up or
down, so as to ensure that no Canadian Revolving Credit Lender is required to
accept a Draft for a fraction of C$100,000 and, in such event, the Canadian
Revolving Credit Lenders' ratable share with respect to such Acceptances
shall be adjusted accordingly.
5.13 Special Provisions Relating to Acceptance Notes. (a) The
-----------------------------------------------
Canadian Borrower and each Canadian Revolving Credit Lender hereby acknowledge
and agree that from time to time certain Canadian Revolving Credit Lenders which
are not Canadian chartered banks or which are Schedule II Canadian Revolving
Credit Lenders may not be authorized to or may, as a matter of general corporate
policy, elect not to accept Drafts, and the Canadian Borrower and each Canadian
Revolving Credit Lender agree that any such Canadian Revolving Credit Lender may
purchase Acceptance Notes of the Canadian Borrower in accordance with the
provisions of Section 5.13(b) in lieu of creating Acceptances for its account.
(b) In the event that any Canadian Revolving Credit Lender
described in Section 5.13(a) above is unable to, or elects as a matter of
general corporate policy not to, create Acceptances hereunder, such Canadian
Revolving Credit Lender shall not create Acceptances hereunder, but rather, if
the Canadian Borrower requests the creation of such Acceptances, the Canadian
Borrower shall deliver to such Canadian Revolving Credit Lender non-interest
bearing promissory notes (each, an "Acceptance Note") of the Canadian Borrower,
---------------
substantially in the form of Exhibit J, having the same maturity as the
Acceptances to be created and in an aggregate principal amount equal to the
undiscounted face amount of such Acceptances. Each such Canadian Revolving
Credit Lender hereby agrees to purchase Acceptance Notes from the Canadian
Borrower at a purchase price equal to the Acceptance Purchase Price which would
have been applicable if a Draft in the same aggregate face amount as the
principal amount of its Acceptance Notes and of the same maturity had been
accepted by it (less any stamping fee which would have been paid pursuant to
Section 5.9 if such Lender had created an Acceptance) and such Acceptance Notes
shall be governed by the provisions of this Section 5 as if they were
Acceptances.
SECTION 6. LETTERS OF CREDIT
6.1 L/C Commitments. (a) Subject to the terms and conditions
---------------
hereof, each U.S. Issuing Lender, in reliance on the agreements of the other
U.S. Revolving Credit Lenders set forth in Section 6.4(a), agrees to issue
letters of credit ("U.S. Letters of Credit") for the account of the U.S.
----------------------
Borrower on any Business Day during the U.S. Revolving Credit Commitment Period
in such form as may be approved from time to time by such Issuing Lender;
provided, that no Issuing Lender shall have any obligation to issue any U.S.
--------
Letter of Credit if, after giving effect to such issuance, (i) the U.S. L/C
Obligations would exceed the U.S. L/C Commitment or (ii) the aggregate amount of
the Available U.S. Revolving Credit Commitments would be less than zero or (iii)
the Aggregate U.S. Revolving Extensions of Credit would exceed the Borrowing
Base of the U.S. Borrower. Notwithstanding the foregoing, the letter of credit
described on Schedule 6.1 shall, from and after the Closing Date, be deemed to
be a U.S. Letter of Credit issued pursuant to this Section 6.1(a) with the
Lender listed on such schedule being deemed to be the Issuing Lender in
respect of such U.S. Letter of Credit. Each U.S. Letter of
61
Credit shall (i) be denominated in U.S. Dollars and (ii) expire no later than
the earlier of (x) the first anniversary of its date of issuance and (y) the
date which is five Business Days prior to the U.S. Revolving Credit Termination
Date, provided that any U.S. Letter of Credit with a one-year term may provide
--------
for the renewal thereof for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (y) above).
(b) Subject to the terms and conditions hereof, each Canadian Issuing
Lender, in reliance on the agreements of the other Canadian Revolving Credit
Lenders set forth in Section 6.4(a), agrees to issue letters of credit
("Canadian Letters of Credit"; together with the U.S. Letters of Credit, the
--------------------------
"Letters of Credit") for the account of the Canadian Borrower on any Business
-----------------
Day during the Canadian Revolving Credit Commitment Period in such form as may
be approved from time to time by such Issuing Lender; provided, that no Issuing
--------
Lender shall have any obligation to issue any Canadian Letter of Credit if,
after giving effect to such issuance, (i) the Canadian L/C Obligations would
exceed the Canadian L/C Commitment, (ii) the aggregate amount of the Aggregate
Available Canadian Revolving Credit Commitments would be less than zero, or
(iii) the Aggregate Canadian Revolving Credit Outstanding would exceed the
Borrowing Base of the Canadian Borrower. Each Canadian Letter of Credit shall
(i) be denominated in U.S. Dollars or Canadian Dollars and (ii) expire no later
than the earlier of (x) the first anniversary of its date of issuance and (y)
the date which is five Business Days prior to the Canadian Revolving Credit
Termination Date, provided that any Canadian Letter of Credit with a one-year
--------
term may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above).
(c) No Issuing Lender shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
6.2 Procedure for Issuance of Letters of Credit. The U.S. Borrower
-------------------------------------------
or the Canadian Borrower may from time to time request that a U.S. Issuing
Lender or a Canadian Issuing Lender, as the case may be, issue a Letter of
Credit by delivering to such Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of such Issuing
Lender, and such other certificates, documents and other papers and information
as such Issuing Lender may request. Upon receipt of any Application, an Issuing
Lender will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and
the relevant Borrower (but in no event shall any Issuing Lender be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto). Promptly after issuance by an Issuing
Lender of a Letter of Credit, such Issuing Lender shall furnish a copy of such
Letter of Credit to the relevant Borrower. Each Issuing Lender shall promptly
furnish to the General Administrative Agent (and, in the case of a Canadian
Letter of Credit, to the Canadian Administrative Agent), notice of the issuance
of each Letter of Credit issued by it (including the amount thereof) and such
Agent shall promptly upon receipt of such notice notify each Lender.
62
6.3 Fees and Other Charges. (a) Each Borrower will pay a fee on the
----------------------
aggregate drawable amount of all outstanding Letters of Credit issued for such
Borrower's account at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the U.S. Revolving Credit
Facility, shared ratably among the U.S. Revolving Credit Lenders or the Canadian
Revolving Credit Lenders, as the case may be, in accordance with their
respective U.S. Revolving Credit Percentages or Canadian Revolving Credit
Percentages, as the case may be, and payable quarterly in arrears on each L/C
Fee Payment Date after the issuance date. In addition, each Borrower shall pay
to the relevant Issuing Lender for its own account a fronting fee on the
aggregate drawable amount of each outstanding Letter of Credit issued by such
Issuing Lender for the account of such Borrower of 1/4 of 1% per annum, payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date of
such Letter of Credit.
(b) In addition to the foregoing fees, each Borrower shall pay or
reimburse each Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit issued for such Borrower's account.
(c) Fees payable in respect of any Letter of Credit shall be payable
in the currency in which such Letter of Credit is denominated.
6.4 L/C Participations. (a) Each Issuing Lender irrevocably agrees
------------------
to grant and hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from each Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to (i) in the
case of each U.S. L/C Participant, such U.S. L/C Participant's U.S. Revolving
Credit Percentage in each Issuing Lender's obligations and rights under each
U.S. Letter of Credit issued by such Issuing Lender hereunder and the amount of
each draft paid by such Issuing Lender thereunder and (ii) in the case of each
Canadian L/C Participant, such Canadian L/C Participant's Canadian Revolving
Credit Percentage in each Issuing Lender's obligations and rights under each
Canadian Letter of Credit issued by such Issuing Lender hereunder and the amount
of each draft paid by such Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender that, if a draft
is paid under any Letter of Credit in which such L/C Participant has a
participating interest for which the relevant Issuing Lender is not reimbursed
in full by the relevant Borrower in accordance with the terms of this Agreement,
such L/C Participant shall pay to such Issuing Lender upon demand at such
Issuing Lender's address for notices specified herein an amount equal to such
L/C Participant's U.S. Revolving Credit Percentage (in the case of U.S. Letters
of Credit) or Canadian Revolving Credit Percentage (in the case of Canadian
Letters of Credit) of the amount of such draft, or any part thereof, that is not
so reimbursed.
(b) If any amount required to be paid by any L/C Participant to an
Issuing Lender pursuant to Section 6.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Lender under any Letter of Credit is paid to
such Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to such Issuing Lender on
63
demand an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate (in the case of amounts owing in U.S.
Dollars) or the rate determined by the Canadian Issuing Bank to be its cost of
funding the overdue amount (in the case of amounts owing in Canadian Dollars)
during the period from and including the date such payment is required to the
date on which such payment is immediately available to such Issuing Lender,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 6.4(a) is not
made available to such Issuing Lender by such L/C Participant within three
Business Days after the date such payment is due, such Issuing Lender shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to U.S. Base Rate Loans under the U.S. Revolving Credit Facility (in the case of
amounts owing in U.S. Dollars) or Canadian Base Rate Loans under the Canadian
Revolving Credit Facility (in the case of amounts owing in Canadian Dollars). A
certificate of such Issuing Lender submitted to any L/C Participant with respect
to any such amounts owing under this Section shall be conclusive in the absence
of manifest error.
(c) Whenever, at any time after an Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
---
rata share of such payment in accordance with Section 6.4(a), such Issuing
----
Lender receives any payment related to such Letter of Credit (whether directly
from the relevant Borrower or otherwise, including proceeds of collateral
applied thereto by such Issuing Lender), or any payment of interest on account
thereof, such Issuing Lender will distribute to such L/C Participant its pro
---
rata share thereof; provided, however, that in the event that any such payment
---- -------- -------
received by such Issuing Lender shall be required to be returned by such Issuing
Lender, such L/C Participant shall return to such Issuing Lender the portion
thereof previously distributed by such Issuing Lender to it.
6.5 Reimbursement Obligation of the Borrowers. Each Borrower agrees
-----------------------------------------
to reimburse each relevant Issuing Lender on each date on which such Issuing
Lender notifies such Borrower of the date and amount of a draft presented under
any Letter of Credit issue for the account of such Borrower and paid by such
Issuing Lender for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by such Issuing Lender in connection
with such payment (the amounts described in the foregoing clauses (a) and (b) in
respect of any drawing, collectively, the "Payment Amount"). Each such payment
--------------
shall be made to such Issuing Lender at its address for notices specified herein
in the currency in which such amount is owing and in immediately available
funds. Interest shall be payable on each Payment Amount from the date of the
applicable drawing until payment in full at the rate set forth in (i) until the
second Business Day following the date of the applicable drawing, Section 7.1(b)
(in the case of amounts outstanding in U.S. Dollars) in Section 7.1(c) (in the
case of amounts outstanding in Canadian Dollars) and (ii) thereafter, Section
7.1(e). Each drawing under any Letter of Credit shall (unless an event of the
type described in clause (i) or (ii) of Section 13(f) shall have occurred and be
continuing with respect to the Borrower, in which case the procedures specified
in Section 6.4 for funding by L/C Participants shall apply) constitute a request
by the relevant Borrower to the relevant Administrative Agent for (x) in the
case of a drawing in U.S. Dollars, a borrowing pursuant to Section 2.5 of U.S.
Base Rate Loans (or, at the option of the
64
General Administrative Agent and the Swing Line Lender in their sole discretion,
a borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing or (y), in the case of a drawing in Canadian Dollars, a borrowing
pursuant to Section 5.1 of Canadian Prime Rate Loans in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of U.S. Revolving Credit Loans, Canadian Revolving
Credit Loans or applicable, Swing Line Loans, as the case may be, could be made,
pursuant to Section 2.5, 5.2 or 2.7, as the case may be, if the relevant
Administrative Agent had received a notice of such borrowing at the time such
Administrative Agent receives notice from the relevant Issuing Lender of such
drawing under such Letter of Credit.
6.6 Obligations Absolute. Each Borrower's obligations under this
--------------------
Section 6 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that such
Borrower may have or have had against any Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. Each Borrower also agrees with each
Issuing Lender that such Issuing Lender shall not be responsible for, and such
Borrower's Reimbursement Obligations under Section 6.5 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among such Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of such Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of such
Issuing Lender. Each Borrower agrees that any action taken or omitted by an
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the
Uniform Commercial Code of the State of New York, shall be binding on such
Borrower and shall not result in any liability of such Issuing Lender to such
Borrower.
6.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the relevant Issuing Lender shall promptly
notify the relevant Borrower of the date and amount thereof. The responsibility
of the relevant Issuing Lender to the relevant Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit issued by
such Issuing Lender, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment appear on their face to be in conformity with such Letter of Credit.
6.8 Applications. To the extent that any provision of any
------------
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 6, the provisions of this Section 6 shall apply.
65
SECTION 7. GENERAL PROVISIONS APPLICABLE TO THE FACILITIES
7.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
--------------------------------
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin in effect for such day.
(b) Each U.S. Base Rate Loan shall bear interest for each day on
which it is outstanding at a rate per annum equal to the U.S. Base Rate for such
day plus the Applicable Margin in effect for such day.
(c) Each Canadian Prime Rate Loan shall bear interest for each day on
which it is outstanding at a rate per annum equal to the Canadian Prime Rate for
such day plus the Applicable Margin in effect for such day.
(d) Each Canadian Base Rate Loan shall bear interest for each day on
which it is outstanding at a rate per annum equal to the Canadian Base Rate for
such day plus the Applicable Margin in effect for such day.
(e) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall to the extent legally permitted bear
interest at a rate per annum equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2%.
(f) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (e) of this
subsection shall be payable from time to time on demand.
7.2 Conversion and Continuation Options With Respect to Loans. (a)
---------------------------------------------------------
The U.S. Borrower may elect from time to time to convert outstanding Eurodollar
Loans made to it under any Facility to U.S. Base Rate Loans under such Facility
by giving the General Administrative Agent at least one Business Day's prior
irrevocable notice of such election, provided that any such conversion of
--------
Eurodollar Loans made on a day other than the last day of an Interest Period
with respect thereto unless the U.S. Borrower as shall be accompanied by
payments of amounts specified in Section 7.12. The U.S. Borrower may elect from
time to time to convert outstanding U.S. Base Rate Loans made to it under any
Facility (other than Swing Line Loans) (in whole or in part) to Eurodollar Loans
under such Facility by giving the General Administrative Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of
conversion to Eurodollar Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Upon receipt of any such notice the General
Administrative Agent shall promptly notify each U.S. Lender thereof. All or any
part of outstanding Eurodollar Loans and U.S. Base Rate Loans owing by the U.S.
Borrower under such Facility may be converted as provided herein, provided that
--------
(i) no U.S. Base Rate Loan under any Facility may be converted into a Eurodollar
Loan when any Default or Event of Default has occurred and is continuing and the
General Administrative
66
Agent or the Majority Facility Lenders with respect to such Facility have
determined that such conversion is not appropriate, (ii) any such conversion may
only be made if, after giving effect thereto, Section 7.3 shall not have been
violated, (iii) no U.S. Base Rate Loan may be converted into a Eurodollar Loan
after the date that is one month prior to the U.S. Revolving Credit Termination
Date (in the case of U.S. Revolving Credit Loans) or the scheduled maturity date
therefor (in the case of U.S. Term Loans) and (iv) Swing Line Loans may not be
converted to Eurodollar Loans.
(b) The Canadian Borrower may elect from time to time to convert
outstanding Eurodollar Loans made to it under any Facility to Canadian Base Rate
Loans under such Facility by giving the Canadian Administrative Agent at least
one Business Day's prior irrevocable notice of such election, provided that any
--------
such conversion of Eurodollar Loans made on a day other than the last day of an
Interest Period with respect thereto shall be accompanied by payment of amounts
specified in Section 7.12. The Canadian Borrower may elect from time to time to
convert outstanding Canadian Base Rate Loans made to it under any Facility to
Eurodollar Loans under such Facility by giving the Canadian Administrative Agent
at least three Business Days' prior irrevocable notice of such election. Any
such notice of conversion to Eurodollar Loans shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of any such
notice the Canadian Administrative Agent shall promptly notify each affected
Canadian Lender thereof. All or any part of outstanding Eurodollar Loans and
Canadian Base Rate Loans owing by the Canadian Borrower under such Facility may
be converted as provided herein, provided that (i) no Canadian Base Rate Loan
under any Facility may be converted into a Eurodollar Loan when any Default or
Event of Default has occurred and is continuing and the Canadian Administrative
Agent or the Majority Facility Lenders with respect to any Facility have
determined that such conversion is not appropriate, (ii) any such conversion may
only be made if, after giving effect thereto, Section 7.3 shall not have been
violated, (iii) no Canadian Base Rate Loan may be converted into a Eurodollar
Loan after the date that is one month prior to the Canadian Revolving Credit
Termination Date (in the case of Canadian Revolving Credit Loans) or the
scheduled maturity date therefor (in the case of Canadian Term Loans).
(c) Any Eurodollar Loans under any Facility may be continued as such
upon the expiration of the then current Interest Period with respect thereto by
the relevant Borrower giving notice to the General Administrative Agent or the
Canadian Administrative Agent, as the case may be, of the length of the next
Interest Period to be applicable to such Loans determined in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1,
provided that no Eurodollar Loan under any Facility may be continued as such (i)
--------
when any Default or Event of Default has occurred and is continuing and the
General Administrative Agent (or, in the case of Canadian Facility Loans, the
Canadian Administrative Agent) or the Majority Facility Lenders under such
Facility have determined that such continuation is not appropriate, (ii) if,
after giving effect thereto, Section 7.3 would be contravened or (iii) after the
date that is one month prior to the U.S. Revolving Credit Termination Date,
Canadian Revolving Credit Termination Date or applicable final maturity date, as
the case may be, and provided, further, that if the relevant Borrower shall fail
-------- -------
to give such notice or if such continuation is not permitted pursuant to the
preceding proviso such Eurodollar Loans shall be automatically converted to U.S.
67
Base Rate Loans or Canadian Base Rate Loans, as applicable, on the last day of
such then expiring Interest Period.
7.3 Minimum Amounts of Tranches. (a) All borrowings, conversions
---------------------------
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, (i) the aggregate principal amount of the
Eurodollar Loans comprising each Tranche shall be equal to U.S.$1,000,000 or a
whole multiple of U.S. $100,000 in excess thereof, and (ii) there shall not be
more than nine Tranches at any one time outstanding.
(b) All Acceptances created hereunder, all conversions and
continuations thereof and all selections of maturity dates with respect thereto
shall be made pursuant to such elections so that, after giving effect thereto,
there shall be no more than six Acceptance Tranches at any one time outstanding.
7.4 Optional Prepayments. (a) The U.S. Borrower may at any time and
--------------------
from time to time prepay U.S. Facility Loans, in whole or in part without
premium or penalty (except with respect to prepayments of Tranche C Term Loans,
as provided in Section 7.4(d)) upon at least three Business Days' irrevocable
notice to the General Administrative Agent (in the case of Eurodollar Loans) and
at least one Business Day's irrevocable notice to the General Administrative
Agent (in the case of U.S. Base Rate Loans) specifying the date and amount of
prepayment, the Facility to which such prepayment applies and the type of Loans
being prepaid under each such Facility. Upon the receipt of any such notice the
General Administrative Agent shall promptly notify each affected U.S. Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein. Partial prepayments of the
U.S. Facility Loans (other than Swing Line Loans) shall be in an aggregate
principal amount of U.S.$250,000 or a whole multiple of U.S.$100,000 in excess
thereof (or in such lower amount as may be then outstanding). Partial
prepayments of the Swing Line Loans shall be in aggregate principal amount of
U.S.$100,000 or a whole multiple of U.S.$100,000 in excess thereof (or in such
lower amount as may be then outstanding). Optional prepayments of the U.S. Term
Loans shall be applied to the Tranche A Term Loans and Tranche B Term Loans
ratably in accordance with the outstanding principal amounts thereof.
Prepayments made pursuant to this Section 7.4(a) shall be applied as specified
in Section 7.5(f) and are subject to the provisions of Section 7.5(i). The
Tranche C Term Loans may not be optionally prepaid (except with the proceeds of
Replacement Subordinated Debt) so long as any other amounts are owing by any
Loan Party under this Agreement or the other Loan Documents.
(b) The Canadian Borrower may at any time and from time to time
prepay, without premium or penalty, the Canadian Facility Loans, in whole or in
part, upon at least three Business Days' irrevocable notice to the Canadian
Administrative Agent (in the case of Eurodollar Loans) and at least one Business
Day's irrevocable notice to the Canadian Administrative Agent (in the case of
Canadian Base Rate Loans or Canadian Prime Rate Loans) specifying the date and
amount of prepayment, the Facility to which such prepayment applies and the type
of Loans being prepaid under each such Facility. Upon the receipt of any such
notice, the Canadian Administrative Agent shall promptly notify each affected
Canadian Lender thereof. If any such
68
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein. Partial prepayments of Canadian Facility Loans
shall be in an aggregate principal amount of C$300,000 or a whole multiple of
C$100,000 in excess thereof (in the case of Canadian Facility Loans denominated
in Canadian Dollars), U.S.$250,000 or a whole multiple of US$100,000 in excess
thereof (in the case of Canadian Facility Loans denominated in U.S. Dollars (or
in such lower amount as may be then outstanding for either denomination).
Prepayments made pursuant to this Section 7.4(b) shall be applied as specified
in Section 7.5(g). Except as otherwise provided in Section 13, no prepayment of
any Acceptance shall be made by the Canadian Borrower prior to the maturity date
of such Acceptance.
(c) Each prepayment of Loans pursuant to this Section 7.4 shall be
accompanied by accrued and unpaid interest on the amount prepaid to the date of
prepayment and any amounts payable under Section 7.12 in connection with such
prepayment.
(d) Each prepayment in respect of the Tranche C Term Loans shall be
accompanied by a prepayment premium equal to (i) if such prepayment is made
prior to the first anniversary of the Closing Date, 4% of the principal amount
of such prepayment, (ii) if such prepayment is made on or after the first
anniversary of the Closing Date and prior to the second anniversary of the
Closing Date, 3% of the principal amount of such prepayment, (iii) if such
prepayment is made on or after the second anniversary of the Closing Date and on
or prior to the third anniversary of the Closing Date, 2% of the principal
amount of such prepayment and (iv) if such prepayment is made on or after the
third anniversary of the Closing Date and prior to the fourth anniversary of the
Closing Date, 1% of the principal amount of such prepayment and (v) if such
prepayment is made after the fourth anniversary of the Closing Date, 0% of the
principal amount of such prepayment.
7.5 Mandatory Prepayments and Commitment Reductions; Application of
---------------------------------------------------------------
Prepayments. (a) Unless the Required Prepayment Lenders shall otherwise agree,
-----------
if Holdings receives Excess Net Cash Proceeds from Capital Stock Sales, an
amount equal to 100% of such Excess Net Cash Proceeds shall be applied within
three Business Days after the date of receipt thereof toward the prepayment of
the Loans and Acceptances and permanent reduction of the Commitments as set
forth in Section 7.5(e).
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
after the Closing Date any Indebtedness shall be issued or incurred by Holdings
or any of its Subsidiaries (excluding any Indebtedness incurred in accordance
with Section 11.2, other than Replacement Subordinated Debt permitted by Section
11.2(n), the proceeds of which shall be used to prepay Tranche C Term Loans), an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied within
five Business Days after the date of such issuance or incurrence toward the
prepayment of the Loans and Acceptances and permanent reduction of the
Commitments as set forth in Section 7.5(e).
(c) Unless the Required Prepayment Lenders shall otherwise agree, if
after the Closing Date Holdings or any of its Subsidiaries (other than the
Canadian Entities) shall receive Net Cash Proceeds from any Asset Sale or
Recovery Event, an amount equal to 100% of such
69
Net Cash Proceeds shall be applied on such date toward the prepayment of the
Loans and Acceptances and permanent reduction of the Commitments as set forth in
Section 7.5(f). Unless the Required Prepayment Lenders shall otherwise agree,
if after the Closing Date any Canadian Entity shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event, an amount equal to 100% of such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Loans and
Acceptances and permanent reduction of the Commitments as set forth in Section
7.5(g). Notwithstanding the foregoing, no such prepayment shall be required in
respect of any Asset Sale or Recovery Event if the relevant Borrower delivers a
Reinvestment Notice in respect of each such Asset Sale and Recovery Event;
provided, that, on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayments required by Section 7.5(f) or 7.5(g), as
applicable.
(d) Unless the Required Prepayment Lenders shall otherwise agree, if,
for any fiscal year of Holdings commencing with the fiscal year ending on
December 31, 2000, Holdings shall have Excess Cash Flow (calculated with respect
to Holdings and its Subsidiaries) and the U.S. Borrower shall have Excess Cash
Flow (calculated with respect to the U.S. Borrower and its Subsidiaries), the
U.S. Borrower shall, on the relevant Excess Cash Flow Application Date, apply
the ECF Percentage of the smaller of Holdings' Excess Cash Flow and the U.S.
Borrower's Excess Cash Flow for such fiscal year toward the prepayment of the
Loans and the permanent reduction of the Commitments as set forth in Section
7.5(f). Unless the Required Prepayment Lenders shall otherwise agree, if, for
any fiscal year of Holdings commencing with the fiscal year ending on December
31, 2000, Holdings shall have Excess Cash Flow (calculated with respect to
Holdings and its Subsidiaries) and the Canadian Borrower shall have Excess Cash
Flow (calculated with respect to the Canadian Borrower and its Subsidiaries),
the Canadian Borrower shall, on the relevant Excess Cash Flow Application Date,
apply the ECF Percentage of the smaller of Holdings' Excess Cash Flow and the
Canadian Borrower's Excess Cash Flow for such fiscal year toward the prepayment
of the Loans and Acceptances and the reduction of the Commitments as set forth
in Section 7.5(g). Each such prepayment shall be made on a date (an "Excess
------
Cash Flow Application Date") no later than five days after the earlier of (i)
--------------------------
the date on which the financial statements of Holdings referred to in Section
10.1(a), for the fiscal year with respect to which such prepayment is made, are
required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.
(e) Subject to Section 7.9, amounts to be applied in connection with
prepayments and Commitment reductions made pursuant to Section 7.5(a) or 7.5(b)
shall be applied, first, to the prepayment of the Tranche A Term Loans, Tranche
-----
B Term Loans and Aggregate Canadian Term Loan Outstandings, ratably in
accordance with the outstanding amount of each such Facility and, second, after
------
prepayment in full of the amounts described in the foregoing clause first, 50%
-----
of any remaining portion of the amounts to be applied pursuant to Section 7.5(a)
or 7.5(b) shall be applied to reduce permanently the U.S. Revolving Credit
Commitments and the Canadian Revolving Credit Commitments, ratably in accordance
with the respective amounts of such Commitments. Any such reduction of the U.S.
Revolving Credit Commitments shall be accompanied by prepayment of the U.S.
Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the
Aggregate U.S. Revolving Extensions of Credit exceed the amount of the
70
aggregate U.S. Revolving Credit Commitments as so reduced, provided that if the
--------
aggregate principal amount of U.S. Revolving Credit Loans and/or Swing Line
Loans then outstanding is less than the amount of such excess (because L/C
Obligations constitute a portion thereof), the U.S. Borrower shall not be
required to reduce any outstanding U.S. Letters of Credit. Any such reduction
of the Canadian Revolving Credit Commitments shall be accompanied by prepayment
of the Canadian Revolving Credit Loans to the extent, if any, that the Aggregate
Canadian Revolving Extensions of Credit exceed the amount of the aggregate
Canadian Revolving Credit Commitments as so reduced, provided that if the
--------
aggregate principal amount of Canadian Revolving Credit Loans then outstanding
is less than the amount of such excess (because L/C Obligations and/or
Acceptances constitute a portion thereof), the Canadian Borrower shall not be
required to reduce any outstanding Canadian Letters of Credit or prepay any
Acceptance. The application of any such prepayment of U.S. Term Loans shall be
made first to U.S. Base Rate Loans and second to Eurodollar Loans (in a manner,
to the extent practicable and permitted hereunder, which minimizes amounts
payable under Section 7.12 as a result of such prepayment). The application of
any such prepayment to Aggregate Canadian Term Loan Outstandings shall be made
first to Canadian Base Rate Loans and second to Eurodollar Loans (in a manner,
to the extent practicable and permitted hereunder, which minimizes amounts
payable under Section 7.12 as a result of such prepayment). Each such
prepayment of Loans (except in the case of Swing Line Loans, U.S. Revolving
Credit Loans that are U.S. Base Rate Loans and Canadian Revolving Credit Loans
that are Canadian Prime Rate Loans or Canadian Base Rate Loans) shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
(f) Subject to Section 7.9, amounts to be applied in connection with
prepayments and reductions made pursuant to Section 7.4(a), the first sentence
of Section 7.5(c) or the first sentence of Section 7.5(d) shall be applied,
first, to the prepayment of the Tranche A Term Loans and Tranche B Term Loans,
-----
ratably in accordance with the respective outstanding amounts of the Facilities,
and, second, after prepayment in full of the amounts described in the foregoing
------
clause first, 50% of any remaining portion of amounts to be applied pursuant to
-----
Section 7.4(a), the first sentence of Section 7.5(c) or the first sentence of
Section 7.5(d) shall be applied to reduce permanently the U.S. Revolving Credit
Commitments. Any such reduction of the U.S. Revolving Credit Commitments shall
be accompanied by prepayment of the U.S. Revolving Credit Loans and/or Swing
Line Loans to the extent, if any, that the Aggregate U.S. Revolving Extensions
of Credit exceed the amount of the aggregate U.S. Revolving Credit Commitments
as so reduced, provided that if the aggregate principal amount of U.S. Revolving
--------
Credit Loans and/or Swing Line Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the U.S.
Borrower shall not be required to reduce any outstanding U.S. Letters of Credit.
The application of any such prepayment of U.S. Term Loans shall be made first to
U.S. Base Rate Loans and second to Eurodollar Loans (in a manner, to the extent
practicable and permitted hereunder, which minimizes amounts payable under
Section 7.12 as a result of such prepayment). Each such prepayment of the Loans
(except in the case of Swing Line Loans and U.S. Revolving Credit Loans that are
U.S. Base Rate Loans) shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
(g) Subject to Section 7.9, amounts to be applied in connection with
prepayments and reductions made pursuant to Section 7.4(b), the second sentence
of Section 7.5(c) or the
71
second sentence of Section 7.5(d) shall be applied, first, to the reduction of
-----
the Aggregate Canadian Term Loan Outstandings and the simultaneous and automatic
reduction in an equal amount of the Canadian Facility Maximum Amount and,
second, after prepayment in full of the amounts described in the foregoing
------
clause first, 50% of any remaining portion of amounts to be applied pursuant to
-----
Section 7.4(b), the second sentence of Section 7.5(c) or the second sentence of
Section 7.5(d) shall be applied to permanently reduce the Canadian Revolving
Credit Commitments. The application of any such prepayment to Aggregate Canadian
Term Loan Outstandings shall be made first to Canadian Base Rate Loans and
second to Eurodollar Loans (in a manner, to the extent practicable and permitted
hereunder, which minimizes amounts payable under Section 7.12 as a result of
such prepayment). Each such prepayment of the Canadian Term Loans shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
(h) The amount of each prepayment of the Loans made pursuant to
Section 7.4 or Section 7.5 shall be applied to reduce the then remaining
installments of the Loans under the relevant Facility pro rata based upon the
--- ----
then remaining outstanding principal amount of such installments; provided, that
--------
the relevant Borrower may elect for such prepayments to be first applied to
installments payable under such Loans during the twelve months following the
date of such prepayment.
(i) Notwithstanding anything in Section 7.4(a), Section 7.5(e) or
Section 7.5(f) to the contrary and provided that there are Tranche A Term Loans
then outstanding, with respect to the amount of any optional prepayment
described in Section 7.4(a) or mandatory prepayment described in Section 7.5
that is allocated to the Tranche B Term Loans (such amounts, the "Tranche B
---------
Prepayment Amount"), the U.S. Borrower will, in lieu of applying such amount to
-----------------
the prepayment of Tranche B Term Loans, as provided in Section 7.4(a) or Section
7.5(e) or (f), as the case may be, on the date specified in Section 7.4(a) or
Section 7.5, as the case may be, for such prepayment, give the General
Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the General Administrative Agent prepare and provide to each
Tranche B Lender a notice (each, a "Prepayment Option Notice") as described
------------------------
below. As promptly as practicable after receiving such notice from the U.S.
Borrower, the General Administrative Agent will send to each Tranche B Lender a
notice (a "Prepayment Option Notice"), which shall be in the form of Exhibit K,
------------------------
and shall include an offer by the U.S. Borrower to prepay on the date (each a
"Proposed Prepayment Date") that is 15 days after the date of the Prepayment
------------------------
Option Notice, the Tranche B Term Loans of such Lender by an amount equal to the
portion of the Tranche B Prepayment Amount indicated in such Lender's Prepayment
Option Notice as being applicable to such Lender's Tranche B Term Loans (which
shall be such Lender's pro rata share of the Tranche B Prepayment Amount). On
the Proposed Prepayment Date, (A) the U.S. Borrower shall pay to the General
Administrative Agent the aggregate amount necessary to prepay that portion of
the outstanding Tranche B Term Loans in respect of which Tranche B Lenders have
accepted prepayment as described above (such Lenders, the "Accepting Lenders"),
-----------------
and such amount shall be applied to reduce the Tranche B Prepayment Amount with
respect to each Accepting Lender and (B) the U.S. Borrower may retain 50% of the
Tranche B Prepayment Amount not accepted for prepayment and shall pay to the
General Administrative Agent an amount equal to 50% of the portion of the
Tranche B Prepayment Amount not accepted for prepayment, and such amount
72
shall be applied (i) in the case of optional prepayments pursuant to Section
7.4, to prepay the Tranche A Term Loans and (ii) in the case of mandatory
prepayments, to the other Facilities required to be prepaid pursuant to Section
7.5(e) or Section 7.5(f), as the case may be, ratably in accordance with the
outstanding amounts thereof.
7.6 Certain Fees. (a) The U.S. Borrower shall pay (without
------------
duplication of any other fee payable under this Section 7.6) to the Arranger and
the Syndication Agent, for their respective accounts, all fees separately agreed
to by the U.S. Borrower and the Arranger and the Syndication Agent, as the case
may be.
(b) The Canadian Borrower shall (without duplication of any other fee
payable under this Section 7.6) pay to the Canadian Administrative Agent all
fees separately agreed to by the Canadian Borrower and the Canadian
Administrative Agent.
(c) The U.S. Borrower shall (without duplication of any other fee
payable under this Section 7.6) pay to the General Administrative Agent all fees
separately agreed to by the U.S. Borrower and the General Administrative Agent.
7.7 Computation of Interest and Fees. (a) Interest based on the
--------------------------------
Eurodollar Rate the Canadian Prime Rate, the Canadian Base Rate, or the U.S.
Base Rate when it is based upon the Federal Funds Effective Rate shall be
calculated on the basis of a 360-day year for the actual days elapsed; and
commitment fees, letters of credit fees and interest (other than interest based
the Canadian Prime Rate, the Canadian Base Rate, upon the Eurodollar Rate or the
U.S. Base Rate when it is based upon the Federal Funds Effective Rate) shall be
calculated on the basis of a 365-(or 366-, as the case may be) day year for the
actual days elapsed. The General Administrative Agent shall as soon as
practicable notify the relevant Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the U.S. Base Rate, the Canadian Base Rate or the
Canadian Prime Rate shall become effective as of the opening of business on the
day on which such change becomes effective. The General Administrative Agent
shall as soon as practicable notify the U.S. Borrower and the Lenders of the
effective date and the amount of each such change in the U.S. Base Rate, and the
Canadian Administrative Agent shall as soon as practicable notify the U.S.
Borrower and Canadian Borrower and the Canadian Revolving Credit Lenders of each
such change in the Canadian Prime Rate and the Canadian Base Rate; provided that
--------
a failure by the General Administrative Agent or the Canadian Administrative
Agent to notify the U.S. Borrower or the Canadian Borrower of such respective
rate changes does not affect the obligation of the U.S. Borrower or the Canadian
Borrower to pay interest at the applicable rate as changed. For purposes of the
Interest Act (Canada), whenever any interest or fee under this Agreement is
calculated based on a period which is less than a year (the "Lesser Period"),
-------------
the interest rate or fee determined pursuant to such calculation, when expressed
as an annual rate, is equivalent to (i) the applicable rate based on such Lesser
Period, (ii) multiplied by the actual number of days in the calendar year in
which the period for which such interest or fee is payable ends, and (iii)
divided by the number of days in such Lesser Period. The rates of interest
specified in this Agreement are nominal rates and all interest payments and
computations are to be made without allowance or deduction for deemed
reinvestment of interest.
73
(b) Each determination of an interest rate by the General
Administrative Agent or the Canadian Administrative Agent, as the case may be,
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. Each
Administrative Agent shall, at the request of a Borrower, deliver to such
Borrower a statement showing in reasonable detail the calculations used by such
Administrative Agent in determining any interest rate pursuant to Section
7.1(a).
(c) If any Canadian Reference Lender shall for any reason no longer
have a Canadian Revolving Credit Commitment or any Canadian Revolving Credit
Loans, such Canadian Reference Lender shall thereupon cease to be a Canadian
Reference Lender, and if, as a result, there shall only be one Schedule I
Canadian Reference Lender or Schedule II Canadian Reference Lender (as the case
may be) remaining, the Canadian Administrative Agent, with the consent of the
Canadian Borrower (after consultation with the Schedule I Canadian Lenders or
the Schedule II Canadian Lenders, as applicable) shall, by notice to the
Canadian Borrower and the Canadian Lenders, designate another Schedule I
Canadian Lender or Schedule II Canadian Lender, as applicable, as a Schedule I
Canadian Reference Lender or a Schedule II Canadian Reference Lender, as
applicable, so that there shall at all times be at least two Schedule I Canadian
Reference Lenders and two Schedule II Canadian Reference Lenders.
(d) Each Canadian Reference Lender shall use its best efforts to
furnish quotations of rates to the Canadian Administrative Agent as contemplated
hereby. If any of the Canadian Reference Lenders shall be unable or shall
otherwise fail to supply such rates to the applicable Administrative Agent upon
its request, the rate of interest shall, subject to the provisions of Section
7.8, be determined on the basis of the quotations of the remaining Canadian
Reference Lenders or Reference Lender.
7.8 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
(a) the General Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers absent
manifest error) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the General Administrative Agent has received notice from the
Majority Facility 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,
the General Administrative Agent shall give telecopy or telephonic notice
thereof to the Borrower and the relevant Lenders as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans under the relevant
Facility requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans under the relevant Facility that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
under the relevant
74
Facility shall be converted, on the first day of such Interest Period, to Base
Rate Loans. Until such time as the Eurodollar Rate can be determined by the
General Administrative Agent in the manner specified in the definitions of such
terms in subsection 1.1, no further Eurodollar Loans under the affected Facility
shall be continued as such at the end of the then current Interest Periods or
shall be made, nor shall the relevant Borrower have the right to convert
outstanding Loans under such Facility into Eurodollar Loans. The Administrative
Agent shall withdraw (i) any such notice pursuant to clause (a) above if the
Administrative Agent determines that the relevant circumstances have ceased to
exist and (ii) any such notice pursuant to clause (b) above upon receipt of
notice from the Majority Facility Lenders in respect of the relevant Facility
that the relevant circumstances described in such clause (b) have ceased to
exist.
7.9 Pro Rata Treatment and Payments. (a) (i) Each borrowing from
-------------------------------
the Lenders under any Facility shall be made pro rata according to the
--- ----
respective Commitment Percentages of the Lenders in respect of such Facility in
effect on the date of such borrowing. Each payment on account of any commitment
fee or letter of credit fee relating to any Facility shall be allocated by the
relevant Administrative Agent among the Lenders in accordance with the
respective Commitment Percentages of the Lenders in respect of such Facility.
Any reduction of the Commitments under any Facility shall be allocated among the
Lenders pro rata according to the Commitment Percentages of the Lenders in
--- ----
respect of such Facility. Each payment (other than any optional prepayment) by
a Borrower on account of principal of the Loans shall be allocated by the
relevant Administrative Agent pro rata according to the respective principal
--- ----
amounts thereof then due and owing to each Lender. Each payment by a Borrower
on account of interest on the Loans shall be allocated by the relevant
Administrative Agent pro rata according to the respective amounts of interest
--- ----
then due and owing to each Lender. Each optional prepayment on account of
principal of or interest on the Loans under any Facility shall be allocated by
the relevant Administrative Agent pro rata according to the respective
--- ----
outstanding principal amounts of Loans outstanding under such Facility.
(ii) All payments (including prepayments) to be made by the U.S.
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set-off or counterclaim and shall be made prior
to 1:00 P.M., New York City time, on the due date thereof to the General
Administrative Agent, for the account of the U.S. Lenders, at the U.S. Payment
Office, in U.S. Dollars and in immediately available funds. The General
Administrative Agent shall distribute such payments to the U.S. Lenders entitled
to receive the same promptly upon receipt in like funds as received.
(iii) All payments (including prepayments) to be made by the Canadian
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set-off or counterclaim and shall be made prior
to 1:00 P.M., Toronto time, on the due date thereof to the Canadian
Administrative Agent, for the account of the Canadian Lenders, at the Canadian
Payment Office, in the currency in which the relevant amount is outstanding and
in immediately available funds. The Canadian Administrative Agent shall
distribute such payments to the Canadian Lenders entitled to receive the same
promptly upon receipt in like funds as received.
75
(iv) If any payment hereunder (other than payments on the Eurodollar
Loans and the Acceptances) becomes due and payable on a day other than a
Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity of such payment shall be extended to the next
succeeding Business Day (and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension)
unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day. Acceptances may only mature on a Business Day.
(b) Unless the applicable Administrative Agent shall have been
notified in writing by any Lender prior to a Borrowing Date that such Lender
will not make the amount that would constitute its share of such borrowing
available to such Administrative Agent, such Administrative Agent may assume
that such Lender is making such amount available to such Administrative Agent,
and such Administrative Agent may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. If such amount is
not made available to such Administrative Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to such Administrative Agent, on
demand, such amount with interest thereon at a rate per annum equal to (i) the
daily average Federal Funds Effective Rate (in the case of a borrowing of Loans
in U.S. Dollars), and (ii) the Canadian Administrative Agent's reasonable
estimate of its average daily cost of funds (in the case of a borrowing of Loans
or Acceptances in Canadian Dollars), in each case for the period until such
Lender makes such amount immediately available to such Administrative Agent. A
certificate of such Administrative Agent submitted to any Lender with respect to
any amounts owing under this subsection shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to such Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the applicable Borrower shall repay such Lender's share of such
borrowing (together with interest thereon from the date such amount was made
available to such Borrower (i) at the rate per annum applicable to U.S. Base
Rate Loans under the relevant Facility (in the case of amounts made available to
the U.S. Borrower and amounts made available in U.S. Dollars to the Canadian
Borrower) and (ii) at the rate per annum applicable to Canadian Prime Rate Loans
under the relevant Facility (in the case of amounts made available in Canadian
Dollars to the Canadian Borrower) to such Administrative Agent not later than
three Business Days after receipt of written notice from such Administrative
Agent specifying such Lender's share of such borrowing that was not made
available to such Administrative Agent. Nothing contained in this Section
7.9(b) shall prejudice any claims otherwise available to any Borrower against
any Lender as a result of such Lender's failure to make its share of any
borrowing available to an Administrative Agent for the account of a Borrower.
7.10 Illegality. (a) Notwithstanding any other provision herein, if
----------
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (i) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert U.S. Base Rate Loans or Canadian Base Rate Loans to
76
Eurodollar Loans shall forthwith be cancelled until such time as it shall no
longer be unlawful for such Lender to make or maintain the affected Loans and,
(ii) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to U.S. Base Rate Loans or Canadian Base Rate Loans, as
the case may be, on the respective last days of the then current Interest
Periods with respect to such Eurodollar Loans or within such earlier period as
may be 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 relevant Borrower shall not be obligated to pay to such Lender such
amounts, if any, as may be required pursuant to Section 7.12.
(b) Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Canadian Lender to create or maintain
Acceptances as contemplated by this Agreement, (a) the commitment of such
Canadian Lender hereunder to accept Drafts, purchase Acceptances, continue
Acceptances as such and convert Canadian Revolving Credit Loans or Canadian
Dollar Term Loans to Acceptances shall forthwith be cancelled until such time as
it shall no longer be unlawful for such Canadian Lender to create or maintain
Acceptances and (b) such Canadian Lender's then outstanding Acceptances, if any,
shall be converted automatically to Canadian Prime Rate Loans on the respective
maturities thereof or within such earlier period as may be permitted and
required by law.
(c) Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Canadian Lender to make or maintain
Canadian Base Rate Loans, (i) the commitment of such Canadian Lender hereunder
to make Canadian Base Rate Loans shall forthwith be cancelled until such time as
it shall no longer be unlawful for such Canadian Lender to make or maintain
Canadian Base Rate Loans and (ii) such Canadian Lender's then outstanding
Canadian Base Rate Loans, if any, shall be converted automatically to Canadian
Dollars at the Exchange Rate and Canadian Prime Rate Loans on the respective
maturities thereof or within such earlier period as may be permitted and
required by law.
(d) If, by reason of circumstances affecting the money markets
generally, there is no market for Acceptances (i) the right of the Canadian
Borrower to request an Acceptance shall be suspended until the circumstances
causing a suspension no longer exist, and (ii) any Request for an Acceptance
which is outstanding shall be canceled and the requested Acceptance shall not be
available. The Canadian Administrative Agent shall promptly notify the Canadian
Borrower of the suspension of the Canadian Borrower's right to request an
Acceptance and of the termination of any suspension.
7.11 Requirements of Law. (a) If the adoption of, or any change in,
-------------------
any Requirement of Law or in the interpretation thereof, or compliance by any
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority:
77
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Acceptance created by it, any
Letter of Credit issued or participated in by it or any Loans made by it,
or change the basis of taxation of payments to such Lender of principal,
fees, interest or any other amount payable hereunder (except for taxes
covered by Section 7.13 and changes in the rate of tax on the overall net
income or capital of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds
by, any office of such Lender which are not otherwise included in the
determination of the Eurodollar Rate, including, without limitation, the
imposition of any reserves with respect to Eurocurrency Liabilities under
Regulation D of the Board; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by any amount which such Lender deems to be material, of making, renewing or
maintaining advances or extensions of credit or to reduce any amount receivable
hereunder, in each case in respect of its Loans, its Acceptances or its
Participating Interests, then, in any such case, the applicable Borrower shall,
to the extent permitted by law, promptly pay such Lender, upon receipt of its
demand setting forth in reasonable detail, any additional amounts necessary to
compensate such Lender for such additional cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower in reasonable detail (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled. This covenant shall survive the termination of this Agreement and
payment of all amounts outstanding hereunder.
(b) In the event that any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
(or in the interpretation or application thereof) or compliance by such Lender
or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
central bank or Governmental Authority, does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the U.S.
Borrower (with a copy to the General Administrative Agent) of a written request
therefor, setting forth in reasonable detail the basis therefor the U.S.
Borrower shall promptly pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 7.11 or Section 7.13, it shall promptly notify the
relevant Borrower (with a copy to
78
the Administrative Agent) of the event by reason of which it has become so
entitled, provided that no Lender shall be entitled to claim any such additional
amount with respect to the period which is more than 180 days prior to the
delivery of such notice.
7.12 Indemnity. Each Borrower agrees to indemnify each Lender and
---------
each Agent and to hold each Lender and each Agent harmless from any loss or
expense (other than any loss of Applicable Margin) which such Lender or such
Agent, as the case may be, may sustain or incur as a consequence of (a) default
by such Borrower in payment when due of the principal amount of or interest on
any Loans of such Lender, (b) default by such Borrower in making a borrowing or
conversion after the Borrower has given a notice of borrowing or a notice of
conversion in accordance with this Agreement, (c) default by such Borrower in
making any prepayment after such Borrower has given a notice in accordance with
this Agreement, (d) the making of a prepayment of a Eurodollar Loan on a day
which is not the last day of an Interest Period with respect thereto, including,
without limitation, any such loss or expense arising from the reemployment of
funds obtained by it or from fees payable to terminate the deposits from which
such funds were obtained, (e) the prepayment of an Acceptance or an Acceptance
Note on a day which is not the maturity date thereof, (f) the failure of the
Canadian Borrower to make any payment, repayment or prepayment on the date
required hereunder or specified by it in any notice hereunder which results in
any cost or expense accrued by reason of the liquidation or re-employment in
whole or in part of deposits or other funds required by any Lender to fund any
Acceptance or (g) the Canadian Borrower's failure to provide for the payment to
the Canadian Administrative Agent or any Lender of the full face amount of each
Acceptance on its maturity date, including, without limitation, in each case,
any such loss or expense arising from the reemployment of funds obtained by it
to maintain its Eurodollar Loans hereunder or from fees payable to terminate the
deposits from which such funds were obtained. A certificate as to any such loss
or expense submitted by such Lender shall be presumptively correct, absent
manifest error. This covenant shall survive termination of this Agreement and
payment of all amounts outstanding hereunder.
7.13 Taxes. (a) Except as otherwise provided herein, all payments
-----
made by either Borrower under this Agreement shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender
as a result of a present or former connection between such Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Agent's or such Lender's having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-
----
Excluded Taxes") or any Other Taxes are required to be withheld from any amounts
--------------
payable to any Agent or any Lender hereunder, the amounts so payable to such
Agent or such Lender shall be increased to the extent necessary to yield to such
Agent or such Lender (after payment of all taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement;
79
provided, however, that the Borrowers shall not be required to increase any such
-------- -------
amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that
are attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time such Lender becomes
a party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrowers with respect to such Non-Excluded Taxes pursuant to Section
7.13(a).
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by any
Borrower, as promptly as possible thereafter such Borrower shall send to the
relevant Administrative Agent for the account of the relevant Agent or Lender,
as the case may be, a certified copy of an original official receipt received by
such Borrower showing payment thereof. If any Borrower fails to pay any Non-
Excluded Taxes or Other Taxes when due to the appropriate taxing authority or
fails to remit to the relevant Administrative Agent the required receipts or
other required documentary evidence, such Borrower shall indemnify the Agents
and the Lenders for any incremental taxes, interest or penalties that may become
payable by any Agent or any Lender as a result of any such failure. The
agreements in this Section 7.13 shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(d) Each Lender or Transferee (other than a Canadian Lender) that is
not a U.S. person as defined in section 7701(a)(30) of the Code (a "Non-U.S.
--------
Lender") shall deliver to the U.S. Borrower and the General Administrative Agent
------
(or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest" a statement
substantially in the form of Exhibit L and a Form W-8, or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the U.S. Borrower under this
Agreement and the other Loan Documents together with any other certificate or
statement of exemption required under the Code or Regulations issued thereunder.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each such Non-U.S. Lender shall promptly notify the U.S. Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the U.S. Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such Non-
U.S. Lender is not legally able to deliver.
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(e) Each Canadian Lender that is entitled to an exemption from or
reduction of Canadian withholding tax with respect to payments under this
Agreement shall deliver to the Canadian Borrower (with a copy to the General
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Canadian Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate, provided that such Canadian
--------
Lender is legally entitled to complete, execute and deliver such documentation
and in such Canadian Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Canadian
Lender.
(f) If an Administrative Agent or any Lender receives a refund or
otherwise would have received a refund but for the offset of the amount of such
refund against the Lender's Non-Excluded Taxes ("Tax Refund"), which in the good
----------
faith judgment of such Lender is allocable to Non-Excluded Taxes paid by the
Borrower, it shall promptly pay such Tax Refund to the Borrower, net of all out-
of-pocket expenses of such Lender incurred in obtaining such Tax Refund,
provided, however, that the Borrower agrees to promptly return such Tax Refund
-------- -------
to such Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from such Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such Tax Refund but only if
such repayment is required because the initial Tax Refund was permitted in
error.
7.14 Use of Proceeds. The proceeds of the Loans shall be used for
---------------
general corporate purposes of Holdings and its Subsidiaries, including the
Transactions and acquisitions permitted hereunder; provided, that not more than
--------
U.S.$16,500,000 in aggregate principal amount of U.S. Revolving Credit Loans and
Canadian Revolving Credit Loans may be used to finance the Transactions.
7.15 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 7.10, 7.12 or
7.13(a) with respect to such Lender, it will, if requested by Holdings, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
--------
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
-------- -------
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 7.10, 7.12 or 7.13(a).
7.16 Replacement of Lenders under Certain Circumstances. Holdings
--------------------------------------------------
shall be permitted to (a) replace any Lender that (i) defaults in its obligation
to make Loans hereunder, (ii) is not required to make Eurodollar Loans pursuant
to Section 7.10 or 7.11, (iii) is not required to issue Acceptances under
Section 7.10 (unless such Lender complies with Section 5.13) or (iv) in
connection with any proposed amendment, modification, supplement or waiver with
respect to any of the provisions of the Loan Documents as contemplated in
Section 15.1 where such amendment, modification, supplement or waiver has been
approved by the Required Lenders (and, if applicable, the Required Prepayment
Lenders and/or Majority Facility Lenders) in
81
accordance with such Section, fails to consent to any such proposed action and
(b) replace or remove any Lender that requests reimbursement for amounts owing
pursuant to Section 7.11 or 7.13, in each case with a replacement financial
institution and, if the Borrower elects to remove such Lender, terminate such
Lender's applicable Revolving Credit Commitment hereunder; provided that (i)
such replacement or removal does not conflict with any Requirement of Law, (ii)
no Event of Default shall have occurred and be continuing at the time of such
replacement or removal, (iii) prior to any such replacement or removal pursuant
to clause (b) above, such Lender shall have taken no action under Section 7.15
so as to eliminate the continued need for payment of amounts owing pursuant to
Section 7.11 or 7.13, (iv) the relevant Borrower shall be liable to such
replaced Lender under Section 7.12 (as though Section 7.12 were applicable) if
any Eurodollar Loan owing to such replaced Lender or Acceptance created by such
Lender shall be purchased other than on the last day of the Interest Period or
maturity date relating thereto, (v) any such replacement or removal, as the case
may be, shall not be deemed to be a waiver of any rights which the Borrower, the
Administrative Agents or any other Lender shall have against the replaced or
removed Lender, (vi) in the case of replacement of a Lender under this Section
7.16, the replacement financial institution shall purchase, at par, all Loans
and other amounts owing to such replaced Lender on or prior to the date of
replacement, (vii) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the General Administrative Agent,
(viii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 15.6 (provided that no registration
and processing fee referred to therein shall be required to be paid in
connection therewith), and (ix) the relevant Borrower shall pay all additional
amounts (if any) required pursuant to Section 7.11 or 7.13, as the case may be,
in respect of any period prior to the date on which such replacement shall be
consummated. If the Borrower elects to remove a Lender under clause (b) of this
Section 7.16 and if such Lender has any Loans outstanding at such time, the
consent of the General Administrative Agent and the Required Lenders shall be
required to terminate such Lender's Revolving Credit Commitment and in the case
of replacement of a non-consenting Lender under clause (a)(iii) of this Section
7.16, the Borrower shall replace such Lender within 120 days of such Lender's
failure to consent to the proposed action.
SECTION 8. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans, issue or participate in the Letters of Credit, Holdings and
the Borrowers hereby represent and warrant to each Agent and each Lender that
(it being understood that the representations and warranties of the Canadian
Borrower are made only with respect to matters relating to it):
8.1 Financial Condition. (a) The unaudited pro forma consolidated
------------------- --- -----
balance sheet of Holdings and its consolidated Subsidiaries as at June 30, 1999
(including the notes thereto) (the "Pro Forma Balance Sheet"), copies of which
-----------------------
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the consummation of the
Transactions, (ii) the Loans to be made and the Acceptances to be created on the
Closing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the
82
best information reasonably available to the Borrower as of the date of delivery
thereof and on good faith estimates and assumptions believed to be reasonable at
the time made, and presents fairly in all material respects on a pro forma basis
--- -----
the estimated financial position of Holdings and its consolidated Subsidiaries
as at June 30, 1999, assuming that the events specified in the preceding
sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Canadian Borrower
(prior to the Transactions) as at August 31, 1997 and August 31, 1998, and the
related consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by an unqualified report
from KPMG Peat Marwick, present fairly in all material respects the consolidated
financial condition of the Canadian Borrower (prior to the Transactions) as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended. The unaudited
consolidated balance sheet of the Canadian Borrower (prior to the Transactions)
as at June 30, 1999, and the related unaudited consolidated statements of income
for the ten-month period ended on such date, present fairly in all material
respects the consolidated financial condition of the Canadian Borrower (prior to
the Transactions) as at such date, and the consolidated results of its
operations for the ten-month period then ended (subject to normal year-end audit
adjustments and the absence of certain notes thereto). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with Canadian GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). Immediately prior to the consummation of the
Transactions, the Canadian Borrower does not have any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from August 31, 1998 to and including the date hereof there has been no
Disposition by the Canadian Borrower of any material part of its business or
Property, except pursuant to the Transactions.
(c) The audited consolidated balance sheets of the U.S. Borrower
(prior to the Transactions) as at December 31, 1997 and December 31, 1998, and
the related consolidated statements of income and of cash flows for the fiscal
years ended on such dates, reported on by and accompanied by an unqualified
report from PricewaterhouseCoopers LLP (in respect of 1997) and Xxxxxx Xxxxxxxx
& Co. (in respect of 1998), present fairly in all material respects the
consolidated financial condition of the U.S. Borrower (prior to the
Transactions) as at such date, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of the U.S. Borrower (prior to the
Transactions) as at June 30, 1999, and the related unaudited consolidated
statements of income and cash flows for the six-month period ended on such date,
present fairly in all material respects the consolidated financial condition of
the U.S. Borrower (prior to the Transactions) as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
six-month period then ended (subject to normal year-end audit adjustments and
the absence of certain notes thereto). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the
83
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). Immediately prior to the consummation of the
Transactions, the U.S. Borrower does not have any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from December 31, 1998 to and including the date hereof there has been no
Disposition by the U.S. Borrower of any material part of its business or
Property, except pursuant to the Transactions.
8.2 No Change. Since August 31, 1998 (in the case of the Canadian
---------
Borrower) and since December 31, 1998 (in the case of the U.S. Borrower) there
has been no development or event that has had or could reasonably be expected to
have a Material Adverse Effect (it being understood that the consummation of the
Transactions on the Closing Date shall not constitute or be deemed to have a
Material Adverse Effect).
8.3 Corporate Existence; Compliance with Law. Each of Holdings and
----------------------------------------
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its Property, to
lease the Property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such
qualification, except to the extent the failure to be so qualified and/or in
good standing could not reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
8.4 Corporate Power; Authorization; Enforceable Obligations. Each
-------------------------------------------------------
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of each Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of each Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Transactions, the borrowings hereunder or the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the other Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 8.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect, (ii) other
consents required in connection with the Transactions, the failure to obtain
which could not reasonably be expected to have a Material Adverse Effect, and
(iii) the filings referred to in Section 8.19. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party that is a party thereto.
This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan
84
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
8.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
material Requirement of Law or any material Contractual Obligation of Holdings
or any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any material Requirement of Law or any such material Contractual
Obligation (other than the Liens created by the Security Documents). No
Contractual Obligation applicable to Holdings or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
8.6 No Material Litigation. Except as disclosed on Schedule 8.6, as
----------------------
of the date hereof, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
Holdings, threatened by or against Holdings or any of its Subsidiaries or
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or thereby,
or (b) that could reasonably be expected to have a Material Adverse Effect.
8.7 No Default. Neither Holdings nor any of its Subsidiaries is in
----------
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
8.8 Ownership of Property; Liens. Each of Holdings and its
----------------------------
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its material real property, and good title to, or a valid leasehold interest in,
all its other Property material to the conduct of its Business, and none of such
Property is subject to any Lien except as permitted by Section 11.3.
8.9 Intellectual Property. Holdings and each of its Subsidiaries
---------------------
owns, or is licensed to use, or otherwise has the right to use, all Intellectual
Property necessary for the conduct of its business as currently conducted,
except for any failure to so own, license or have the right to use Intellectual
Property which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. No material claim has been asserted
and is pending by any Person against Holdings or any of its Subsidiaries
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property by Holdings or any of its
Subsidiaries or the validity or effectiveness of any Intellectual Property used
by Holdings or any of its Subsidiaries, except for any claims which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. The use of Intellectual Property by Holdings and its
Subsidiaries does not infringe on the rights of any Person in any respect which
could reasonably be expected to have a Material Adverse Effect.
85
8.10 Taxes. Each of Holdings and each of its Subsidiaries has filed
-----
or caused to be filed all Federal, state and other material tax returns that are
required to be filed and has paid all material taxes shown to be due and payable
on said returns prior to the date penalties or interest attach thereto or on any
assessments made against it or any of its Property and all other material taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Holdings or
its Subsidiaries, as the case may be); and no tax Lien has been filed that is
not permitted by Section 11.3, and, to the knowledge of Holdings, no claim is
being asserted, with respect to any such tax, fee or other charge.
8.11 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the General
Administrative Agent, the relevant Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
8.12 Labor Matters. There are no strikes or other labor disputes
-------------
against Holdings or any of its Subsidiaries pending or, to the knowledge of
Holdings, threatened that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. Hours worked by and payment made to
employees of Holdings and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing with
such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from Holdings or
any of its Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of Holdings or the relevant Subsidiary.
8.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither Holdings nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither Holdings nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date
86
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent.
8.14 Investment Company Act; Other Regulations. No Loan Party is an
-----------------------------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
8.15 Subsidiaries. The Subsidiaries listed on Schedule 8.15
------------
constitute all the Subsidiaries of Holdings at the date hereof. Schedule 8.15
sets forth as of the Closing Date the name and jurisdiction of incorporation of
each Subsidiary and, as to each Subsidiary, the percentage of each class of
Capital Stock owned by each Loan Party.
8.16 Use of Proceeds. The proceeds of the Loans shall be used for
---------------
the purposes set forth in Section 7.14.
8.17 Environmental Matters. Other than exceptions to any of the
---------------------
following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) Holdings and its Subsidiaries: (i) are, and within the period of
all applicable statutes of limitation have been, in compliance with all
applicable Environmental Laws; (ii) hold all Environmental Permits (each of
which is in full force and effect) required for any of their current or
intended operations or for any property owned, leased, or otherwise
operated by any of them; (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their
Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may be required
of any of them will be timely obtained and complied with, without material
expense; and compliance with any Environmental Law that is or is expected
to become applicable to any of them will be timely attained and maintained,
without material expense.
(b) Materials of Environmental Concern are not present at, on, under,
in, or about any real property now or formerly owned, leased or operated by
Holdings or any of its Subsidiaries, or at any other location (including,
without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment, storage,
or disposal) which could reasonably be expected to (i) give rise to
liability of Holdings or any of its Subsidiaries under any applicable
Environmental Law or otherwise result in costs to Holdings or any of its
Subsidiaries, or (ii) interfere with Holdings or any of its Subsidiaries'
continued operations, or (iii) impair the fair saleable value of any real
property owned or leased by Holdings or any of its Subsidiaries.
87
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating
to any Environmental Law to which Holdings or any of its Subsidiaries is,
or to the knowledge of Holdings or any of its Subsidiaries will be, named
as a party that is pending or, to the knowledge of Holdings or any of its
Subsidiaries, threatened.
(d) Neither Holdings nor any of its Subsidiaries has received any
written request for information, or been notified that it is a potentially
responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental
Concern.
(e) Neither Holdings nor any of its Subsidiaries has entered into or
agreed to any consent decree, order, or settlement or other agreement, or
is subject to any judgment, decree, or order or other agreement, in any
judicial, administrative, arbitral, or other forum for dispute resolution,
relating to compliance with or liability under any Environmental Law.
(f) Neither Holdings nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind,
fixed or contingent, known or unknown, under any Environmental Law or with
respect to any Material of Environmental Concern.
8.18 Accuracy of Information, etc. Subject to the next succeeding
----------------------------
sentence and to the qualification provided therein, no statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to any Agent or the Lenders or any of them, by or on behalf of any Loan Party
for use in connection with the transactions contemplated by this Agreement or
the other Loan Documents, contained as of the date such statement, information,
document or certificate was so furnished (or, in the case of the Confidential
Information Memorandum, as of the date of this Agreement), any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements contained herein or therein not misleading in light of the
circumstances under which they were made. The projections and pro forma
--- -----
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of Holdings to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations and warranties of
each of the Loan Parties and, to the best knowledge of the Borrowers, each of
the other parties thereto contained in the Transaction Documentation are true
and correct in all material respects. There is no fact known to any Loan Party
that could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Agents and
88
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
8.19 Security Documents. (a) The Guarantee and Collateral Agreement
------------------
is effective to create in favor of the General Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when any stock
certificates representing such Pledged Stock are delivered to the General
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 8.19(a)-1 (which financing
statements have been duly completed and executed and delivered to the General
Administrative Agent) and such other filings as are specified on Schedule 3 to
the Guarantee and Collateral Agreement (all of which filings have been duly
completed), the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 11.3). Schedule
8.19(a)-2 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will remain on file after the Closing Date. Schedule 8.19(a)-3
lists each UCC Financing Statement that (i) names any Loan Party as debtor and
(ii) will be terminated on or prior to the Closing Date; and on or prior to the
Closing Date, the U.S. Borrower will have delivered to the General
Administrative Agent, or caused to be filed, duly completed UCC termination
statements, signed by the relevant secured party, in respect of each UCC
Financing Statement listed in Schedule 8.19(a)-3.
(b) Each Canadian Security Document is effective to create in favor
of the General Administrative Agent, for the benefit of the Canadian Lenders, a
legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock described in the
Canadian Security Documents, when any stock certificates representing such
Pledged Stock are delivered to the General Administrative Agent, and in the case
of the other Collateral described in the Canadian Security Documents, when
financing statements or other registrations specified in Schedule 8.19(b)-1 are
registered in the offices specified therein, the Canadian Security Documents
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Canadian Borrower Obligations in each case prior
and superior in right to any other Person (except, in the case of Collateral
other than Pledged Stock, Liens permitted by Section 11.3). Schedule 8.19(b)-2
lists each registered financing statement or other registration made under the
Personal Property Security Act (Ontario) ("PPSA") and similar legislation in
----
effect in each of the other provinces of Canada and under The Bank Act (Canada)
that (i) names any Loan Party as debtor and (ii) will remain on file after the
Closing Date. Schedule 8.19(b)-3 lists each registered financing statement or
other registration made under the PPSA and similar legislation in effect in each
of the other provinces of Canada and under The Bank Act (Canada) that (i) names
any Loan Party as debtor and (ii) will be discharged on or prior to the Closing
Date; and on or prior to the Closing Date, the Canadian Borrower will have
delivered to the Canadian Administrative Agent, or caused to be filed, duly
completed financing
89
change statements, designated as discharges or other releases and discharges in
form satisfactory to the Canadian Administrative Agent signed by the relevant
secured party, in respect of each registered financing statement listed in
Schedule 8.19(b)-3.
8.20 Solvency. Each of (i) Holdings and its Subsidiaries on a
--------
consolidated basis, (ii) the U.S. Borrower and its Subsidiaries on a
consolidated basis, and (iii) the Canadian Borrower and its Subsidiaries on a
consolidated basis is, and after giving effect to the Transactions and the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be and will continue to be, Solvent.
8.21 Year 2000 Matters. To the knowledge of Holdings, any
-----------------
reprogramming required to permit the proper functioning, in and following the
year 2000, of (i) the Borrowers' computer systems and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which Borrowers' systems interface) and the testing of all such systems and
equipment, as so reprogrammed, has been completed, except where noncompliance
would not reasonably be expected to have a Material Adverse Effect.
SECTION 9. CONDITIONS PRECEDENT
9.1 Conditions to Initial Extension of Credit. The agreement of each
-----------------------------------------
Lender to make the initial Extension of Credit requested to be made by it
hereunder is subject to the satisfaction, prior to or concurrently with the
making of such Extension of Credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agents shall have received
--------------
(i) this Agreement, executed and delivered by a duly authorized officer of
Holdings and each Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of Holdings, the U.S.
Borrower and each Subsidiary Guarantor and (iii) each Canadian Security
Document, executed by a duly authorized officer of each party thereto.
(b) Transactions, etc. The following transactions shall have been
-----------------
consummated, in each case on terms and conditions reasonably satisfactory
to the Lenders:
(i) the Transactions shall have been consummated in accordance
with the Transaction Documentation for aggregate consideration not
exceeding $160,000,000; and
(ii) Investors shall have invested at least $16,730,000 in cash
to buy shares of the Loan Parties.
The capital structure of each Loan Party after the Transactions shall be
satisfactory to the General Administrative Agent.
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(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
---------------------------------------------
have received (i) the Pro Forma Balance Sheet, and (ii) unaudited interim
consolidated financial statements of each of the Canadian Borrower and the
U.S. Borrower (in each case, prior to the consummation of the Transactions)
for each fiscal month and quarterly period ended subsequent to the date of
the latest applicable financial statements delivered pursuant to Section
8.1 as to which such financial statements are available; and such financial
statements shall not, in the reasonable judgment of the Lenders, reflect
any material adverse change in the consolidated financial condition of
either the Canadian Borrower or the U.S. Borrower, as reflected in the
financial statements or projections contained in the Confidential
Information Memorandum.
(d) Approvals. All material governmental and third party approvals
---------
(including landlords' and other consents) necessary in connection with the
Transactions, the continuing operations of Holdings, the Borrowers and
their Subsidiaries and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Transactions or the financing contemplated
hereby.
(e) Related Agreements. The Administrative Agents shall have
------------------
received, with a copy for each Lender, true and correct copies, certified
as to authenticity by the relevant Borrower, of any debt instrument,
security agreement or other material contract that they have requested to
which the Loan Parties may be a party.
(f) Termination of Existing Credit Facilities. The General
-----------------------------------------
Administrative Agent acting reasonably and in good faith shall have
received evidence satisfactory to the General Administrative Agent that all
of the outstanding Indebtedness of Holdings or any Subsidiary shall have
been repaid in full and the commitments thereunder terminated (other than
any such Indebtedness permitted by Section 11.2 to remain outstanding)
shall be simultaneously terminated, all amounts thereunder shall be
simultaneously paid in full and arrangements satisfactory to the General
Administrative Agent acting reasonably and in good faith shall have been
made for the termination of Liens and security interests granted in
connection therewith.
(g) Fees. The Lenders and the Agents shall have received all fees
----
required to be paid, and all expenses for which invoices have been
presented (including reasonable fees, disbursements and other charges of
counsel to the Agents), on or before the Closing Date. All such amounts
will be paid with proceeds of Loans made on the Closing Date and will be
reflected in the funding instructions given by the Borrowers to the
Administrative Agents on or before the Closing Date.
(h) Business Plan. The Lenders shall have received a satisfactory
-------------
business plan for fiscal years 1999-2007 and a satisfactory written
analysis of the business and prospects of the Borrowers and their
Subsidiaries for the period from the Closing Date through 2007.
91
(i) Solvency Analysis. The Lenders shall have received a reasonably
-----------------
satisfactory solvency analysis certified by the vice president -- finance
of Holdings which shall document the solvency of Holdings and its
Subsidiaries considered as a whole after giving effect to the transactions
contemplated hereby.
(j) Lien Searches. The Administrative Agents shall have received the
-------------
results of a recent lien search in each of the jurisdictions in which
Uniform Commercial Code financing statement or other filings or
recordations should be made to evidence or perfect security interests in
all assets of the Loan Parties, and such search shall reveal no liens on
any of the assets of the Loan Party, except for Liens permitted by Section
11.3.
(k) Environmental Matters. The General Administrative Agent shall
---------------------
have received, with a copy for each Lender, a written environmental
assessment regarding the Borrowers and their Subsidiaries, prepared by an
environmental consultant acceptable to the Administrative Agent, in form,
scope, and substance satisfactory to the General Administrative Agent,
together with a letter from the environmental consultant permitting the
Agents and the Lenders to rely on the environmental assessment as if
addressed to and prepared for each of them.
(l) Closing Certificate. The Administrative Agents shall have
-------------------
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(m) Legal Opinions. The Administrative Agents shall have received
--------------
the following executed legal opinions:
(i) the legal opinion of Ropes & Xxxx, counsel to Holdings
and its Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinions of (x) XxXxxxxx Binch and (y)
Stewart, McKelvey, Stirling, Scales, Canadian counsel to Holdings and
its Subsidiaries, substantially in the form of Exhibit F-2; and
(iii) to the extent consented to by the relevant counsel,
each legal opinion, if any, delivered in connection with the
Transaction Documents, accompanied by a reliance letter in favor of
the Lenders.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the General Administrative
Agent may reasonably require.
(n) Pledged Stock; Stock Powers; Acknowledgment and Consent. The
-------------------------------------------------------
General Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee
and Collateral Agreement, together with an undated stock power for each
such certificate executed in blank by a duly authorized
92
officer of the pledgor thereof, (ii) an Acknowledgment and Consent,
substantially in the form of Annex II to the Guarantee and Collateral
Agreement, duly executed by any issuer of Capital Stock pledged pursuant to
the Guarantee and Collateral Agreement that is not itself a party to the
Guarantee and Collateral Agreement and (iii) each promissory note pledged
pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank
satisfactory to the General Administrative Agent) by the pledgor thereof.
The Canadian Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Canadian
Security Documents, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof or registered in the name of the Canadian Administrative Agent or
its nominees, all as the Canadian Administrative Agent shall direct, (ii)
an Acknowledgment and Consent, substantially in the form attached to any of
the Canadian Security Documents, duly executed by any issuer of Capital
Stock pledged pursuant to any of the Canadian Security Documents that is
not itself a party to any of the Canadian Security Documents and (iv) each
promissory note pledged pursuant to any of the Canadian Security Documents
endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank satisfactory to the Canadian Administrative Agent)
by the pledgor thereof.
(o) Filings, Registrations and Recordings. Each document (including,
-------------------------------------
without limitation, any Uniform Commercial Code financing statement and any
PPSA financing statement) required by the Security Documents or under law
or reasonably requested by the General Administrative Agent to be filed,
registered or recorded in order to create in favor of the General
Administrative Agent or the Canadian Administrative Agent, as the case may
be, for the benefit of the relevant Lenders, a perfected Lien on the
Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
11.3), shall have been filed, registered or recorded or shall have been
delivered to the General Administrative Agent or the Canadian
Administrative Agent, as the case may be, in proper form for filing,
registration or recordation.
(p) Insurance. The General Administrative Agent shall have received
---------
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement and the comparable provisions of the
other Security Documents.
9.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any Extension of Credit requested to be made by it hereunder on
any date (including, without limitation, its initial Extension of Credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
93
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the Extensions of
Credit requested to be made on such date.
Each borrowing by, issuance of a Letter of Credit for the account of, or
creation of an Acceptance for the account of, any Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of such
Extension of Credit that the conditions contained in this Section 9.2 have been
satisfied.
SECTION 10. AFFIRMATIVE COVENANTS
Holdings and each Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit or Acceptance
(which has not been cash collateralized in the manner described in the third to
final and penultimate paragraphs of Section 13) remains outstanding or any Loan
or other amount is owing to any Lender or any Agent hereunder, each of Holdings
and each Borrower shall and shall cause each of its Subsidiaries to:
10.1 Financial Statements. Furnish to each Agent and each Lender:
--------------------
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of Holdings, a copy of the audited consolidated
balance sheet of Holdings and its consolidated Subsidiaries and the
unaudited consolidated balance sheet of each Borrower and its respective
consolidated Subsidiaries as at the end of such year and the related
audited consolidated, in the case of Holdings, and unaudited consolidated,
in the case of each Borrower, statements of income and of cash flows for
such year, setting forth in each case in comparative form the figures as of
the end of and for the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, by independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of Holdings, the unaudited consolidated balance sheet of Holdings and
its consolidated Subsidiaries and the unaudited consolidated balance sheet
of each Borrower and its respective consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of income
and of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative
form the figures as of the end of and for the corresponding period in the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments and the
absence of certain notes); and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of Holdings
(other than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheets of Holdings and its Subsidiaries as at the end
of such month and the related unaudited consolidated statements
94
of income and of cash flows for such month and the portion of the fiscal
year through the end of such month, setting forth in each case in
comparative form the figures as of the end of and for the corresponding
period in the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments and the absence of certain notes);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
10.2 Certificates; Other Information. Furnish to each Agent and each
-------------------------------
Lender, or, in the case of clause (f), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 10.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate (it
being understood that such certifications of accountants are not required
to the extent inconsistent with customary practices in the profession);
(b) concurrently with the delivery of any financial statements
pursuant to Section 10.1, (i) a certificate of a Responsible Officer
stating that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information necessary for determining
compliance by Holdings, Holdings and its Subsidiaries with the provisions
of this Agreement referred to therein as of the last day of the fiscal
quarter or fiscal year of Holdings, as the case may be, and (y) to the
extent not previously disclosed to the relevant Administrative Agent, a
listing of any county or state within the United States or any Province of
Canada where any Loan Party keeps inventory or equipment and of any
Intellectual Property acquired by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 90 days
after the end of each fiscal year of Holdings, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of Holdings and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of projected
cash flow and projected income), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such
fiscal year which are delivered to the Board of Directors of Holdings for
its review (collectively, the "Projections"), which Projections shall in
-----------
each case be accompanied by a certificate of a Responsible Officer stating
that such Projections are based on reasonable estimates, information and
assumptions at the time made in light of the circumstances then existing
and that such Responsible Officer has no reason to believe that such
Projections are incorrect or misleading in any material
95
respect (it being recognized by the Lenders that such financial information
as it relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information
may differ from the projected results set forth therein by a material
amount);
(d) within five days after the same are sent, copies of all financial
statements and reports that Holdings sends to the holders of any class of
its debt securities or public equity securities and, promptly after the
same are filed, copies of all financial statements and reports that
Holdings may make to, or file with, the SEC;
(e) as soon as possible and in any event within five days of
obtaining knowledge thereof: (i) any development, event, or condition that,
individually or in the aggregate with other developments, events or
conditions, could reasonably be expected to result in the payment by
Holdings and its Subsidiaries, in the aggregate, of a Material
Environmental Amount; and (ii) any notice that any governmental authority
may deny any application for an Environmental Permit sought by, or revoke
or refuse to renew any Environmental Permit held by, Holdings or any
Subsidiary; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
10.3 Collateral Reports. Each Borrower, at its own expense, shall
------------------
deliver or cause to be delivered the following:
(a) to the Collateral Monitoring Agent, within fifteen (15) Business
Days after the end of each fiscal month (together with a copy of all or any
part of such delivery requested by any Lender in writing after the Closing
Date), a Borrowing Base Certificate of such Borrower accompanied by such
supporting detail and documentation as shall be requested by the Collateral
Monitoring Agent in its reasonable discretion;
(b) to the Collateral Monitoring Agent, the results of each physical
verification, if any, which such Borrower or any of its Subsidiaries may in
their discretion have made, or caused any other Person to have made on
their behalf, of all or any portion of their Inventory (and, if a Default
or an Event of Default shall have occurred and be continuing, the Borrowers
shall, upon the request of the Collateral Monitoring Agent, conduct, and
deliver the results of, such physical verifications as the Collateral
Monitoring Agent may require, not to exceed four per fiscal year); and
(c) to the Collateral Monitoring Agent such appraisals of its assets
as the relevant Administrative Agent may request at any time after the
occurrence and during the continuance of a Default or an Event of Default,
such appraisals to be conducted by an appraiser, and in form and substance,
satisfactory to the Collateral Monitoring Agent.
10.4 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
material obligations of
96
whatever nature, except where (a) the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of
Holdings or its Subsidiaries, as the case may be or (b) the failure to so pay,
discharge or otherwise satisfy any such obligations could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
10.5 Conduct of Business and Maintenance of Existence, etc. (a)
-----------------------------------------------------
(i) Preserve, renew and keep in full force and effect its existence and (ii)
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 11.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law, except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
10.6 Maintenance of Property; Insurance. (a) Keep all material
----------------------------------
tangible Property useful and necessary in its business in good working order and
condition, ordinary wear and tear and damage occurring as a result of a casualty
event excepted and (b) maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as are usually insured against in the same general
area by companies engaged in the same or a similar business.
10.7 Inspection of Property; Books and Records; Discussions. (a)
------------------------------------------------------
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of the Administrative Agents to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of
Holdings and its Subsidiaries with officers and employees of Holdings and its
Subsidiaries and with its independent certified public accountants, provided
--------
that all such visits and inspections shall be coordinated through the
Administrative Agents.
10.8 Notices. Promptly give notice to the Administrative Agent and
-------
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Holdings or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between Holdings or
any of its Subsidiaries and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
97
(c) any litigation or proceeding affecting Holdings or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after Holdings or any Borrower knows or has reason to know
thereof unless any such event could not, individually or together with all
such other events, reasonably be expected to have a Material Adverse
Effect: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or Holdings or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings or the relevant Subsidiary proposes to take
with respect thereto.
10.9 Environmental Laws. (a) Comply in all material respects with,
------------------
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except for such failures to comply which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except for such failures to comply which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
10.10 Interest Rate Protection. Within 60 days after the Closing
------------------------
Date, enter into Hedge Agreements to the extent necessary to provide that at
least 50% of the aggregate principal amount of Funded Debt of Holdings and its
Subsidiaries is subject to either a fixed interest rate or interest rate
protection for a period of not less than two years, which Hedge Agreements shall
have terms and conditions reasonably satisfactory to the General Administrative
Agent.
10.11 Additional Collateral, etc. (a) With respect to any Property
---------------------------
acquired after the Closing Date by Holdings, the U.S. Borrower or any of its
Subsidiaries (other than (w) Property of any Canadian Entity, (x) any Property
described in paragraph (b) or paragraph (c) of
98
this Section, (y) any Property subject to a Lien expressly permitted by Section
11.3(g) and (z) Property acquired by an Excluded Foreign Subsidiary) as to which
the General Administrative Agent, for the benefit of the Lenders, does not have
a perfected Lien, promptly (i) execute and deliver to the General Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the General Administrative Agent deems necessary or advisable to
grant to the General Administrative Agent, for the benefit of the Lenders, a
security interest in such Property and (ii) take all actions necessary or
advisable to grant to the General Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in such Property (subject
to Liens permitted under Section 11.3), including without limitation, the filing
of Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the General Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least U.S.$500,000 acquired
after the Closing Date by Holdings, the U.S. Borrower or any of its Subsidiaries
(other than any such real property (x) owned by an Excluded Foreign Subsidiary
(y) owned by a Canadian Entity or (z) subject to a Lien expressly permitted by
Section 11.3(g)), promptly (i) execute and deliver a first priority mortgage or
deed of trust in favor of the General Administrative Agent, for the benefit of
the Lenders, covering such real property, (ii) if requested by the General
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the General Administrative Agent) as well as a current
ALTA survey thereof, together with a surveyor's certificate and (y) any consents
or estoppels reasonably deemed necessary or advisable by the general
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the General
Administrative Agent and (iii) if requested by the General Administrative Agent,
deliver to the General Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the General Administrative Agent.
(c) With respect to any new Subsidiary (other than (x) an Excluded
Foreign Subsidiary or (y) a Canadian Entity) created or acquired after the
Closing Date (which, for the purposes of this paragraph, shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), by
Holdings, the U.S. Borrower or any of its Subsidiaries, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by Holdings, the U.S. Borrower or any of its Subsidiaries (subject
to Liens permitted under Section 11.3), (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
Holdings, the U.S. Borrower or such Subsidiary, as the case may be, (iii) cause
such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant to the
General Administrative Agent for the benefit of the Lenders a perfected first
priority
99
security interest in the Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary, including, without limitation,
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the General Administrative Agent, and (iv) if requested by the
General Administrative Agent, deliver to the General Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the General
Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary or any
Canadian Entity created or acquired after the Closing Date by Holdings, the U.S.
Borrower or any of its Subsidiaries (other than any Excluded Foreign
Subsidiaries), promptly (i) execute and deliver to the General Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the General Administrative Agent deems necessary or advisable in
order to grant to the General Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in the Capital Stock of
such new Subsidiary that is owned by Holdings, the U.S. Borrower or any of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), (provided that in
no event shall more than 65% of the total outstanding Capital Stock of any such
new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to
the General Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of Holdings, the Borrower or such Subsidiary, as the
case may be, and take such other action as may be necessary or, in the opinion
of the General Administrative Agent, desirable to perfect the Lien of the
General Administrative Agent thereon, and (iii) if requested by the General
Administrative Agent, deliver to the General Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the General
Administrative Agent.
(e) With respect to any Property acquired after the Closing Date by
the Canadian Borrower or any of its Subsidiaries (other than (x) any Property
described in paragraph (f) of this Section or (y) any Property subject to a Lien
expressly permitted by Section 11.3(g) as to which the Canadian Administrative
Agent, for the benefit of the Canadian Lenders, does not have a perfected Lien,
promptly (i) execute and deliver to the Canadian Administrative Agent such
amendments to the relevant Canadian Security Document or such other documents as
the Canadian Administrative Agent deems necessary or advisable to grant to the
Canadian Administrative Agent, for the benefit of the Canadian Lenders, a
security interest in such Property and (ii) take all actions necessary or
advisable to grant to the Canadian Administrative Agent, for the benefit of the
Canadian Lenders, a perfected first priority security interest in such Property,
including without limitation, the filing of financing statements in such
jurisdictions as may be required by the relevant Canadian Security Document or
by law or as may be requested by the Canadian Administrative Agent.
(f) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least U.S.$500,000 acquired
after the Closing Date by the Canadian Borrower or any of its Subsidiaries
(other than any such real property subject to a Lien expressly permitted by
Section 11.3(g)), promptly (i) execute and deliver a first priority mortgage
100
in favor of the Canadian Administrative Agent, for the benefit of the Canadian
Lenders, covering such real property, (ii) if requested by the Canadian
Administrative Agent, provide the Canadian Lenders with (x) title and extended
coverage insurance covering such real property in an amount at least equal to
the purchase price of such real property (or such other amount as shall be
reasonably specified by the Canadian Administrative Agent) as well as a current
ALTA survey thereof, together with a surveyor's certificate and (y) any consents
or estoppels reasonably deemed necessary or advisable by the Canadian
Administrative Agent in connection with such mortgage, each of the foregoing in
form and substance reasonably satisfactory to the Canadian Administrative Agent
and (iii) if requested by the Canadian Administrative Agent, deliver to the
Canadian Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the General Administrative Agent.
(g) With respect to any new Subsidiary created or acquired after the
Closing Date, by the Canadian Borrower or any of its Subsidiaries, promptly (i)
execute and deliver to the Canadian Administrative Agent such amendments to the
relevant Canadian Security Document as the Canadian Administrative Agent deems
necessary or advisable to grant to the Canadian Administrative Agent, for the
benefit of the Canadian Lenders, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by the Canadian Borrower
or any of its Subsidiaries, (ii) deliver to the Canadian Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Canadian Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the relevant Canadian Security Document and
(B) to take such actions necessary or advisable to grant to the Canadian
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the relevant Canadian Security
Document with respect to such new Subsidiary, including, without limitation, the
filing of financing statements in such jurisdictions as may be required by the
relevant Canadian Security Document or by law or as may be requested by the
Canadian Administrative Agent, and (iv) if requested by the Canadian
Administrative Agent, deliver to the Canadian Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Canadian
Administrative Agent.
10.12 Further Assurances. From time to time execute and deliver, or
------------------
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the General Administrative Agent may
reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agents and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by Holdings or any Subsidiary which may be deemed to be part
of the Collateral) pursuant hereto or thereto. Upon the exercise by any
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, Holdings will execute and deliver, or will cause the execution and
delivery of, all applications, certifications, instruments
101
and other documents and papers that the relevant Administrative Agent or such
Lender may be required to obtain from Holdings or any of its Subsidiaries for
such governmental consent, approval, recording, qualification or
authorization.
SECTION 11. NEGATIVE COVENANTS
Holdings and each Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit or
Acceptance (which has not been cash collateralized in the manner described in
the third to final and penultimate paragraphs of Section 13) remains
outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, each of Holdings and each Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:
11.1 Financial Condition Covenants.
-----------------------------
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
---------------------------
Ratio as at the last day of any period of four consecutive fiscal quarters of
Holdings (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to exceed the
ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ4 1999 through FQ3 2000 4.50 to 1.00
FQ4 2000 through FQ3 2001 4.25 to 1.00
FQ4 2001 through FQ1 2002 4.00 to 1.00
FQ2 2002 through FQ3 2002 3.75 to 1.00
FQ4 2002 through FQ2 2003 3.50 to 1.00
FQ3 2003 3.25 to 1.00
FQ4 2003 3.00 to 1.00
FQ1 2004 2.75 to 1.00
FQ2 2004 and thereafter 2.50 to 1.00
; provided, that for purposes of determining the ratio described
above, Consolidated EBITDA for the fiscal quarters ending March 31, 1999, June
30, 1999 and September 30, 1999 shall be deemed to equal $5,282,000,
$5,282,000 and $7,583,000, respectively.
(b) Consolidated First Priority Debt Ratio. Permit the Consolidated
--------------------------------------
First Priority Debt Ratio as at the last day of any period of four consecutive
fiscal quarters of Holdings (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with any fiscal quarter set forth below
to exceed the ratio set forth below opposite such fiscal quarter:
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Consolidated First Priority
Fiscal Quarter Debt Ratio
-------------- ----------
FQ4 1999 4.15 to 1.00
FQ1 2000 through FQ3 2000 4.10 to 1.00
FQ4 2000 through FQ1 2001 3.85 to 1.00
FQ2 2001 through FQ3 2001 3.75 to 1.00
FQ4 2001 through FQ1 2002 3.50 to 1.00
FQ2 2002 through FQ3 2002 3.25 to 1.00
FQ4 2002 through FQ2 2003 3.00 to 1.00
FQ3 2003 2.75 to 1.00
FQ4 2003 2.50 to 1.00
FQ1 2004 2.25 to 1.00
FQ2 2004 and thereafter 2.00 to 1.00
; provided, that for purposes of determining the ratio described
above, Consolidated EBITDA for the fiscal quarters ending March 31, 1999, June
30, 1999 and September 30, 1999 shall be deemed to equal $5,282,000, $5,282,000
and $7,583,000, respectively.
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
------------------------------------
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
Holdings (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- ---------------------
FQ4 1999 through FQ3 2000 2.00 to 1.00
FQ4 2000 through FQ3 2001 2.50 to 1.00
FQ4 2001 through FQ3 2002 3.00 to 1.00
FQ4 2002 through FQ1 2003 3.25 to 1.00
FQ2 2003 and thereafter 3.50 to 1.00
; provided, that for purposes of determining the ratio described
above, (i) Consolidated EBITDA for the fiscal quarters ending March 31, 1999,
June 30, 1999 and September 30, 1999 shall be deemed to equal $5,282,000,
$5,282,000 and $7,583,000, respectively and (ii) Consolidated Cash Interest
Expense shall be deemed to be $2,187,000 in each such fiscal quarter.
(d) Minimum Consolidated EBITDA. Permit Consolidated EBITDA of
---------------------------
Holdings and its Subsidiaries for any period of four consecutive fiscal quarters
ending during any period set forth below to be less than the amount set forth
below opposite such period:
Period Consolidated EBITDA
------ -------------------
103
FQ4 1999 through FQ3 2000 $22,000,000
FQ4 2000 through FQ3 2001 $26,100,000
FQ4 2001 through FQ3 2002 $30,000,000
FQ4 2002 through FQ3 2003 $33,000,000
FQ4 2003 through FQ3 2004 $36,300,000
FQ4 2004 and thereafter $38,100,000
11.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b)(i) Indebtedness of the U.S. Borrower to any Subsidiary of the
US. Borrower; (ii) Indebtedness of the Canadian Borrower to any Subsidiary
of the Canadian Borrower; (iii) Indebtedness of any Wholly Owned Subsidiary
Guarantor to the U.S. Borrower or any other Subsidiary of the U.S.
Borrower; and (iv) Indebtedness of the Canadian Borrower to any Canadian
Entity which is a guarantor of the Canadian Borrower Obligations;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations other than Sale/Leaseback transactions constituting Capital
Lease Obligations permitted by Section 11.2(f)) secured by Liens permitted
by Section 11.3(g) in an aggregate principal amount not to exceed
U.S.$10,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 11.2(d), and any renewals, extensions, refundings or refinancings
of any such Indebtedness, provided that (i) the principal amount of such
--------
Indebtedness is not increased pursuant to any such renewal, extension,
refunding or refinancing and (ii) the weighted average life to maturity of
such Indebtedness after giving effect to such renewal, extension, refunding
or refinancing is not earlier than the weighted average life to maturity of
such Indebtedness immediately prior to such renewal, extension, refunding
or refinancing;
(e)(i) Guarantee Obligations made in the ordinary course of business
by the U.S. Borrower or any of its Subsidiaries of obligations of the U.S.
Borrower or any Subsidiary Guarantor and (ii) Guarantee Obligations made in
the ordinary course of business by the Canadian Borrower or any Canadian
Subsidiary Guarantor; and
(f) Indebtedness of Holdings or any of its Subsidiaries arising out
of any Sale/Leaseback Transaction permitted under Section 11.11 (to the
extent such Sale/Leaseback Transactions would constitute Indebtedness) in
an aggregate outstanding amount not to exceed $2,000,000;
(g)(i) Indebtedness of Holdings with respect to Permitted Seller
Debt in an aggregate principal amount at any time outstanding not exceeding
U.S.$15,000,000, (ii) Indebtedness of Holdings or either Borrower incurred
in connection with any Permitted
104
Acquisition, or of any Person which becomes a Subsidiary after the Closing
Date pursuant to any Permitted Acquisition, provided, that the aggregate
--------
principal amount of Indebtedness incurred pursuant to this clause (ii)
shall not exceed at any time outstanding an amount equal to the sum of (a)
U.S.$15,000,000 plus (b) the lesser of (A) $25,000,000 and (B) the amount
of Net Cash Proceeds of all Capital Stock Sales consummated after the
Closing Date, (iii) Indebtedness of Holdings with respect to Acquisition
Subordinated Debt in an aggregate principal amount at any time outstanding
not exceeding U.S.$15,000,000 (provided, that the aggregate principal
--------
amount of Indebtedness permitted by the foregoing clauses (i), (ii) and
(iii) shall not at any time exceed the sum of (x) $25,000,000 and (y) the
amount described in clause (b) of the proviso to the foregoing clause
(ii)), (iv) Indebtedness of any Person acquired in a Permitted Acquisition,
provided that (A) such Indebtedness existed at the time such Person became
--------
a Subsidiary and was not incurred in anticipation of such Permitted
Acquisition and (B) the amount of such Indebtedness is not increased and
(v) any renewals, extensions, refundings or refinancings of any
Indebtedness permitted under this paragraph (g), provided that (A) the
--------
principal amount of such Indebtedness is not increased pursuant to any such
renewal, extension, refunding or refinancing, (B) the weighted average life
to maturity of such Indebtedness after giving effect to such renewal,
extension, refunding or refinancing is not earlier than the weighted
average life to maturity of such Indebtedness immediately prior to such
renewal, extension, refunding or refinancing and (C) the aggregate
principal amount of Indebtedness outstanding under this paragraph (g) shall
not at any time exceed the amounts permitted in the foregoing clauses (i)
through (iv);
(h) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
--------
Indebtedness is extinguished within two Business Days of notice to the
relevant Borrower or the relevant Subsidiary of its incurrence;
(i) Indebtedness in respect of performance bonds, bid bonds, appeal
bonds, surety bonds, completion guarantees or other similar obligations
arising in the ordinary course of business, provided that no such bond or
--------
similar obligation is provided to secure the repayment of other
Indebtedness;
(j) Indebtedness arising out of purchase price adjustments and
customary indemnifications by Holdings or any of its Subsidiaries in
connection with the Transactions or any Permitted Acquisition, so long as
the aggregate obligations in respect of such purchase price adjustments
would not result in a breach of the limitations set forth in Section 11.8;
(k) Indebtedness incurred in connection with the financing of
insurance premiums in the ordinary course of business;
(l) [Reserved];
105
(m) Indebtedness of any Person in respect of any Restricted Payment
made to it and permitted pursuant to Section 11.6 to the extent such
Restricted Payment is either made or recharacterized as a loan instead of a
distribution;
(n) Replacement Subordinated Debt, the proceeds of which are used to
prepay the Tranche C Term Loans;
(o) additional Indebtedness of the U.S. Borrower or any of its
Subsidiaries in an aggregate principal amount (for the U.S. Borrower and
all Subsidiaries) not to exceed U.S.$2,000,000 at any one time outstanding;
and
(p) additional Indebtedness of the Canadian Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Canadian Borrower
and all Subsidiaries) not to exceed U.S.$2,000,000 at any one time
outstanding.
11.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes, assessments or governmental charges or levies
not yet delinquent or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect
--------
thereto are maintained on the books of Holdings or its Subsidiaries, as the
case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business, and Liens
imposed by law not securing Indebtedness, in each case which are not
overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the value of
the Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 11.3(f),
securing Indebtedness permitted by Section 11.2(d), provided that no such
--------
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
106
(g) Liens securing Indebtedness of either Borrower or any other
Subsidiary thereof incurred pursuant to Section 11.2(c) to finance the
acquisition, repair or improvement of fixed or capital assets (including
any interest or title of a lessor under any Capital Lease Obligation) and
real property, provided that (i) such Liens shall be created within 180
--------
days after the acquisition, repair or improvement of such fixed or capital
assets or real property, (ii) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness and (iii)
the amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to this Agreement and the Security
Documents;
(i) any interest or title of a lessor under any lease entered into by
Holdings or any Subsidiary in the ordinary course of its business and
covering only the assets so leased;
(j) Liens securing Indebtedness permitted under Section 11.2(g)(ii)
(or under Section 11.2(g)(v), to the extent such refinancing Indebtedness
refinances Indebtedness incurred pursuant to Section 11.2(g)(ii)),
provided, that such Liens may encumber only the assets, or portions
--------
thereof, acquired in the Permitted Acquisition that was financed with the
proceeds of such Indebtedness;
(k) Liens arising from judgments or decrees which do not result in an
Event of Default under Section 13(h);
(l) Liens on any assets of a Person which becomes a Subsidiary after
the date hereof pursuant to a Permitted Acquisition and Liens on fixed
assets otherwise acquired pursuant to any such Permitted Acquisition,
provided that (i) such Liens existed at the time such Person became a
--------
Subsidiary or such assets were acquired, as the case may be, and were not
created in anticipation of the Permitted Acquisition, (ii) any such Lien
does not by its terms cover any property or assets after the time such
Person becomes a Subsidiary or such assets were acquired, as the case may
be, which were not covered immediately prior thereto, (iii) any such Lien
does not by its terms secure any Indebtedness other than Indebtedness
existing immediately prior to the time such Person becomes a Subsidiary or
such assets are acquired, as the case may be and (iv) such Liens secure
only Indebtedness permitted under Section 11.2(g)(iv) (or under Section
11.2(g)(v), to the extent such refinancing Indebtedness refinances
Indebtedness incurred pursuant to Section 11.2(g)(iv));
(m) all building codes and zoning ordinances and other laws,
ordinances, regulations, rules, orders or determinations of any federal,
state, county, municipal or other governmental authority now or hereafter
enacted;
(n) Liens securing reimbursement of obligations in respect of (i)
documentary letters of credit, provided that such Liens cover only the
--------
documents, the goods covered thereby and the proceeds thereof and (ii)
bankers' acceptances created in respect of
107
drawings under such letters of credit, provided that such Liens cover only
--------
the specific goods financed under such letter of credit and the proceeds
thereof;
(o) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or
operation of law, incurred in the ordinary course of business;
(p) Liens encumbering customary initial deposits in respect of
commodity trading accounts or other brokerage accounts incurred in the
ordinary course of business;
(q) Liens solely on any xxxx xxxxxxx money deposits made by Holdings
or any Subsidiary in connection with any letter of intent or purchase
agreement entered into by it in connection with a Permitted Acquisition;
(r) Liens on goods in favor of customs and revenue authorities which
secure payment of customs duties in connection with the importation of such
goods;
(s) Liens securing obligations (other than Indebtedness) under
operating, reciprocal easements or similar agreements entered into in the
ordinary course of business by Holdings and its Subsidiaries which do not
materially interfere with the ordinary conduct of the business of Holdings
and its Subsidiaries;
(t) Liens on insurance policies and the proceeds thereof securing the
financing of premiums with respect thereto; and
(u) Liens not otherwise permitted by this Section 11.3 so long as
neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined, in
the case of each such Lien, as of the date such Lien is incurred) of the
assets subject thereto exceeds (as to Holdings and all Subsidiaries)
$5,000,000 at any one time.
11.4 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of either Borrower may be merged or consolidated
with or into such Borrower (provided that such Borrower shall be the
--------
continuing or surviving corporation) or with or into any Subsidiary
(provided that if any Subsidiary party to such merger or consolidation is a
--------
Subsidiary Guarantor or Canadian Subsidiary Guarantor, the surviving entity
shall also be a Subsidiary Guarantor or Canadian Subsidiary Guarantor, as
the case may be);
(b) (i) either Borrower may Dispose of any or all of its assets
(including the Capital Stock of any Subsidiary) to any Subsidiary Guarantor
and (ii) any Subsidiary of either Borrower may Dispose of any or all of its
assets (including Capital Stock of any
108
other Subsidiary) (upon voluntary liquidation, dissolution or otherwise) to
the U.S. Borrower and or any Subsidiary Guarantor and any Subsidiary of the
Canadian Borrower may Dispose of any or all of its assets (including
Capital Stock of any other Subsidiary) (upon voluntary liquidation,
dissolution or otherwise) to the Canadian Borrower or any Canadian
Subsidiary Guarantor;
(c) either Borrower or any Subsidiary of either Borrower may merge
with or consolidate with any Person in connection with any Permitted
Acquisition, provided that (i) if a Borrower is a party thereto, such
--------
Borrower is the surviving entity of such merger or consolidation and (ii)
if a Subsidiary Guarantor or Canadian Subsidiary Guarantor is a party
thereto, the surviving entity of such merger or consolidation is a
Subsidiary Guarantor or Canadian Subsidiary Guarantor, as the case may be;
and
(d) Dispositions permitted under Section 11.5.
11.5 Limitation on Disposition of Property. Dispose of any of its
-------------------------------------
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete, worn out or surplus property in the
ordinary course of business;
(b) the sale or lease of inventory or equipment in the ordinary
course of business;
(c) Dispositions permitted by Section 11.4(a) or (b);
(d)(i) the sale or issuance to the U.S. Borrower or any Subsidiary
Guarantor of the Capital Stock of any Subsidiary of Holdings; or (ii) the
sale or issuance to the Canadian Borrower or any Canadian Subsidiary
Guarantor of any Capital Stock of any Subsidiary of any Canadian Entity; or
(iii) the sale or issuance to Holdings of the Capital Stock of either
Borrower;
(e) the Disposition of other assets having a fair market value not to
exceed $2,000,000 in the aggregate for any fiscal year of Holdings;
provided, that such amount shall be increased to $5,000,000 when the
--------
Consolidated Leverage Ratio is less than 3.50 to 1.0;
(f) any Recovery Event, provided, that the requirements of Section
--------
7.5 are complied with in connection therewith;
(g) the sale or discount, in each case without recourse, of Accounts
Receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof;
109
(h) the sale or exchange of specific items of equipment for
replacement items of equipment in the ordinary course of business which are
the functional equivalent of the item of equipment so exchanged;
(i) Dispositions of assets sold pursuant to a Sale/Leaseback
Transaction permitted under Section 11.11;
(j) Restricted Payments permitted under Section 11.6;
(k) leases and licenses of real or personal property (including
Intellectual Property) in the ordinary course of business;
(l) Dispositions of (i) Cash Equivalents and (ii) Investments (other
than the Capital Stock of Subsidiaries); and
(m) the exchange of Exchangeable Shares.
11.6 Limitation on Restricted Payments. Declare or pay any dividend
---------------------------------
(other than dividends payable solely in Capital Stock of the Person making such
dividend or by increasing the liquidation preference of any such Capital Stock)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of Holdings, either Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of Holdings, either Borrower or any Subsidiary, or enter into
any derivatives or other transaction with any financial institution, commodities
or stock exchange or clearinghouse (a "Derivatives Counterparty") obligating
------------------------
Holdings, either Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of any such Capital Stock
(collectively, "Restricted Payments"), except that:
-------------------
(a) any Subsidiary may make Restricted Payments to the holders of its
Capital Stock ratably in accordance with their respective ownership
interests;
(b) Holdings may make Restricted Payments in the form of common stock
of Holdings;
(c) so long as no Default or Event of Default shall have occurred and
be continuing, either Borrower may pay dividends to Holdings to permit
Holdings to (i) (A) purchase Holdings' Capital Stock or options to purchase
Capital Stock from present or former officers or employees of Holdings,
either Borrower or any Subsidiary of either Borrower upon the death,
disability or termination of employment of such officer or employee, or (B)
make payments on promissory notes ("Management Notes") issued by Holdings
----------------
to any such officers or employees of Holdings, the Borrower or any of their
respective Subsidiaries to finance the purchase of Capital Stock or options
to purchase Capital Stock upon the death, disability or termination of
employment of any such officer
110
or employee, provided, that the aggregate amount of payments by any
--------
Borrower under this clause (i) (not including the forgiveness of any
Indebtedness described in Section 11.8(n)) subsequent to the date hereof
(net of any proceeds received by Holdings subsequent to the date hereof in
connection with resales of any Capital Stock or options to purchase Capital
Stock so purchased) shall not exceed U.S.$2,500,000 (in the case of the
U.S. Borrower) or U.S.$2,500,000 (in the case of the Canadian Borrower);
provided, that Holdings shall also be permitted to make such purchases with
--------
the Net Cash Proceeds to either Borrower from any "key-man" life insurance
policies received after the Closing Date; (ii) pay fees, expenses and
other amounts to the Sponsor and its Control Investment Affiliates
expressly permitted by Section 11.10 and (iii) pay directors' fees and
expenses and directors' and officers' indemnity obligations;
(d) the Borrowers may make Restricted Payments to Holdings to permit
Holdings to (i) pay corporate overhead expenses incurred in the ordinary
course of business not to exceed $1,000,000 in any fiscal year and (ii) pay
any taxes which are due and payable for which Holdings is liable;
(e) any Person may make Restricted Payments pursuant to the
Transactions;
(f) Holdings may repurchase Capital Stock as a result of the
surrender of such Capital Stock for cancellation in connection with the
exercise of stock options; and
(g) the Canadian Borrower, Holdings or SMTC Nova Scotia may exchange
or call Exchangeable Shares.
11.7 Limitation on Capital Expenditures. Make or commit to make any
----------------------------------
Capital Expenditure, except (a) Capital Expenditures of Holdings and its
Subsidiaries in the ordinary course of business not exceeding an aggregate
amount during any fiscal year of Holdings (or in the case of 1999, during the
period from July 1, 1999 through December 31, 1999) the amount set forth below
opposite such fiscal year:
Fiscal Year Amount
----------- ------
1999 $ 4,200,000
2000 $10,300,000
2001 $11,800,000
2002 $13,000,000
2003 $14,300,000
2004 $15,000,000
2005 $15,000,000
2006 $15,000,000;
provided, that (i) such amount referred to above, to the extent not so expended
--------
in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year (as to such fiscal year, the
"CapEx Carryforward Amount") and (ii) Capital Expenditures made pursuant to this
-------------------------
clause (a) during any fiscal year shall be deemed made, first, in respect of
-----
amounts
111
permitted for such fiscal year as provided above and second, in respect of
------
amounts carried over from the prior fiscal year pursuant to subclause (i) above,
(b) Capital Expenditures made with the proceeds of any Reinvestment Deferred
Amount, (c) Capital Expenditures in any fiscal year made with the then unused
Permitted Expenditure Amounts and (d) Capital Expenditures attributable to all
or a portion of the cost of Permitted Acquisitions.
11.8 Limitation on Investments. Make any advance, loan, extension of
-------------------------
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:
-----------
(a) extensions of trade credit in the ordinary course of business,
including Accounts Receivable;
(b) investments in Cash and Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 11.2(b) and (e);
(d) loans and advances to employees of Holdings, either Borrower or
any Subsidiaries of either Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for Holdings, the Borrowers and their
Subsidiaries not to exceed U.S.$1,000,000 at any one time outstanding;
(e) the Transactions;
(f) Permitted Acquisitions;
(g) Investments in assets useful in a Borrower's business made by
such Borrower or any of its Subsidiaries with the proceeds of any
Reinvestment Deferred Amount; provided, that any Reinvestment Deferred
--------
Amount attributable to the U.S. Borrower and its Subsidiaries may not be
invested in any Canadian Entity;
(h) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 11.8(c)) by Holdings, either Borrower or
any of its Subsidiaries in such Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor;
(i) Investments by Holdings or any Subsidiary in the U.S. Borrower or
any Subsidiary Guarantor and Investments by the Canadian Borrower in any
Canadian Subsidiary Guarantor;
(j) Investments in Capital Stock of Holdings to facilitate the
exchange of Exchangeable Shares that are promptly Disposed of in connection
with such exchange;
112
(k) Investments received in connection with the collection of
Accounts Receivable in the ordinary course of business and Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(l) Investments received in connection with any Asset Sale or other
Disposition permitted hereunder;
(m) loans and advances to suppliers, customers or users of the
products of either Borrower or any Subsidiary or customers of distributors
of such products in the ordinary course of business consistent with past
practice;
(n) loans to employees of Holdings, either Borrower or any
Subsidiaries of either Borrower to finance the acquisition by such
employees from Holdings, either Borrower or any such Subsidiary of Capital
Stock of Holdings or Exchangeable Shares;
(o) Investments arising out of any repurchase of Indebtedness in
connection with the refinancing thereof to the extent permitted under
Section 11.2;
(p) Investments by Subsidiaries which are not Subsidiary Guarantors
in either Borrower or any other Subsidiary;
(q) loans to Holdings by either Borrower or any of their respective
Subsidiaries to the extent permitted by Section 11.2(m);
(r) Investments existing on the date hereof and listed on Schedule
11.8; and
(s) in addition to Investments otherwise expressly permitted by this
Section, Investments by Holdings or any of its Subsidiaries in an aggregate
amount (valued at cost) not to exceed $2,500,000 prior to the second
anniversary of the Closing Date or $5,000,000 thereafter during the term of
this Agreement.
11.9 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments, etc. (a) Make or offer to make any optional or voluntary payment,
-----------------
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, any Indebtedness (other than Indebtedness hereunder), or segregate
funds for any such payment, prepayment, repurchase, redemption or defeasance, or
enter into any derivative or other transaction with any Derivatives Counterparty
obligating Holdings, either Borrower or any Subsidiary to make payments to such
Derivatives Counterparty as a result of any change in market value of any
subordinated debt, (b) amend, modify or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of any
subordinated debt (other than any such amendment, modification, waiver or other
change which (i) (A) would extend the maturity or reduce the amount of any
payment of principal thereof, reduce the rate or extend the date for payment of
interest thereon or relax any covenant or other restriction applicable to
Holdings, either Borrower
113
or any of its Subsidiaries and (B) does not involve the payment of a consent fee
or (ii) is not adverse in any respect to the interests of the Lenders in the
reasonable opinion of the General Administrative Agent), or (c) amend its
certificate of incorporation in any manner determined by the General
Administrative Agent to be adverse to the Lenders.
11.10 Limitation on Transactions with Affiliates. Enter into any
------------------------------------------
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
either Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of Holdings, such Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to Holdings, such Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate. Notwithstanding the
foregoing, so long as no Default or Event of Default is continuing, (i) Holdings
and its Subsidiaries may pay to the Sponsor and its Control Investment
Affiliates fees and expenses pursuant to the Management Agreement, (ii) the
Transactions shall be permitted, (iii) Holdings, the Borrowers and their
respective Subsidiaries may pay customary fees to, and the reasonable out-of-
pocket expenses of, their respective Boards of Directors and may provide
customary indemnities for the benefit of members of their respective Board of
Directors, (iv) so long as no Default or Event of Default is continuing, the
payment by Holdings or the Borrowers, in connection with the Transactions, any
Permitted Acquisition or any divestiture or financing transaction that is
consummated by Holdings, either Borrower or any of their respective
Subsidiaries, of transaction fee and expenses to the Sponsor and its Affiliates
pursuant to the Management Agreement, (v) transactions with Subsidiaries that
are not Subsidiary Guarantors, joint venture partners or purchasers or sellers
of goods or services, in each case in the ordinary course of business
(including, without limitation, pursuant to joint venture agreements) and
otherwise in compliance with the terms of the Loan Documents which are fair to
the relevant Borrower or its Subsidiaries, in the good faith determination of
the Board of Directors of such Borrower or the senior management thereof, or are
on terms at least as favorable as might reasonably have been obtained at such
time from an unaffiliated party, (vi) any employment agreement entered into by
Holdings or any of its Subsidiaries or employee compensation payments in the
ordinary course of business and consistent with past practices of Holdings or
such Subsidiary, (vii) Restricted Payments that are permitted by the provisions
of Section 11.6, (viii) payments or loans to employees or consultants which are
approved by the Board of Directors of Holdings in good faith, (ix) transfers of
Inventory from a Borrower or a Subsidiary thereof to a Subsidiary operating in a
different jurisdiction in exchange for value not less than the cost of producing
such Inventory and not more than the value at which such Subsidiary expects to
Dispose of such Inventory and (x) the exchange of Exchangeable Shares.
11.11 Limitation on Sales and Leasebacks. Enter into any arrangement
----------------------------------
with any Person providing for the leasing by Holdings, either Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by Holdings, such Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of Holdings, such Borrower
or such Subsidiary (a "Sale/Leaseback Transaction"), except for Sale/Leaseback
--------------------------
114
Transactions by the Borrower and its Subsidiaries (i) relating to assets owned
by Holdings and its Subsidiaries on the Closing Date, in an aggregate amount not
exceeding U.S.$2,000,000 at any time outstanding, (ii) relating to assets of the
business acquired in any Permitted Acquisition, provided, that (A) each such
--------
Sale/Leaseback Transaction is consummated not more than 120 days after the
consummation of such Permitted Acquisition and (B) if such Permitted Acquisition
was financed with the proceeds of any Indebtedness (other than the proceeds of
U.S. Revolving Credit Loans or Canadian Revolving Credit Loans), the proceeds of
such Sale/Leaseback Transaction are applied toward repayment of such
Indebtedness or (iii) relating to assets owned by Holdings and its Subsidiaries
on the Closing Date or acquired thereafter (other than in connection with a
Permitted Acquisition) with an aggregate sales price not to exceed $3,000,000
during the term of this Agreement.
11.12 Limitation on Changes in Fiscal Periods. Permit the fiscal
---------------------------------------
year of either Borrower to end on a day other than December 31 or change
Holdings' or such Borrower's method of determining fiscal quarters.
11.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
-------------------------------------
exist or become effective any agreement that prohibits or limits the ability of
Holdings, either Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Guarantee and Collateral Agreement any
Canadian Security Documents, other than (a) this Agreement and the other Loan
Documents, (b) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby), (c) any
agreement relating to a Disposition of Property by Holdings or any of its
Subsidiaries (in which case, any prohibition or restriction shall only be
effective against the Property to be Disposed in such Disposition), (d)
customary non-assignment provisions in leases entered into in the ordinary
course of business and (e) any agreements relating to Liens permitted under
Section 11.3(g), 11.3(l), 11.3(n), 11.3(p), 11.3(q), 11.3(t) or 11.3(u) (in
which case, any prohibition or restriction shall only be effective against the
Property subject to the relevant Lien).
11.14 Limitation on Restrictions on Subsidiary Distributions. Enter
------------------------------------------------------
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, either Borrower or any other Subsidiary, (b) make Investments in either
Borrower or any other Subsidiary or (c) transfer any of its assets to either
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) applicable law, (iv) customary provisions restricting the assignment of
rights under contracts, (v) customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (vi) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(c) above on
115
the property so acquired, (vii) any agreement for the sale of a Subsidiary that
restricts distributions by that Subsidiary pending its sale, (viii) provisions
with respect to the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business, (ix) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into the ordinary course of
business and (x) restrictions on rights to dispose of assets subject to Liens
permitted under Section 11.3(g), 11.3(l), 11.3(n), 11.3(p), 11.3(q), 11.3(t) or
11.3(u).
11.15 Limitation on Lines of Business. Enter into any business,
-------------------------------
either directly or through any Subsidiary, except for those businesses in which
Holdings and its Subsidiaries are engaged on the date of this Agreement (after
giving effect to the Transactions) or that are reasonably related thereto.
11.16 Limitation on Activities of Holdings. In the case of Holdings,
------------------------------------
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (a) conduct, transact or otherwise engage in, or commit to conduct,
transact or otherwise engage in, any business or operations other than (i) those
incidental to its ownership of the Capital Stock of Subsidiaries and those
incidental to Investments by or in Holdings permitted hereunder, (ii) activities
incidental to the maintenance of its existence and compliance with applicable
laws and legal, tax and accounting matters related thereto and activities
relating to its employees, (iii) activities relating to the performance of
obligations under the Loan Documents to which it is a party and (iv) the receipt
and payment of Restricted Payments permitted under Section 11.6, (b) incur,
create, assume or suffer to exist any Indebtedness or other liabilities or
financial obligations, except (i) nonconsensual obligations imposed by operation
of law, (ii) pursuant to the Loan Documents to which it is a party, (iii)
obligations with respect to its Capital Stock, or the Exchangeable Shares, (iv)
obligations to its employees, officers and directors not prohibited hereunder or
(v) obligations under the Transaction Documents as in effect on the date hereof
or (c) own, lease, manage or otherwise operate any properties or assets
(including cash (other than cash received in connection with Restricted Payments
made by a Borrower in accordance with Section 11.6 pending application in the
manner contemplated by said Section) and cash equivalents) other than the
ownership of shares of Capital Stock of the direct Subsidiary owned by it on the
Closing Date or in respect of notes issued to Holdings by management in respect
of the purchase of its Capital Stock or Exchangeable Shares.
11.17 Limitation on Hedge Agreements. Enter into any Hedge Agreement
------------------------------
other than Hedge Agreements entered into in the ordinary course of business, and
not for speculative purposes, to protect against changes in interest rates or
foreign exchange rates.
SECTION 12. GUARANTEE
12.1 Guarantee. (a) The U.S. Borrower hereby unconditionally and
---------
irrevocably guarantees to the Canadian Administrative Agent, for the ratable
benefit of the Canadian Administrative Agent and the Canadian Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Canadian
116
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Canadian Borrower Obligations.
(b) The U.S. Borrower further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of counsel
which may be paid or incurred by the Canadian Administrative Agent, or any
Canadian Lender in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Canadian Borrower
Obligations and/or enforcing any rights with respect to, or collecting against,
the U.S. Borrower under this Section. This Section shall remain in full force
and effect until the Obligations are paid in full and the Commitments are
terminated, notwithstanding that from time to time prior thereto any Borrower
may be free from any Canadian Borrower Obligations.
(c) No payment or payments made by any Borrower or any other Person
or received or collected by the Administrative Agents or any Lender from any
Borrower or any other Person by virtue of any action or proceeding or any set-
off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Canadian Borrower Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of the U.S.
Borrower hereunder which shall, notwithstanding any such payment or payments,
remain liable hereunder for the Canadian Borrower Obligations until the Canadian
Borrower Obligations are paid in full and the Commitments are terminated.
(d) The U.S. Borrower agrees that whenever, at any time, or from time
to time, it shall make any payment to any Administrative Agent or any Lender on
account of its liability hereunder, it will notify such Administrative Agent and
such Lender in writing that such payment is made under this Section for such
purpose.
(e) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the U.S. Borrower hereunder and under
the other Loan Documents in respect of the Canadian Borrower Obligations shall
in no event exceed the amount which can be guaranteed by the U.S. Borrower under
applicable federal and state laws relating to the insolvency of debtors.
12.2 No Subrogation. Notwithstanding any payment or payments made by
--------------
the U.S. Borrower hereunder, or any set-off or application of funds of the U.S.
Borrower by any Administrative Agent or any Lender, the U.S. Borrower shall not
be entitled to be subrogated to any of the rights of any Administrative Agent or
any Lender against the other Borrowers or against any collateral security or
guarantee or right of offset held by any Administrative Agent or any Lender for
the payment of the Canadian Borrower Obligations, nor shall the U.S. Borrower
seek or be entitled to seek any contribution or reimbursement from the other
Borrowers in respect of payments made by the U.S. Borrower hereunder, until all
amounts owing to the Administrative Agents and the Lenders by the other
Borrowers on account of the Canadian Borrower Obligations are paid in full and
the Commitments are terminated. If any amount shall be paid to the U.S.
Borrower on account of such subrogation rights at any time when all of the
Canadian Borrower Obligations shall not have been paid in full, such amount
shall be held by the U.S. Borrower in trust for the Administrative Agents and
the Lenders, segregated from other funds of
117
the U.S. Borrower, and shall, forthwith upon receipt by the U.S. Borrower, be
turned over to the Canadian Administrative Agent in the exact form received by
the U.S. Borrower (duly indorsed by the U.S. Borrower to the Canadian
Administrative Agent, if required), to be applied against the Canadian Borrower
Obligations, whether matured or unmatured, in such order as the Canadian
Administrative Agent may determine.
12.3 Amendments, etc. with respect to the Canadian Borrower
------------------------------------------------------
Obligations; Waiver of Rights. The U.S. Borrower shall remain obligated
-----------------------------
hereunder notwithstanding that, without any reservation of rights against the
U.S. Borrower, and without notice to or further assent by the U.S. Borrower, any
demand for payment of any of the Canadian Borrower Obligations made by any
Administrative Agent or any Lender may be rescinded by such Administrative Agent
or such Lender, and any of the Canadian Borrower Obligations continued, and the
Canadian Borrower Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Administrative Agent or any Lender, and any Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof as the Administrative Agents or the
Lenders (or the Required Lenders, as the case may be) may deem advisable from
time to time, and any collateral security, guarantee or right of offset at any
time held by any Administrative Agent or any Lender for the payment of the
Canadian Borrower Obligations may be sold, exchanged, waived, surrendered or
released. None of any Administrative Agent or any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Canadian Borrower Obligations or for this Agreement or any
property subject thereto. When making any demand hereunder against the U.S.
Borrower, any Administrative Agent or any Lender may, but shall be under no
obligation to, make a similar demand on any other Borrower or any other
guarantor, and any failure by any Administrative Agent or any Lender to make any
such demand or to collect any payments from any such Borrower or any such other
guarantor or any release of such Borrower or such other guarantor shall not
relieve the U.S. Borrower of its obligations or liabilities hereunder, and shall
not impair or affect the rights and remedies, express or implied, or as a matter
of law, of any Administrative Agent or any Lender against the U.S. Borrower.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
12.4 Guarantee Absolute and Unconditional. The U.S. Borrower waives
------------------------------------
any and all notice of the creation, renewal, extension or accrual of any of the
Canadian Borrower Obligations and notice of or proof of reliance by any
Administrative Agent or any Lender upon this Agreement or acceptance of this
Agreement; the Canadian Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Agreement; and all dealings
between the Borrowers and the U.S. Borrower and the Canadian Borrower, on the
one hand, and the Administrative Agents and the Lenders, on the other, shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Agreement. The U.S. Borrower waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or
118
upon the other Borrowers and the U.S. Borrower with respect to the Canadian
Borrower Obligations. This Section 12 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement, any other Loan Document, any of
the Canadian Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Canadian Borrower against any
Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Canadian Borrower or the U.S.
Borrower) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Canadian Borrower for the Canadian Borrower
Obligations, or of the U.S. Borrower under this Section 12, in bankruptcy or in
any other instance. When pursuing its rights and remedies hereunder against the
U.S. Borrower, any Administrative Agent and any Lender may, but shall be under
no obligation to, pursue such rights and remedies as it may have against the
Canadian Borrower or any other Person or against any collateral security or
guarantee for the Canadian Borrower Obligations or any right of offset with
respect thereto, and any failure by any Administrative Agent or any Lender to
pursue such other rights or remedies or to collect any payments from such other
Borrowers or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the other Borrower or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve the U.S. Borrower of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of any Administrative
Agent or any Lender against the U.S. Borrower. This Section 12 shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms upon the U.S. Borrower and its successors and assigns, and shall inure to
the benefit of the Administrative Agents and the Lenders, and their respective
successors, indorsees, transferees and assigns, until all the Canadian Borrower
Obligations and the obligations of the U.S. Borrower under this Agreement shall
have been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of this Agreement the
Borrowers may be free from any Canadian Borrower Obligations.
12.5 Reinstatement. This Section 12 shall continue to be effective,
-------------
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Canadian Borrower Obligations is rescinded or must
otherwise be restored or returned by any Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, any Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
12.6 Payments. The U.S. Borrower hereby agrees that all payments
--------
required to be made by it hereunder will be made to the Canadian Administrative
Agent, for the benefit of the Administrative Agents and the Lenders, as the case
may be, without set-off or counterclaim in accordance with the terms of the
Canadian Borrower Obligations, including, without limitation, in the currency in
which payment is due.
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SECTION 13. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation or Acceptance Reimbursement Obligation when due in
accordance with the terms hereof; or either Borrower shall fail to pay any
interest on any Loan or Reimbursement Obligation or Acceptance
Reimbursement Obligation, or any stamping fee or any other amount payable
hereunder or under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms hereof;
or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made or furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
10.5(a) (with respect to Holdings and each Borrower only), Section 11, or
in Section 5 of the Guarantee and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after the
earlier of (x) the date upon which such Loan party knows or should
reasonably be expected to know the existence of such default or (y) the
date upon which such Loan party receives notice of such default from an
Administrative Agent or Lender; or
(e) Holdings, any Borrower or any of their respective Subsidiaries
shall (i) default in making any payment of any principal of any
Indebtedness (including, without limitation, any Guarantee Obligation, but
excluding the Loans and Reimbursement Obligations and Acceptance
Reimbursement Obligations) on the scheduled or original due date with
respect thereto beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (ii)
default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to
any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated
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maturity or to become subject to or mandatory offer to purchase by the
obligor thereunder or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default, event or
--------
condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such time,
one or more defaults, events or conditions of the type described in clauses
(i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate U.S.$5,000,000; or
(f) (i) Holdings, any Borrower or any of their respective Material
Subsidiaries shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment,winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or Holdings, any
Borrower or any of their respective Material Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Holdings, any Borrower or any of their respective
Material Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, any Borrower or any of their
respective Material Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) Holdings, any Borrower or any of their
respective Material Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, any
Borrower or any of their respective Material Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(g) (i)Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of
Holdings or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v)the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to,
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incur any liability in connection with a withdrawal from, or the Insolvency
or Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could, reasonably be expected to
have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
Holdings, any Borrower or any of their respective Material Subsidiaries
involving for Holdings, the Borrowers and their Subsidiaries taken as a
whole a liability (to the extent not paid or covered by insurance of
U.S.$5,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason (other
than by reason of the express release thereof pursuant to Section 15.15),
to be in full force and effect in all material respects (other than in
accordance with its terms), or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby as to Collateral having an aggregate value in excess
of $2,500,000; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement, or any Canadian Facility Guarantee shall cease, for
any reason (other than by reason of the express release thereof pursuant to
Section 15.15 and other than in accordance with its terms), to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or
(k) (i) Prior to the effectiveness of an initial public offering of
common stock by Holdings, (x) the Permitted Investors shall cease to have
the power to vote or direct the voting of securities having a majority of
the ordinary voting power for the election of directors of Holdings
(determined on a fully diluted basis) or (y) either of the Sponsors and
their respective Control Investment Affiliates shall cease to own
beneficially an amount of common stock of Holdings equal to at least 70% of
the amount of common stock of Holdings owned by such Sponsor and its
Control Investment Affiliates of record and beneficially as of the Closing
Date; (ii) after the effectiveness of an initial public offering of common
stock by Holdings, any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), excluding the Permitted Investors, shall become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of a greater percentage of
the securities having the power to elect directors of Holdings than the
percentage of such securities then owned by the Permitted Investors; (iv)
the board of directors of Holdings shall cease to consist of a majority of
Continuing Directors; or (v) Holdings shall cease to own and control, of
record and beneficially, directly or indirectly through one or more wholly
owned Subsidiaries, 100% of each class of
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outstanding Capital Stock of each Borrower (other than Exchangeable Shares)
free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the U.S. Borrower
or the Canadian Borrower, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement (including, without limitation, all
Reimbursement Obligations and Acceptance Reimbursement Obligations, regardless
of whether or not such Reimbursement Obligations and Acceptance Reimbursement
Obligations are then due and payable) shall immediately become due and payable,
and (B) if such event is any other Event of Default, any of the following
actions may be taken: (i) with the consent of the Required Lenders, the General
Administrative Agent may, or upon the request of the Required Lenders, the
General Administrative Agent shall, by notice to the Borrowers declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; (ii) with the consent of the Required Lenders, the
General Administrative Agent may, or upon the direction of the Required Lenders,
the General Administrative Agent shall, by notice of default to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement (including all amounts payable in respect of
Letters of Credit whether or not the beneficiaries thereof shall have presented
the drafts and other documents required thereunder) and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable
and (iii) the General Administrative Agent may, and upon the direction of the
Required Lenders shall, exercise any and all remedies and other rights provided
pursuant to this Agreement and/or the other Loan Documents.
With respect to all outstanding Reimbursement Obligations which have
not matured at the time of an acceleration pursuant to the second preceding
paragraph, the relevant Borrower shall at such time deposit in a cash collateral
account opened by and maintained by the relevant Administrative Agent an amount
equal to the aggregate amount of all such Reimbursement Obligations. Amounts
held in such cash collateral account shall be applied by an Administrative Agent
to the payment of Reimbursement Obligations when drawings under the related
Letters of Credit are made, and any balance in such account shall be applied to
repay other obligations of the relevant Borrower hereunder. After all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the relevant Borrower.
With respect to all outstanding Acceptance Reimbursement Obligations
in respect of Acceptances which have not matured at the time of an acceleration
pursuant to the second preceding paragraph, the Canadian Borrower shall at such
time deposit in a cash collateral account opened by and maintained by the
Canadian Administrative Agent an amount equal to the aggregate undiscounted face
amount of all such unmatured Acceptances. Amounts held in such cash collateral
account shall be applied by the Canadian Administrative Agent to the payment of
maturing Acceptances, and any balance in such account shall be applied to repay
other obligations of the Canadian Borrower hereunder and under any Notes. After
all Acceptance Reimbursement Obligations shall have been satisfied and all other
obligations of the Canadian Borrower hereunder
123
and under any Notes shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Canadian Borrower.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 14. THE AGENTS; THE ARRANGER
14.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Agents as agents of such Lender under this Agreement and the other
Loan Documents, and each Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agents shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
14.2 Delegation of Duties. Each Agent may execute any of its duties
--------------------
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
14.3 Exculpatory Provisions. Neither any Agent nor any of its
----------------------
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Borrower or
other Person or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by such Agent under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of a Borrower or any other Person to
perform its obligations hereunder or thereunder. No Agent shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document or to inspect the properties, books or
records of the Borrowers.
14.4 Reliance by Agents. Each Agent shall be entitled to rely, and
------------------
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper
124
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrowers or either of them), independent
accountants and other experts selected by such Agent. Each Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment or transfer thereof shall have been filed with such
Agent. Each Agent shall be fully justified as between itself and the Lenders in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
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, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans, the Reimbursement Obligations and the Acceptance
Reimbursement Obligations.
14.5 Notice of Default. No Agent shall be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or a Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the General Administrative
Agent receives such a notice, the General Administrative Agent shall give notice
thereof to the Lenders. The General Administrative Agent shall take such action
reasonably promptly with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
General Administrative Agent shall have received such directions, the General
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
14.6 Non-Reliance on Agents and Other Lender. Each Lender expressly
---------------------------------------
acknowledges that neither any Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by such Agent hereafter
taken, including any review of the affairs of either Borrower, shall be deemed
to constitute any representation or warranty by such Agent to any Lender. Each
Lender represents to each Agent that it has, independently and without reliance
upon such Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrowers and made its own decision to make its
Extensions of Credit hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon either any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrowers. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by an
Agent hereunder, such Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
125
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrowers which may come into the possession of such
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates.
14.7 Indemnification. Each Lender agrees 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 its
Aggregate Exposure Percentage in effect on the date on which indemnification is
sought 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 Loans, the Reimbursement Obligations and the
Acceptance Reimbursement Obligations) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of such Agent. The agreements in this
subsection shall survive the payment of the Loans, the Acceptance Reimbursement
Obligations, the Reimbursement Obligations and all other amounts payable
hereunder.
14.8 Agents in their Individual Capacity. Each Agent and its
-----------------------------------
respective affiliates may make loans to, accept Drafts, accept deposits from and
generally engage in any kind of business with the Borrowers as though such Agent
was not an Agent hereunder and under the other Loan Documents. With respect to
the Loans made or renewed by such Agent, any Acceptances created by such Agent
and any Note or Acceptance Note issued to it, such Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
14.9 Successor Agents. The General Administrative Agent may resign
----------------
as General Administrative Agent, the Canadian Administrative Agent may resign as
Canadian Administrative Agent and the Collateral Monitoring Agent may resign as
the Collateral Monitoring Agent, in each case upon 30 days' notice to the
Lenders and the other Agents. If any Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the U.S. Lenders (in the case of a resignation of the General
Administrative Agent or the Collateral Monitoring Agent) or the Canadian Lenders
(in the case of a resignation of the Canadian Administrative Agent) a successor
agent for the Lenders, whereupon such successor agent shall succeed to the
rights, powers and duties of the resigning Agent, and the terms "General
Administrative Agent", "Canadian Administrative Agent" or "Collateral Monitoring
Agent", as the case may be, shall mean such successor agent effective upon such
appointment and approval, and the former Agent's rights, powers and duties as
such Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement or any holders
of the Loans. After any resigning Agent's resignation, the provisions of this
Section 14 shall inure to its benefit as to any actions taken or
126
omitted to be taken by it while it was an Agent under this Agreement and the
other Loan Documents.
14.10 The Documentation Agent, the Arranger and the Syndication
---------------------------------------------------------
Agents. Each Lender, the Documentation Agent, the Arranger and the Syndication
------
Agent acknowledge that the Documentation Agent, the Arranger and the Syndication
Agent, in such capacities, shall have no duties or responsibilities, and shall
incur no liabilities, under this Agreement or the other Loan Documents in their
respective capacities as such.
14.11 Authorization to Release Liens and Guarantees. Each
---------------------------------------------
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
15.15.
SECTION 15. MISCELLANEOUS
15.1 Amendments and Waivers. Neither this Agreement or any other
----------------------
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 15.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
the General Administrative Agent (with the written consent of the Required
Lenders) and each Loan Party party to the relevant Loan Document may, from time
to time, (a) enter into written amendments, supplements or modifications hereto
and to the other Loan Documents (including amendments and restatements hereof or
thereof) for the purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions
as may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
-------- -------
supplement or modification shall:
(i) forgive the principal amount or extend the final scheduled date
of maturity of any Loan, Reimbursement Obligation or Acceptance
Reimbursement Obligation, extend the scheduled date of any amortization
payment in respect of any Term Loan, reduce the stated rate of any interest
or fee payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any
Commitment of any Lender, in each case without the consent of each Lender
directly affected thereby;
(ii) amend, modify or waive any provision of this Section or reduce
any percentage specified in the definition of Required Lenders or Required
Prepayment Lenders consent to the assignment or transfer by any Borrower of
any of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or release
all or substantially all of the Subsidiary Guarantors from their guarantee
obligations under the Guarantee and Collateral Agreement or all or
substantially all of the guarantors from their obligations under the
Canadian Facility Guarantees, in each case without the consent of all
Lenders, except as otherwise provided in this Agreement or any other Loan
Document;
127
(iii) amend, modify or waive any condition precedent to any extension
of credit under the U.S. Revolving Credit Facility or the Canadian
Revolving Credit Facility set forth in Section 9.2 (including, without
limitation, the waiver of an existing Default or Event of Default required
to be waived in order for such extension of credit to be made), or change
the Advance Rate, without the consent of the Majority Facility Lenders
under the relevant Facility;
(iv) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the written consent
of all Lenders under such Facility; (v) amend, modify or waive any
provision of Section 14 without the consent of any Agent directly affected
thereby;
(vi) amend, modify or waive any provision of Section 2.6 or 2.7
without the written consent of the Swing Line Lender;
(vii) amend, modify or waive any provision of Section 7.9 without the
consent of each Lender directly affected thereby; or
(viii) amend, modify or waive any provision of Section 6 without the
consent of each Issuing Lender directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
--------
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the Agents and
each Loan Party to each relevant Loan Document (x) to add one or more additional
credit facilities to this Agreement and to permit the extensions of credit from
time to time outstanding thereunder and the accrued interest and fees in respect
thereof (collectively, the "Additional Extensions of Credit") to share ratably
-------------------------------
in the benefits of this Agreement and the other Loan Documents with the Loans
and other Extensions of Credit and the accrued interest and fees in respect
thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders, Required Prepayment
Lenders and Majority Facility Lenders; provided, however, that no such amendment
-------- -------
shall permit the Additional Extensions of Credit to share ratably with or with
preference to the Loans in the application of mandatory prepayments without the
consent of the Required Prepayment Lenders.
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15.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of Holdings, the Borrowers and the Agents,
as follows and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the General Administrative Agent or on Schedule I to
the Lender Addendum to which such Lender is a party or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:
Holdings: SMTC Corporation
c/o EMSIcon Investments, LLC
Xxxx Capital, Inc.
Two Xxxxxx Place
Boston, Massachusetts 02116
Attention: Xxxxxxxx Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The U.S. Borrower: HTM Holdings, Inc.
00000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Canadian Borrower: The Surface Mount Technology Centre, Inc.
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: President
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Syndication Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
129
The General Administrative Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Canadian Administrative Agent: The Bank of Nova Scotia
International Banking Division
Loan Administration and Agency
Services
00 Xxxx Xxxxxx Xxxx
14/th/ Floor
Toronto, Ontario
Canada M5H 1H1
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Collateral Monitoring Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Issuing Lender: As notified by such Issuing Lender to
the Administrative Agent and the
Borrower
provided that any notice, request or demand to or upon the any Agent, the
--------
Issuing Lender or any Lender shall not be effective until received.
15.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
15.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or
130
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans and other
extensions of credit hereunder.
15.5 Payment of Expenses. The Borrowers jointly and severally agree
-------------------
(a) to pay or reimburse the Agents for all their reasonable out-of-pocket costs
and expenses incurred in connection with the syndication of the Facilities
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Agents, (b) to pay or
reimburse each Lender and the Agents for all their costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and disbursements of in-house counsel) to each Lender and of
counsel to the Agents, (c) to pay, indemnify, or reimburse each Lender and the
Agents for, and hold each Lender and the Agents harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise (other than excise taxes
imposed in lieu of income taxes) and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify or reimburse each Lender,
each Agent, their respective affiliates, and their respective officers,
directors, trustees, employees, advisors, agents and controlling persons (each,
an "Indemnitee") for, and hold each Indemnitee harmless from and against any and
----------
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of either
Borrower any of its Subsidiaries or any of the Properties and the fees and
disbursements of legal counsel in connection with successful claims, actions or
proceedings by any Indemnitee against either Borrower hereunder (all the
foregoing in this clause (d), collectively, the "Indemnified Liabilities"),
-----------------------
provided, that the Borrowers shall have no obligation hereunder to any
--------
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities (i) are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (ii) arise from disputes among the
Agents, among the Lenders or between the Agents and the Lenders. Without
limiting the foregoing, and to the extent permitted by applicable law, each
Borrower agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries so to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than 30
131
days after written demand therefor. Statements payable by the Borrowers
pursuant to this Section shall be submitted to the Borrowers at the address of
the U.S. Borrower set forth in Section 15.2, or to such other Person or address
as may be hereafter designated by the U.S. Borrower in a written notice to the
General Administrative Agent. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.
15.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
This Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrowers, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that neither Holdings nor any Borrower
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of Holdings or either
Borrower, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
-----------
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrowers and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
15.1. Each of Holdings and each Borrower agrees that if amounts outstanding
under this Agreement and the Loans are due or unpaid after applicable grace
periods, or shall have been declared or shall have become due and payable upon
the occurrence and during the continuation of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
--------
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 5.7(a) as fully as if such Participant
were a Lender hereunder. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 7.11, 7.12 and 7.13 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if such Participant were a Lender if and to the extent the transferor Lender
waives its rights to such amounts; provided that, in the case of Section 7.13,
--------
such Participant shall have complied with the requirements of said Section, and
provided, further, that no Participant shall be entitled to receive any greater
-------- -------
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
132
(c) Any Lender (an "Assignor") may, in accordance with applicable law
--------
and upon written notice to the General Administrative Agent (and the Canadian
Administrative Agent, in the case of assignments with respect to the Canadian
Facilities), at any time and from time to time assign to any Lender or any
affiliate or Control Investment Affiliate thereof or, with the consent of the
relevant Borrower and the Administrative Agents and, in the case of any
assignment of U.S. Revolving Credit Commitments or Canadian Revolving Credit
Commitments, the written consent of each relevant Issuing Lender and Swing Line
Lender (which, in each case, shall not be unreasonably withheld or delayed)
(provided (x) that no such consent need be obtained by any Xxxxxx Entity for a
--------
period of 180 days following the Closing Date and (y) no consent of Borrowers
need be obtained with respect to any assignment of Term Loans), to an additional
bank, financial institution or other entity (an "Assignee") all or any part of
--------
its rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit E, executed by such Assignee
and such Assignor (and, where the consent of a Borrower, the Administrative
Agents or any Issuing Lender or the Swing Line Lender is required pursuant to
the foregoing provisions, by such Borrower and such other Persons) and delivered
to the General Administrative Agent for its acceptance and recording in the
Register; provided that no such assignment to an Assignee (other than any Lender
--------
or any affiliate thereof) shall be in an aggregate principal amount of less than
U.S.$5,000,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement), unless otherwise agreed by the relevant
Borrower and the General Administrative Agent. Any such assignment need not be
ratable as among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with Commitments and/or Loans as set
forth therein, and (y) the Assignor thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor's rights and obligations under this Agreement, such Assignor shall
cease to be a party hereto, except as to Section 7.11, 7.13 and 15.5 in respect
of the period prior to such effective date). Notwithstanding any provision of
this Section, the consent of the Borrowers shall not be required for any
assignment that occurs at any time when any Event of Default shall have occurred
and be continuing. Any assignment of Canadian Facilities after the Syndication
Date must be to an Assignee that is entitled to receive payments in respect of
the Canadian Facilities free and clear of any withholding or similar tax imposed
by Canada or any province thereof.
(d) The General Administrative Agent (together with the Canadian
Administrative Agent, in the case of Canadian Facility Loans) shall, on behalf
of the relevant Borrower, maintain at its address referred to in Section 15.2 a
copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
--------
the Commitments of, and principal amount of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrowers, each Agent and the Lenders shall treat
each Person whose name is recorded in the Register as the owner of the Loans and
any Notes evidencing such Loans recorded therein for all purposes of this
Agreement. Any assignment of any Loan, whether or not evidenced by a Note,
shall be effective only upon appropriate entries with respect thereto being made
in the Register
133
(and each Note shall expressly so provide). Any assignment or transfer of all
or part of a Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Note evidencing
such Loan, accompanied by a duly executed Assignment and Acceptance; thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee, and the old Notes shall be returned by the General
Administrative Agent to the relevant Borrower marked "canceled". The Register
shall be available for inspection by the Borrowers or any Lender (with respect
to any entry relating to such Lender's Loans) at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 15.6(c), by each such other Person) together with payment
to the General Administrative Agent of a registration and processing fee of
$3,500 (except that no such registration and processing fee shall be payable (y)
in connection with an assignment by or to any Xxxxxx Entity or (z) in the case
of an Assignee which is already a Lender or is an affiliate or Control
Investment Affiliate of a Lender or a Person under common management with a
Lender), the General Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders, the Agents and the Borrowers.
On or prior to such effective date, the relevant Borrower, at its own expense,
upon request, shall execute and deliver to the General Administrative Agent (in
exchange for the Note or Notes of the assigning Lender) a new applicable Note
and/or applicable Notes to the order of such Assignee in an amount equal to the
Commitment and/or applicable Loans, as the case may be, assumed or acquired by
it pursuant to such Assignment and Acceptance and, if the Assignor has retained
a Commitment and/or Loans, as the case may be, upon request, a new Note or
Notes, as the case may be, to the order of the Assignor in an amount equal to
the Commitment and/or applicable Loans, as the case may be, retained by it
hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
15.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
-------------------- ----------
Lender") (i) shall at any time prior to any date on which the Commitments are
------
terminated and the Loans, Reimbursement Obligations or Acceptance Reimbursement
Obligations become due and payable pursuant to Section 13 (an "Acceleration")
------------
receive any payment of all or part of its Extensions of Credit made by it to any
Borrower, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Extensions of Credit made by it to
such Borrower, or interest thereon (in each case except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility) or (ii) (except as provided with respect to the Tranche C
Term Loans
134
in Section 15.18) shall at any time after an Acceleration receive any payment of
all or part of the aggregate amount of the Extensions of Credit made by such
benefitted Lender to all Borrowers, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 13(f), or otherwise),
in a greater proportion than any such payment or collateral received by any
other Lender, if any, in respect by the aggregate amount of the Extensions of
Credit made by such Lender to all Borrowers, or interest thereon, then, in each
case described in the foregoing clauses (i) and (ii), such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Extensions of Credit, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders (to the extent required by the foregoing clause (i) or (ii), as
applicable); provided, however, that if all or any portion of such excess
-------- -------
payment or benefits is thereafter recovered from such Benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrowers,
any such notice being expressly waived by the Borrowers to the extent permitted
by applicable law, upon any amount becoming due and payable by a Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) after
any applicable grace period, to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch,
agency or Affiliate thereof to or for the credit or the account of the Borrower.
Each Lender agrees promptly to notify the Borrowers and the Administrative
Agents after any such set-off and application made by such Lender, provided that
--------
the failure to give such notice shall not affect the validity of such set-off
and application.
15.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement and
Lender Addenda signed by all the parties shall be lodged with the Borrower and
the General Administrative Agent.
15.9 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15.10 Integration. This Agreement and the other Loan Documents
-----------
represent the entire agreement of Holdings, the Borrowers, the Agents, the
Arranger and the Lenders with
135
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Arranger, any Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
15.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
-------------
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
15.12 Submission To Jurisdiction; Waivers. Each of Holdings and each
-----------------------------------
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Holdings
or such Borrower, as the case may be at its address set forth in Section
15.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
15.13 Acknowledgments. Each of Holdings and each Borrower hereby
---------------
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has any fiduciary
relationship with or duty to Holdings or any Borrower arising out of or in
connection with this
136
Agreement or any of the other Loan Documents, and the relationship between
the Arranger, the Agents and the Lenders, on one hand, and Holdings and the
Borrowers, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Arranger, the Agents and the Lenders or among Holdings, the Borrowers
and the Lenders.
15.14 Confidentiality. Each of the Agents and the Lenders agrees to
---------------
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent any Agent
--------
or any Lender from disclosing any such information (a) to the Arranger, any
Agent, any other Lender or any affiliate of any thereof, (b) to any Participant
or Assignee (each, a "Transferee") or prospective Transferee that agrees to
------------
comply with the provisions of this Section, (c) to any of its employees,
directors, agents, attorneys, accountants and other professional advisors, (d)
to any financial institution that is a direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section), (e) upon the request or demand of any Governmental Authority having
jurisdiction over it, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (j) in connection with the exercise of any
remedy hereunder or under any other Loan Document.
15.15 Release of Collateral and Guarantee Obligations.
-----------------------------------------------
(a) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, upon request of the relevant Borrower in
connection with any Disposition of Property permitted by the Loan
Documents, the relevant Administrative Agent shall (without notice to, or
vote or consent of, any Lender, or any affiliate of any Lender that is a
party to any Specified Hedge Agreement) take such actions as shall be
required to release its security interest in any Collateral being Disposed
of in such Disposition, and to release any guarantee obligations under any
Loan Document of any Person being Disposed of in such Disposition, to the
extent necessary to permit consummation of such Disposition in accordance
with the Loan Documents.
(b) Notwithstanding anything to the contrary contained herein or any
other Loan Document, when all obligation of the Borrowers secured by the
Security Documents (other than obligations in respect of any Specified
Hedge Agreement) have been paid in full, all Commitments have terminated or
expired and no Extensions of Credit shall be outstanding, upon request of
the relevant Borrower, the relevant Administrative Agent
137
shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement)
take such actions as shall be required to release its security interest in
all Collateral, and to release all guarantee obligations under any Loan
Document, whether or not on the date of such release there may be
outstanding obligations in respect of Specified Hedge Agreements. Any such
release of guarantee obligations shall be deemed subject to the provision
that such guarantee obligations shall be reinstated if after such release
any portion of any payment in respect of the obligations guaranteed thereby
shall be rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
any Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payment had not been made.
15.16 Accounting Changes. In the event that any "Accounting Change"
------------------
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then Holdings and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Holdings' financial condition shall be the same after such Accounting Changes as
if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrowers, the
Administrative Agents and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
15.17 Delivery of Lender Addenda. Each initial Lender shall become a
--------------------------
party to this Agreement by delivering to the General Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrowers and the General
Administrative Agent.
15.18 Intercreditor Provisions. (a) Notwithstanding (i) any
------------------------
provision hereof or of any other Loan Document and (ii) the priority of any Lien
on the Collateral, all proceeds received by the Canadian Administrative Agent
from the Canadian Facility Guarantees or from the exercise by the Canadian
Administrative Agent of any of its remedies under any of the Canadian Security
Documents or the Canadian Facility Guarantees shall be applied by the Canadian
Administrative Agent as follows:
First, to reimburse the Canadian Administrative Agent for all costs
-----
and expenses incurred by them in administering the Collateral, the Canadian
Facility Guarantees and the Canadian Security Documents and in enforcing
rights thereunder;
Second, to the Canadian Lenders to pay principal of, accrued and
------
unpaid interest on, and other amounts payable hereunder with respect to all
indebtedness, obligations and
138
liabilities of the Canadian Borrower under the Loan Documents (including,
without limitation, the obligations of the Canadian Borrower to cash
collateralize Canadian L/C Obligations and Acceptance Reimbursement
Obligations), ratably among the Canadian Lenders according to the amounts
of such indebtedness, liabilities and obligations owing to the Canadian
Lenders; and
Third, after payment in full of all of the amounts described in the
-----
foregoing clauses First and Second of this paragraph (a), to the Canadian
Borrower or the other Loan Parties entitled thereto or as otherwise may be
required under applicable law.
(b) Notwithstanding (i) any provision hereof or of any other Loan
Document and (ii) the priority of any Lien on the Collateral, all proceeds
received by the General Administrative Agent from the guarantees contained in
the Guarantee and Collateral Agreement or from the exercise by the General
Administrative Agent of any of its remedies under any of the Security Documents
or the guarantees contained in the Guarantee and Collateral Agreement shall be
applied by the General Administrative Agent as follows:
First, to reimburse the General Administrative Agent for all costs and
-----
expenses incurred by them in administering the Collateral and the Security
Documents and in enforcing rights thereunder;
Second, to the Lenders to pay principal of, accrued and unpaid
------
interest on, and other amounts payable hereunder with respect to all
indebtedness, obligations and liabilities of the U.S. Borrower under the
Loan Documents (including, without limitation, the guarantee obligations of
the U.S. Borrower pursuant to Section 12 and the obligations of the U.S.
Borrower to cash collateralize U.S. L/C Obligations, but excluding any
indebtedness, obligations and liabilities of any Loan Party with respect
to the Tranche C Term Loans) (all such non-excluded indebtedness,
obligations and liabilities, collectively, the "First Priority
--------------
Obligations"), ratably among the Lenders according to the amounts of First
-----------
Priority Obligations owing to the Lenders;
Third, after payment in full of the First Priority Obligations, to the
-----
Tranche C Term Loan Lenders to pay the principal of, accrued and unpaid
interest on, and other amounts payable hereunder with respect to, the
Tranche C Term Loans; and
Fourth, after payment in full of all of the amounts described in the
------
foregoing clauses First, Second and Third of this paragraph (b), to the
U.S. Borrower or the other Loan Parties entitled thereto or as otherwise
may be required under applicable law.
(c) The General Administrative Agent, and the Canadian Administrative
Agent under the direction of the General Administrative Agent, shall coordinate
their exercise of remedies and the application of the proceeds thereof with the
intent of causing the repayment of the largest possible amount of the
indebtedness, obligations and liabilities of the Canadian Borrower under the
Loan Documents before application toward such repayment of proceeds from (i) the
guarantee of the U.S. Borrower under Section 12, (ii) the guarantee contained in
the
139
Guarantee and Collateral Agreement or (iii) any Security Document (other than
the Canadian Security Documents).
(d) Notwithstanding any provision hereof or of any other Loan
Document, without the consent of a majority in outstanding principal amount of
the Tranche C Term Loan Lenders, neither Holdings nor any of its Subsidiaries
will create, incur, assume or suffer to exist any Indebtedness that ranks senior
or pari passu in right of payment or with respect to Collateral to the Tranche C
Term Loans (either directly or indirectly, including without limitation through
intercreditor arrangements or otherwise) other than Indebtedness which ranks
pari passu in right of payment or with respect to collateral with the First
Priority Obligations.
15.19 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWERS, THE AGENTS AND
---------------------
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
SMTC CORPORATION
By: /s/ Xxxx Xxxxxx
____________________________________
Name:
Title:
HTM HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
____________________________________
Name:
Title: President
THE SURFACE MOUNT TECHNOLOGY
CENTRE, INC.
By: /s/ Xxxx Xxxxxx
____________________________________
Name:
Title:
XXXXXX BROTHERS INC.,
as Arranger
By: /s/ Xxxxxxx X. Xxxxxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
XXXXXX COMMERCIAL PAPER INC., as
General Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
THE BANK OF NOVA SCOTIA, as Syndication
Agent and Canadian Administrative Agent
By: /s/ X. Xxx Xxxxxxxx
____________________________________
Name: X. Xxx Xxxxxxxx
Title: Senior Relationship Manager
GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent
By: /s/ Xxxx Xxxxxxx
____________________________________
Name: Xxxx Xxxxxxx
Title: Duly Authorized
XXXXXX COMMERCIAL PAPER INC., as
Collateral Monitoring Agent
By: /s/ Xxxxxxx X. Xxxxxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
HI-TECH MANUFACTURING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
____________________________________
Title:
Annex A
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PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS,
TRANCHE A TERM LOANS, CANADIAN REVOLVING CREDIT LOANS,
AND CANADIAN TERM LOANS AND COMMITMENT FEES
PRICING GRID
Tranche A Term Loans, U.S. Revolving Credit Loans,
Canadian Revolving Credit Loans,
and Canadian Term Loans
Applicable Applicable
Consolidated Applicable Applicable Margin- Margin-
Total Margin- Margin- Canadian Canadian
Leverage Eurodollar Commitment U.S. Base Prime Rate Base Rate
Ratio Loans Fee Rate Loans Loans Loans
----------------------------- ------------ ------------- ------------- -------------- ------------
(greater than/equal to) 4.00x 3.00% .50% 1.25% 1.25 1.25
(greater than/equal to) 3.75x 2.75% .50% 1.00% 1.00 1.00
(greater than/equal to) 3.25x 2.50% .50% .75% .75 .75
(less than) 3.25x 2.25% .375% .50% .50 .50
Tranche B Term Loans
Applicable
Consolidated Margin-
Total Leverage Applicable Margin- U.S. Base
Ratio Eurodollar Loans Rate Loans
--------------------------------- ------------------- -----------
(greater than or equal to) 4.00x 3.50% 1.75%
(greater than or equal to) 3.75x 3.25% 1.50%
(greater than or equal to) 3.25x 3.25% 1.50%
(less than) 3.25x 3.00% 1.25%
Changes in the Applicable Margin or in the Commitment Fee Rate resulting from
changes in the Consolidated Total Leverage Ratio shall become effective on the
date (the "Adjustment Date") on which financial statements are delivered to the
-----------------
Lenders pursuant to Section 10.1 (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Total Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 4.00 to 1.
