EXHIBIT 10.1
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CREDIT AGREEMENT
dated as of June 30, 2004
among
DYNAMIC DETAILS CANADA, CORP., and
DDI CANADA ACQUISITION CORP.,
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GE CANADA FINANCE HOLDING COMPANY,
as Agent and Lender
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CREDIT AGREEMENT
TABLE OF CONTENTS
Page
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1. A MOUNT AND TERMS OF CREDIT......................................................................... 2
1.1 Credit Facilities............................................................................. 2
1.2 Letters of Credit............................................................................. 5
1.3 Prepayments................................................................................... 5
1.4 Use of Proceeds............................................................................... 7
1.5 Interest...................................................................................... 7
1.6 Eligible Accounts............................................................................. 10
1.7 [INTENTIONALLY OMITTED]....................................................................... 12
1.8 Cash Management System........................................................................ 12
1.9 Fees.......................................................................................... 12
1.10 Receipt of Payments........................................................................... 12
1.11 Application and Allocation of Payments........................................................ 13
1.12 Loan Account and Accounting................................................................... 14
1.13 Indemnity..................................................................................... 14
1.14 Access........................................................................................ 15
1.15 Taxes......................................................................................... 16
1.16 Capital Adequacy; Increased Costs; Illegality................................................. 17
1.17 Single Loan................................................................................... 18
2. CONDITIONS PRECEDENT................................................................................ 18
2.1 Conditions to the Initial Loans............................................................... 18
2.2 Further Conditions to Each Loan............................................................... 19
3. REPRESENTATIONS AND WARRANTIES...................................................................... 20
3.1 Corporate Existence; Compliance with Law...................................................... 20
3.2 Executive Offices and Collateral Locations.................................................... 20
3.3 Corporate Power, Authorization, Enforceable Obligations....................................... 21
3.4 Financial Statements and Projections.......................................................... 21
3.5 Material Adverse Effect....................................................................... 22
3.6 Ownership of Property; Liens.................................................................. 22
3.7 Labor Matters................................................................................. 23
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness..................... 23
3.9 Government Regulation......................................................................... 23
3.10 Margin Regulations............................................................................ 24
3.11 Taxes......................................................................................... 24
3.12 ERISA; Canadian Pension and Benefit Plans..................................................... 24
3.13 No Litigation................................................................................. 25
3.14 Brokers....................................................................................... 26
3.15 Intellectual Property......................................................................... 26
3.16 Full Disclosure............................................................................... 26
3.17 Environmental Matters......................................................................... 27
3.18 Insurance..................................................................................... 27
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CREDIT AGREEMENT
3.19 Deposit and Disbursement Accounts............................................................. 27
3.20 Government Contracts.......................................................................... 28
3.21 Customer and Trade Relations.................................................................. 28
3.22 Bonding; Licenses............................................................................. 28
3.23 Solvency...................................................................................... 28
4. FINANCIAL STATEMENTS AND INFORMATION................................................................ 28
4.1 Reports and Notices........................................................................... 28
4.2 Communication with Accountants................................................................ 28
5. AFFIRMATIVE COVENANTS............................................................................... 29
5.1 Maintenance of Existence and Conduct of Business.............................................. 29
5.2 Payment of Charges............................................................................ 29
5.3 Books and Records............................................................................. 30
5.4 Insurance; Damage to or Destruction of Collateral............................................. 30
5.5 Compliance with Laws.......................................................................... 31
5.6 Supplemental Disclosure....................................................................... 31
5.7 Intellectual Property......................................................................... 31
5.8 Environmental Matters......................................................................... 32
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases......... 32
5.10 Further Assurances............................................................................ 33
5.11 Canadian Pension and Benefit Plans............................................................ 33
5.12 Foreign Subsidiaries' Guaranties.............................................................. 33
6. NEGATIVE COVENANTS.................................................................................. 34
6.1 Mergers, Subsidiaries, Etc.................................................................... 34
6.2 Investments; Loans and Advances............................................................... 37
6.3 Indebtedness.................................................................................. 37
6.4 Employee Loans and Affiliate Transactions..................................................... 39
6.5 Capital Structure and Business................................................................ 40
6.6 Guaranteed Indebtedness....................................................................... 40
6.7 Liens......................................................................................... 40
6.8 Sale of Stock and Assets...................................................................... 40
6.9 ERISA......................................................................................... 41
6.10 Financial Covenants........................................................................... 41
6.11 Hazardous Materials........................................................................... 41
6.12 Sale-Leasebacks............................................................................... 41
6.13 Restricted Payments........................................................................... 41
6.14 Change of Corporate Name; State of Organization, Location or Fiscal Year...................... 43
6.15 No Impairment of Intercompany Transfers....................................................... 44
6.16 Restrictions Affecting Senior Accreting Notes................................................. 44
6.17 Use of Proceeds from Parent Stock Issuance.................................................... 44
7. TERM................................................................................................ 44
7.1 Termination................................................................................... 44
7.2 Survival of Obligations Upon Termination of Financing Arrangements............................ 45
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8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.............................................................. 45
8.1 Events of Default............................................................................. 45
8.2 Remedies...................................................................................... 47
8.3 Waivers by Credit Parties..................................................................... 47
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT................................................. 48
9.1 Assignment and Participations................................................................. 48
9.2 Appointment of Agent.......................................................................... 50
9.3 Agent's Reliance, Etc......................................................................... 50
9.4 GE Capital Canada and Affiliates.............................................................. 51
9.5 Lender Credit Decision........................................................................ 51
9.6 Indemnification............................................................................... 51
9.7 Successor Agent............................................................................... 52
9.8 Setoff and Sharing of Payments................................................................ 52
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert...................... 53
10. SUCCESSORS AND ASSIGNS.............................................................................. 55
11. MISCELLANEOUS....................................................................................... 56
11.1 Complete Agreement; Modification of Agreement................................................. 56
11.2 Amendments and Waivers........................................................................ 56
11.3 Fees and Expenses............................................................................. 58
11.4 No Waiver..................................................................................... 59
11.5 Remedies...................................................................................... 59
11.6 Severability.................................................................................. 60
11.7 Conflict of Terms............................................................................. 60
11.8 Confidentiality............................................................................... 60
11.9 GOVERNING LAW................................................................................. 60
11.10 Notices....................................................................................... 61
11.11 Section Titles................................................................................ 61
11.12 Counterparts.................................................................................. 62
11.13 WAIVER OF JURY TRIAL.......................................................................... 62
11.14 Press Releases and Related Matters............................................................ 62
11.15 Reinstatement................................................................................. 62
11.16 Advice of Counsel............................................................................. 63
11.17 Dollar References............................................................................. 63
11.18 Judgment Currency............................................................................. 63
11.19 Time of Day................................................................................... 63
11.20 No Strict Construction........................................................................ 64
12. CROSS-GUARANTY...................................................................................... 64
12.1 Cross-Guaranty................................................................................ 64
12.2 Waivers by Borrowers.......................................................................... 64
12.3 Benefit of Guaranty........................................................................... 65
12.4 Waiver of Subrogation, Etc.................................................................... 65
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12.5 Election of Remedies.......................................................................... 65
12.6 [INTENTIONALLY OMITTED]....................................................................... 65
12.7 Contribution with Respect to Guaranty Obligations............................................. 65
12.8 Liability Cumulative.......................................................................... 66
13. LIENS AND LOAN PRIORITIES........................................................................... 66
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CREDIT AGREEMENT
INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Schedule of Documents
Annex E (Section 4.1(a)) - Financial Statements and Projections - Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A-
Commitments definition) - Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Master Agreement for Standby Letters of Credit
Exhibit B-2 - Master Agreement for Documentary Letters of Credit
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.14 - Brokers
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Bonds; Patent, Trademark Licenses
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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CREDIT AGREEMENT
CREDIT AGREEMENT ("Agreement") dated as of June 30, 2004, among DYNAMIC
DETAILS, INCORPORATED, a California corporation ("Details"); DYNAMIC DETAILS
CANADA, CORP., a Nova Scotia unlimited liability company ("Canada"), and DDI
CANADA ACQUISITION CORP., an Ontario Corporation ("DDi Canada") (Canada and DDi
Canada are collectively referred to as "Borrowers" and each individually as a
"Borrower"); the other Credit Parties signatory hereto; GE CANADA FINANCE
HOLDING COMPANY, a Nova Scotia unlimited liability company (in its individual
capacity, "GE Capital Canada"), for itself, as Lender, and as Agent for Lenders;
and the other Lenders signatory hereto from time to time.
RECITALS
A. Credit Parties have requested that Lenders provide a revolving
credit facility to Borrowers to provide (a) working capital financing for
Borrowers, (b) funds for other general corporate purposes of Borrowers and (c)
funds for other purposes permitted hereunder; and for these purposes, Lenders
are willing to make certain loans and other extensions of credit to Borrowers of
up to such amount upon the terms and conditions set forth herein.
B. Credit Parties have agreed to secure all of their respective
obligations under the Loan Documents by granting to Agent, for the benefit of
Agent and Lenders, a security interest in and lien upon all of their existing
and after-acquired personal and real property.
C. Borrowers' and Credit Parties' business is a mutual and
collective enterprise and Borrowers believe that the consolidation of all loans
and other financial accommodations under this Agreement and the US Credit
Agreement will enhance the aggregate borrowing powers of Borrowers and credit
availability to the other Credit Parties and facilitate their loan relationship
with Agent, US Agent, Lenders and US Lenders, all to the mutual advantage of the
Borrowers and the other Credit Parties. US Borrowers will guarantee and provide
security for the obligations of Borrowers under this Agreement, however, subject
to the provisions hereof, it is intent of the parties that Borrowers neither
guarantee nor provide security for the obligations of US Borrowers under the US
Credit Agreement.
D. Each Borrower acknowledges that it will receive substantial
direct and indirect benefits by reason of the making of loans and other
financial accommodations to the other Credit Parties by virtue of Credit
Parties' various inter-relationships.
E. Agent's and Lenders' willingness to extend financial
accommodations to Borrowers, and to administer each Borrower's collateral
security therefor, on a combined basis as more fully set forth in this
Agreement, is done solely as an accommodation to Borrowers and at Borrowers'
request and in furtherance of Borrowers' mutual and collective enterprise.
F. Capitalized terms used in this Agreement shall have the
meanings ascribed to them in ANNEX A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in ANNEX A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
AGREEMENT
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CREDIT AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof,
each Revolving Lender agrees to make available to Borrowers from time to time
until the Commitment Termination Date its Pro Rata Share of advances (each, a
"Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. Until the Commitment Termination Date, Borrowers may borrow,
repay and reborrow under this SECTION 1.1(a); provided, that the amount of any
Revolving Credit Advance to be made at any time shall not exceed Borrowing
Availability at such time. Borrowing Availability may be reduced by Reserves
imposed by Agent in its reasonable credit judgment. Each Revolving Credit
Advance shall be made on notice by Borrower Representative on behalf of the
applicable Borrower to one of the representatives of Agent identified in
SCHEDULE 1.1 at the address specified therein. Any such notice must be given no
later than (1) 1:00 p.m. (Toronto time) on the Business Day of the proposed
Revolving Credit Advance, in the case of an Index Rate Loan, or (2) 1:00 p.m.
(Toronto time) on the date which is two Business Days prior to the proposed
Revolving Credit Advance, in the case of a LIBOR Loan. Each such notice (a
"Notice of Revolving Credit Advance") must be given in writing (by telecopy or
overnight courier) substantially in the form of EXHIBIT 1.1(a)(i), and shall
include the information required in such Exhibit and such other information as
may be required by Agent, including whether such Revolving Credit Advance is to
be denominated in US Dollars or the Equivalent Amount in Canadian Dollars. If
Borrower desires to have the Revolving Credit Advances bear interest by
reference to a LIBOR Rate, Borrower Representative must comply with SECTION
1.5(e).
(ii) Except as provided in SECTION 1.12, each
Borrower shall execute and deliver to each Revolving Lender a note to evidence
the Revolving Loan Commitment of that Revolving Lender. Each note shall be in
the principal amount of the Revolving Loan Commitment of the applicable
Revolving Lender, dated the Closing Date and substantially in the form of
EXHIBIT 1.1(a)(ii) (each a "Revolving Note" and, collectively, the "Revolving
Notes"). Each Revolving Note shall represent the joint and several obligations
of Borrowers to pay the amount of the applicable Revolving Lender's Revolving
Loan Commitment or, if less, such Revolving Lender's Pro Rata Share of the
aggregate unpaid principal amount of all Revolving Credit Advances to Borrowers
together with interest thereon as prescribed in SECTION 1.5. The entire unpaid
balance of the Revolving Loan and all other non-contingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date.
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CREDIT AGREEMENT
(b) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender
upon Agent's receipt of any Notice of Revolving Credit Advance. Subject to the
terms and conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Swing Line Advance") in accordance with any such notice. The
provisions of this SECTION 1.1(b) shall not relieve Revolving Lenders of their
obligations to make Revolving Credit Advances under SECTION 1.1(a); provided,
that if the Swing Line Lender makes a Swing Line Advance pursuant to any such
notice, such Swing Line Advance shall be in lieu of any Revolving Credit Advance
that otherwise may be made by Revolving Credit Lenders pursuant to such notice.
The aggregate amount of Swing Line Advances outstanding shall not exceed at any
time the lesser of (A) the Swing Line Commitment and (B) the lesser of the
Maximum Amount and the Aggregate Borrowing Base, in each case, less the
outstanding balance of the Revolving Loan at such time ("Swing Line
Availability"). Until the Commitment Termination Date, Borrowers may from time
to time borrow, repay and reborrow under this SECTION 1.1(b). Each Swing Line
Advance shall be made pursuant to a Notice of Revolving Credit Advance delivered
to Agent by Borrower Representative on behalf of the applicable Borrower in
accordance with SECTION 1.1(a). Any such notice must be given no later than 1:00
p.m. (Toronto time) on the Business Day of the proposed Swing Line Advance.
Unless the Swing Line Lender has received at least one Business Day's prior
written notice from Requisite Revolving Lenders instructing it not to make a
Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure of
any condition precedent set forth in SECTIONS 2.2, be entitled to fund that
Swing Line Advance, and to have each Revolving Lender make Revolving Credit
Advances in accordance with SECTION 1.1(b)(iii) or purchase participating
interests in accordance with SECTION 1.1(b)(iv). Notwithstanding any other
provision of this Agreement or the other Loan Documents, the Swing Line Loan
shall constitute an Index Rate Loan. Borrowers shall repay the aggregate
outstanding principal amount of the Swing Line Loan upon demand therefor by
Agent.
(ii) Borrowers shall execute and deliver to the
Swing Line Lender a promissory note to evidence the Swing Line Commitment, which
note shall be in the principal amount of the Swing Line Commitment of the Swing
Line Lender, dated the Closing Date and substantially in the form of EXHIBIT
1.1(b)(ii) (each a "Swing Line Note," and collectively the "Swing Line Notes").
The Swing Line Note shall represent the joint and several obligations of
Borrowers to pay the amount of the Swing Line Commitment or, if less, the
aggregate unpaid principal amount of all Swing Line Advances made to Borrowers
together with interest thereon as prescribed in SECTION 1.5. The entire unpaid
balance of the Swing Line Loan and all other noncontingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from
time to time no less frequently than once weekly, shall on behalf of any
Borrower (and each Borrower hereby irrevocably authorizes the Swing Line Lender
to so act on its behalf) request each Revolving Lender (including the Swing Line
Lender) to make a Revolving Credit Advance to each Borrower (which shall be an
Index Rate Loan) in an amount equal to that Revolving Lender's Pro Rata Share of
the principal amount of the applicable Borrower's Swing Line Loan (the "Refunded
Swing Line Loan") outstanding on the date such notice is given. Unless any of
the
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CREDIT AGREEMENT
events described in SECTIONS 8.1(h) or 8.1(i) has occurred (in which event the
procedures of SECTION 1.1(b)(iv) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Revolving Lender shall disburse directly
to Agent, its Pro Rata Share of a Revolving Credit Advance on behalf of the
Swing Line Lender, prior to 3:00 p.m. (Toronto time), in immediately available
funds on the Business Day next succeeding the date that notice is given. The
proceeds of those Revolving Credit Advances shall be immediately paid to the
Swing Line Lender and applied to repay the Refunded Swing Line Loan of the
applicable Borrower.
(iv) If, prior to refunding a Swing Line Loan
with a Revolving Credit Advance pursuant to SECTION 1.1(b)(iii), one of the
events described in SECTIONS 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of SECTION 1.1(b)(v), each Revolving Lender shall, on the date such
Revolving Credit Advance was to have been made for the benefit of the applicable
Borrower, purchase from the Swing Line Lender an undivided participation
interest in the Swing Line Loan to such Borrower in an amount equal to its Pro
Rata Share of such Swing Line Loan. Upon request, each Revolving Lender shall
promptly transfer to the Swing Line Lender, in immediately available funds, the
amount of its participation interest.
(v) Each Revolving Lender's obligation to make
Revolving Credit Advances in accordance with SECTION 1.1(b)(iii) and to purchase
participation interests in accordance with SECTION 1.1(b)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, any Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of any Default or
Event of Default; (C) any inability of Borrower to satisfy the conditions
precedent to borrowing set forth in this Agreement at any time or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If any Revolving Lender does not make available to Agent or the
Swing Line Lender, as applicable, the amount required pursuant to SECTIONS
1.1(b)(iii) or 1.1(b)(iv), as the case may be, the Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving Lender, together
with interest thereon for each day from the date of non-payment until such
amount is paid in full at the Federal Funds Rate for the first two Business Days
and at the Index Rate thereafter.
(c) Reliance on Notices; Appointment of Borrower
Representative. Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Credit Advance, Notice of
Conversion/Continuation or similar notice believed by Agent to be genuine. Agent
may assume that each Person executing and delivering any notice in accordance
herewith was duly authorized, unless the responsible individual acting thereon
for Agent has actual knowledge to the contrary. Each Borrower hereby designates
Borrower Representative as its representative and agent on its behalf for the
purposes of issuing Notices of Revolving Credit Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, requesting Letters
of Credit, giving and receiving all other notices and consents hereunder or
under any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Loan Documents. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower
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CREDIT AGREEMENT
Representative as a notice or communication from all Borrowers, and may give any
notice or communication required or permitted to be given to any Borrower or
Borrowers hereunder to Borrower Representative on behalf of such Borrower or
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
1.2 Letters of Credit. Subject to and in accordance with the terms
and conditions contained herein and in ANNEX B, Borrower Representative, on
behalf of the applicable Borrower, shall have the right to request, and
Revolving Lenders agree to incur, or purchase participations in, Letter of
Credit Obligations in respect of each Borrower.
1.3 Prepayments.
(a) Voluntary Prepayments. Borrowers may at any time on
at least five days' prior written notice by Borrower Representative to Agent
permanently reduce (but not terminate) the Revolving Loan Commitment; provided,
that (i) any such reductions shall be in a minimum amount of US$5,000,000 (or
the Equivalent Amount in Canadian Dollars) and integral multiples of US$250,000
(or the Equivalent Amount in Canadian Dollars) in excess of such amount, (ii)
the Revolving Loan Commitment shall not be reduced to an amount less than the
amount of the Revolving Loan then outstanding, and (iii) after giving effect to
such reductions, Borrowers shall comply with SECTION 1.3(b)(i). In addition,
Borrowers may at any time on at least ten days' prior written notice by Borrower
Representative to Agent terminate the Revolving Loan Commitment; provided, that
upon such termination, all Loans and other Obligations shall be immediately due
and payable in full and all Letter of Credit Obligations shall be cash
collateralized or otherwise satisfied in accordance with ANNEX B. Any such
voluntary reduction or termination of the Revolving Loan Commitment must be
accompanied by the payment of any LIBOR funding breakage costs in accordance
with SECTION 1.13(b). Upon any such reduction or termination of the Revolving
Loan Commitment, each Borrower's right to request Revolving Credit Advances, or
request that Letter of Credit Obligations be incurred on its behalf, or request
Swing Line Advances, shall simultaneously be permanently reduced or terminated,
as the case may be; provided, that a permanent reduction of the Revolving Loan
Commitment shall require a corresponding pro rata reduction in the L/C Sublimit.
(b) Mandatory Prepayments.
(i) If at any time the outstanding balances of
the Revolving Loan and the Swing Line Loan exceed the lesser of (A) the Maximum
Amount and (B) the Aggregate Borrowing Base (including as a result in the
fluctuation of currency values), then Borrowers and US Borrowers shall
immediately repay the aggregate outstanding Revolving Credit Advances to the
extent required to eliminate such excess. If any such excess remains after
repayment in full of the aggregate outstanding Revolving Credit Advances,
Borrowers shall provide cash collateral for the Letter of Credit Obligations in
the manner set forth in ANNEX B to the extent required to eliminate such excess.
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CREDIT AGREEMENT
(ii) Within five Business Days of receipt (or at
all times following the occurrence of a Dominion Activation Event, immediately
upon receipt) by any Borrower or any other Subsidiary of any Credit Party
organized under a Canadian jurisdiction, if any, of any cash proceeds of any
asset disposition (including as a result of permitted sale/leaseback
transactions under SECTION 6.12), Borrowers shall prepay the Loans in an amount
equal to all such proceeds, net of (A) commissions and other reasonable and
customary transaction costs, fees and expenses properly attributable to such
transaction and payable by Borrowers in connection therewith (in each case, paid
to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens on such asset (to the extent such Liens constitute Permitted Encumbrances
hereunder), if any, and (D) an appropriate reserve for income taxes in
accordance with GAAP in connection therewith. Any such prepayment shall be
applied in accordance with SECTION 1.3(c).
(iii) If any Borrower or any other Subsidiary of
any Credit Party organized under a Canadian jurisdiction, if any, issues Stock,
no later than the Business Day following the date of receipt of the proceeds
thereof, Borrowers shall prepay the Loans (and cash collateralize Letter of
Credit Obligations) in an amount equal to all such proceeds, net of underwriting
discounts and commissions and other reasonable costs paid to non-Affiliates in
connection therewith. Any such prepayment shall be applied in accordance with
SECTION 1.3(c).
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by any Borrower pursuant to SECTIONS 1.3(b)(ii) or (b)(iii)
shall be applied as follows: first, to Fees and reimbursable expenses of Agent
then due and payable pursuant to any of the Loan Documents ; second, to interest
then due and payable on that Borrower's Swing Line Loan; third, to the principal
balance of that Borrower's Swing Line Loan until the same has been repaid in
full; fourth, to interest then due and payable on the Revolving Credit Advances
to that Borrower; fifth, to the outstanding principal balance of Revolving
Credit Advances made to that Borrower until the same has been paid in full;
sixth, to any Letter of Credit Obligations of that Borrower, to provide cash
collateral therefor in the manner set forth in ANNEX B, until all such Letter of
Credit Obligations have been fully cash collateralized in the manner set forth
in ANNEX B; seventh, to interest then due and payable on the Swing Line Loan of
each other Borrower, pro rata; eighth, to the principal balances of the Swing
Line Loan outstanding to each other Borrower, pro rata, until the same have been
repaid in full; ninth, to interest then due and payable on the Revolving Credit
Advances outstanding to each other Borrower, pro rata; tenth, to the principal
balance of the Revolving Credit Advances made to each other Borrower, pro rata,
until the same has been paid in full; eleventh, to any Letter of Credit
Obligations of each other Borrower, pro rata, to provide cash collateral
therefore in the manner set forth in ANNEX B, until all such Letter of Credit
Obligations have been fully cash collateralized; and lastly, subject to the
provisions of SECTION 1.3(f), and unless such application would have adverse tax
consequence for the US Borrowers under IRC Section 956 or would violate
applicable Canadian law, to the US Obligations of the same type and order as set
forth in the preceding CLAUSES "FIRST" through `SIXTH" of the US Borrowers.
Neither the Revolving Loan Commitment nor the Swing Line Commitment shall be
permanently reduced by the amount of any such prepayments listed in SECTION 1.3.
(d) Application of Prepayments from Insurance and
Condemnation Proceeds. Prepayments from insurance or condemnation proceeds in
accordance with SECTION 5.4(c) shall be applied first, to the Swing Line Loans,
and second, to the Revolving Credit Advances.
6
CREDIT AGREEMENT
Neither the Revolving Loan Commitment nor the Swing Line Loan Commitment shall
be permanently reduced by the amount of any such prepayments.
(e) No Implied Consent. Nothing in this SECTION 1.3 shall
be construed to constitute Agent's or any Lender's consent to any transaction
that is not permitted by other provisions of this Agreement or the other Loan
Documents.
(f) Allocation among Borrowers and US Borrowers. It is
understood and agreed by the parties that under no circumstances shall any
prepayment by Borrowers (or any Collateral provided by Borrowers or the proceeds
thereof) be applied to the US Obligations unless, not later than 45 Business
Days prior to any proposed application of any prepayment by Borrowers (or any
such Collateral or proceeds) to the US Obligations, Agent notifies Borrower
Representative in writing of its intention to make such application and, if
Borrower Representative believes that such application would violate Canadian
law or would have a Negative Effect, the procedures set forth in SECTION 5.12
with respect to obtaining a tax opinion shall be followed, and no such
application shall be made if such an opinion is delivered stating that such
application will result in a Negative Effect or violate Canadian law. The amount
of any prepayment shall, in the exercise of Agent's reasonable discretion, be
allocated among individual Borrowers, in each case as appropriate in order to
reflect approximately the ownership of the asset as to which such prepayment is
made.
1.4 Use of Proceeds. Borrowers shall utilize the proceeds of the
Loans solely for the financing of Borrowers' ordinary working capital, general
corporate needs and such other purposes permitted hereunder.
1.5 Interest.
(a) Borrowers shall pay interest to Agent, for the
ratable benefit of Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date, at the
following rates: (i) with respect to the Revolving Credit Advances, the Index
Rate plus the Applicable Revolver Index Margin per annum or, at the election of
Borrower Representative, the applicable LIBOR Rate plus the Applicable Revolver
LIBOR Margin per annum; and (ii) with respect to the Swing Line Loan, the Index
Rate plus the Applicable Revolver Index Margin per annum.
As of the Closing Date, the Applicable Margins are as follows:
Applicable Revolver Index Margin 3.00%
Applicable Revolver LIBOR Margin 4.00%
Applicable L/C Margin 4.00%
The Applicable Margins may be adjusted by reference to the following
grids:
7
CREDIT AGREEMENT
IF AS OF THE END OF ANY FISCAL
MONTH EBITDA OF DETAILS AND APPLICABLE APPLICABLE
ITS SUBSIDIARIES FOR THE LAST 12 REVOLVER INDEX REVOLVER LIBOR APPLICABLE L/C
FISCAL MONTHS IS: MARGIN IS: MARGIN IS: MARGIN IS:
-----------------------------------------------------------------------------------
< US$35,000,000 3.00% 4.00% 4.00%
-----------------------------------------------------------------------------------
> or = US$35,000,000 but 2.75% 3.75% 3.75%
< US$40,000,000
-----------------------------------------------------------------------------------
> or = US$40,000,000 but 2.50% 3.50% 3.50%
< US$45,000,000
-----------------------------------------------------------------------------------
> or = US$45,000,000 but 2.25% 3.25% 3.25%
< US$50,000,000
-----------------------------------------------------------------------------------
> US$50,000,000 2.00% 3.00% 3.00%
-----------------------------------------------------------------------------------
Adjustments in the Applicable Margins will commence with the Fiscal
Quarter ending March 31, 2005, and thereafter will be implemented quarterly on a
prospective basis, for each calendar month, at least five days after the date of
delivery to Agent of the quarterly unaudited Financial Statements evidencing the
need for an adjustment; provided, that no such adjustments will take effect
until the date Agent receives Details' annual audited Financial Statements for
the Fiscal Year ending December 31, 2004. Concurrently with the delivery of the
quarterly Financial Statements, Borrowers shall deliver to Agent a certificate,
signed by the chief financial officer of Details, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins. Failure to timely deliver such Financial Statements shall, in addition
to any other remedy provided for in this Agreement, result in an increase in the
Applicable Margins to the highest level set forth in the foregoing grid, until
the first day of the first calendar month following the delivery of those
Financial Statements demonstrating that such an increase is not required. If an
Event of Default has occurred and is continuing at the time any reduction in the
Applicable Margins is to be implemented, that reduction shall be deferred until
the first day of the first calendar month following the date on which such Event
of Default is waived or cured.
(b) If any payment on any Loan becomes due and payable on
a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum
basis and interest shall be made by Agent on the basis of a 360-day year, in
each case for the actual number of days occurring in the period for which such
interest and Fees are payable. The Index Rate is a floating rate determined for
each day. Each determination by Agent of an interest rate and Fees hereunder
shall be presumptive evidence of the correctness of such rates and Fees.
8
CREDIT AGREEMENT
(d) So long as an Event of Default has occurred and is
continuing under SECTION 8.1(a), (h) or (i), or so long as any other Event of
Default has occurred and is continuing and at the election of Requisite Lenders
confirmed by written notice from Agent to Borrower Representative, the interest
rates applicable to the Loans and the Letter of Credit Fees shall be increased
by two percentage points (2%) per annum above the rates of interest or the rate
of such Fees otherwise applicable hereunder unless Agent or Requisite Lenders
elect to impose a smaller increase (the "Default Rate"), and all outstanding
Obligations shall bear interest at the Default Rate applicable to such
Obligations. Interest and Letter of Credit Fees at the Default Rate shall accrue
from the initial date of such Event of Default until that Event of Default is
cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in
SECTION 2.2, Borrower Representative shall have the option to (i) request that
any Revolving Credit Advance in US Dollars be made as a LIBOR Loan, (ii) convert
at any time all or any part of outstanding Loans in US Dollars (other than the
Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR
Loan in US Dollars to an Index Rate Loan in US Dollars, subject to payment of
LIBOR breakage costs in accordance with SECTION 1.13(b) if such conversion is
made prior to the expiration of the LIBOR Period applicable thereto, or (iv)
continue all or any portion of any Loan in US Dollars (other than the Swing Line
Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period and the
succeeding LIBOR Period of that continued Loan shall commence on the first day
after the last day of the LIBOR Period of the Loan to be continued. Any Loan or
group of Loans having the same proposed LIBOR Period to be made or continued as,
or converted into, a LIBOR Loan must be in a minimum amount of US$1,000,000 and
integral multiples of US$500,000 in excess of such amount. Any such election
must be made by 1:00 p.m. (Toronto time) on the second Business Day prior to (1)
the date of any proposed Advance which is to bear interest at the LIBOR Rate,
(2) the end of each LIBOR Period with respect to any LIBOR Loans to be continued
as such, or (3) the date on which Borrower Representative wishes to convert any
Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by Borrower
Representative in such election. If no election is received with respect to a
LIBOR Loan by 1:00 p.m. (Toronto time) on the second Business Day prior to the
end of the LIBOR Period with respect thereto (or if a Default or an Event of
Default has occurred and is continuing or if the additional conditions precedent
set forth in SECTION 2.2 shall not have been satisfied), that LIBOR Loan shall
be converted to an Index Rate Loan at the end of its LIBOR Period. Borrower
Representative must make such election by notice to Agent in writing, by
telecopy or overnight courier. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of EXHIBIT 1.5(e).
(f) If any provision of this Agreement or any of the
other Loan Documents would obligate Borrowers to make any payment of interest
under the Obligations or other amount payable to any Lender in an amount or
calculated at a rate which would be prohibited by law or would result in a
receipt by such Lender of "interest" under the Obligations at a "criminal rate"
(as such terms are construed under the Criminal Code (Canada)) then,
notwithstanding such provision, such amount or rates shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by law or so result in a
receipt by that Lender of interest under the Obligations at a criminal rate,
such adjustment to be effected, to the extent necessary, as follows: (i)
firstly, by reducing the
9
CREDIT AGREEMENT
amount or rates of interest required to be paid to the affected Lenders under
this SECTION 1.5; and (ii) thereafter, by reducing any fees, commissions,
premiums and other amounts required to be paid to the affected Lender which
would constitute interest under the Obligations for purposes of Section 347 of
the Criminal Code (Canada). Notwithstanding the foregoing, and after giving
effect to all adjustments contemplated thereby, if any Lender shall have
received an amount in excess of the maximum permitted by that section of the
Criminal Code (Canada), then Borrowers shall be entitled, by notice in writing
to the affected Lender, to obtain reimbursement from that Lender in an amount
equal to such excess, and pending such reimbursement, such amount shall be
deemed to be an amount payable by that Lender to Borrowers. Any amount or rate
of interest under the Obligations referred to in this SECTION 1.5(f) shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that any Loan
remains outstanding on the assumption that any charges, fees or expenses that
fall within the meaning of "interest" (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be pro-rated over that
period of time and otherwise be pro-rated over the period from the Closing Date
to the Termination Date (with reference to the Obligations) and, in the event of
a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Agent shall be conclusive for the purposes of such determination.
(g) For purposes of disclosure pursuant to the Interest
Act (Canada), the annual rates of interest or Fees to which the rates of
interest or Fees provided in this Agreement and the other Loan Documents (and
stated herein or therein, as applicable, to be computed on the basis of a
360-day year or any other period of time less than a calendar year) are
equivalent to the rates so determined multiplied by the actual number of days in
the applicable calendar year and divided by 360 or such other period of time,
respectively. The rates of interest and Fees hereunder are nominal rates, and
not effective rates of yield.
1.6 Eligible Accounts. All of the Accounts owned by each Borrower
and reflected in the most recent Borrowing Base Certificate delivered by
Borrower Representative to Agent shall be "Eligible Accounts" for purposes of
this Agreement, except any Account to which any of the exclusionary criteria set
forth below applies. Agent shall have the right to establish, modify or
eliminate Reserves against Eligible Accounts from time to time in its reasonable
credit judgment. In addition, Agent reserves the right, at any time and from
time to time after the Closing Date, to adjust any of the criteria set forth
below and to establish new criteria, and to adjust advance rates with respect to
Eligible Accounts, in its reasonable credit judgment, reflecting changes in the
collectibility or realization values of such Accounts arising or discovered by
Agent after the Closing Date subject to the approval of Supermajority Revolving
Lenders in the case of adjustments or new criteria or changes in advance rates
which have the effect of making more credit available. Eligible Accounts shall
not include any Account of any Borrower:
(a) that does not arise from the sale of goods or the
performance of services by such Borrower in the ordinary course of its business;
(b) (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 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
10
CREDIT AGREEMENT
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;
(c) to the extent that any defense, counterclaim, setoff
or dispute is asserted as to such Account (it being understood that only the
amount subject to dispute, counterclaim, setoff or defense shall be ineligible);
(d) 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;
(e) with respect to which an invoice has not been sent to
the applicable Account Debtor;
(f) that (i) is not owned by such Borrower or (ii) is
subject to any Lien of any other Person, other than Liens in favor of Agent, on
behalf of itself and Lenders;
(g) that arises from a sale to any director, officer,
other employee or Affiliate of any Credit Party, or to any entity that has any
common officer or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is
the Canadian government (Her Majesty the Queen in Right of Canada) or a
political subdivision thereof, or any province, territory, or any municipality
or department, agency or instrumentality thereof, or that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof, unless Agent, in
its sole discretion, has agreed to the contrary in writing and such Borrower, if
necessary or desirable, has complied with respect to such obligation with the
Financial Administration Act (Canada) or the Federal Assignment of Claims Act of
1940, or any applicable provincial or state, county or municipal law restricting
the assignment thereof with respect to such obligation;
(i) that is the obligation of an Account Debtor located
in a country other than the United States or Canada;
(j) 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;
(k) that arises with respect to goods that 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;
(l) that is in default; provided, that without limiting
the generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier
of 60 days following its due date or 90 days following its original invoice
date;
11
CREDIT AGREEMENT
(ii) the Account Debtor obligated upon such
Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) a petition is filed by or against any
Account Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if fifty
percent (50%) or more of the US Dollar amount or Canadian Dollar amount, as the
case may be, of all Accounts owing by that Account Debtor are ineligible under
the other criteria set forth in this SECTION 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself
and Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties
in the Loan Documents are untrue;
(p) to the extent such Account is evidenced by a
judgment, Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable credit judgment;
(r) to the extent that such Account, together with all
other Accounts owing by such Account Debtor and its Affiliates as of any date of
determination exceed 10% of all Eligible Accounts; or
(s) that is payable in any currency other than Canadian
Dollars or US Dollars.
1.7 [INTENTIONALLY OMITTED]
1.8 Cash Management System. On or prior to the Closing Date,
Borrowers will establish and will maintain until the Termination Date, the cash
management system described in ANNEX C (the "Cash Management System").
1.9 Fees. Borrowers shall pay to Agent, for the ratable benefit of
Revolving Lenders, the Letter of Credit Fee as provided in ANNEX B.
1.10 Receipt of Payments. Borrowers shall make each payment of
principal, interest, fees and other amounts under this Agreement and the other
Loan Documents in the currency in which such obligation is denominated and all
other amounts payable by Borrowers under this Agreement and the other Loan
Documents shall be paid in US Dollars. Borrowers shall make each payment under
this Agreement not later than 2:00 p.m. (Toronto time) on the day when due in
immediately available funds to the Collection Account. For purposes of computing
interest and Fees and determining Borrowing Availability as of any date, all
payments shall be deemed received on the first Business Day following the
Business Day on which immediately available funds therefor are received in the
Collection Account prior to 2:00 p.m. (Toronto time).
12
CREDIT AGREEMENT
Payments received after 2:00 p.m. (Toronto time) on any Business Day or on a day
that is not a Business Day shall be deemed to have been received on the
following Business Day. If Agent or any Lender receives any payment on any
Obligation from or on behalf of any Borrower in a currency other than the
currency in which such Obligation is denominated, Agent or such Lender may
convert the payment (including the monetary proceeds of realization upon any
Collateral) into the currency of the relevant Obligation at the exchange rate
that Agent or such Lender would be prepared to sell the currency in which the
relevant Obligation is denominated against the currency received in Toronto on
the Business Day immediately preceding the date of actual payment. The
Obligation shall be satisfied only to the extent of the amount actually received
by Agent upon such conversion.
1.11 Application and Allocation of Payments.
(a) So long as no Event of Default has occurred and is
continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied, first, to the Swing Line Loan and,
second, to the Revolving Loan; and (ii) mandatory prepayments shall be applied
as set forth in SECTIONS 1.3(c) and 1.3(d). All payments and prepayments applied
to a particular Loan shall be applied ratably to the portion thereof held by
each Lender as determined by its Pro Rata Share. As to any other payment, and as
to all payments made when an Event of Default has occurred and is continuing or
following the Commitment Termination Date, each Borrower hereby irrevocably
waives the right to direct the application of any and all payments received from
or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that
Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In
the absence of a specific determination by Agent with respect thereto, payments
shall be applied to amounts then due and payable in the following order: (1) to
Fees and Agent's expenses reimbursable hereunder; (2) to interest on the Swing
Line Loan; (3) to principal payments on the Swing Line Loan; (4) to interest on
the other Loans, ratably in proportion to the interest accrued as to each Loan;
(5) to principal payments on the other Loans and to provide cash collateral for
Letter of Credit Obligations in the manner described in ANNEX B, ratably to the
aggregate, combined principal balance of the other Loans and outstanding Letter
of Credit Obligations; and (6) to all other Obligations including expenses of
Lenders to the extent reimbursable under SECTION 11.3. Notwithstanding the
generality of the foregoing, it is understood and agreed by the parties that
under no circumstances shall any payment by Borrowers (or any Collateral
provided by Borrowers or the proceeds thereof) be applied to the US Obligations
unless, not later than 45 Business Days prior to any proposed application of any
payment by Borrowers (or any such Collateral or proceeds) to the US Obligations,
Agent notifies Borrower Representative in writing of its intention to make such
application and, if Borrower Representative believes that such application would
violate Canadian law or would have a Negative Effect, the procedures set forth
in SECTION 5.12 with respect to obtaining a tax opinion shall be followed, and
no such application shall be made if such an opinion is delivered stating that
such application will result in a Negative Effect or violate Canadian law.
(b) Agent is authorized to, and at its sole election may,
charge to the Revolving Loan balance on behalf of each Borrower and cause to be
paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with SECTION 5.4(a)) and interest
13
CREDIT AGREEMENT
and principal, other than principal of the Revolving Loan, owing by Borrowers
under this Agreement or any of the other Loan Documents if and to the extent
Borrowers fail to pay promptly any such amounts as and when due, even if the
amount of such charges would exceed Borrowing Availability at such time. At
Agent's option and to the extent permitted by law, any charges so made shall
constitute part of the Revolving Loan hereunder.
1.12 Loan Account and Accounting. Agent shall maintain a loan
account (the "Loan Account") on its books to record all Advances and all
payments made by Borrowers, and all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and Lenders by each Borrower; provided that any failure to so record or
any error in so recording shall not limit or otherwise affect any Borrower's
duty to pay the Obligations. Agent shall render to Borrower Representative a
monthly accounting of transactions with respect to the Loans setting forth the
balance of the Loan Account as to each Borrower for the immediately preceding
month. Unless Borrower Representative notifies Agent in writing of any objection
to any such accounting (specifically describing the basis for such objection),
30 days after the date thereof, each and every such accounting shall be
presumptive evidence of all matters reflected therein. Only those items
expressly objected to in such notice shall be deemed to be disputed by
Borrowers. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it.
1.13 Indemnity.
(a) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) that may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, "Indemnified Liabilities"); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
14
CREDIT AGREEMENT
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on
the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of any borrowing of, conversion
into or continuation of LIBOR Loans after Borrower Representative has given
notice requesting the same in accordance herewith; or (iv) any Borrower shall
fail to make any prepayment of a LIBOR Loan after Borrower Representative has
given a notice thereof in accordance herewith, then Borrowers shall jointly and
severally indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be deemed to have actually funded its relevant LIBOR Loan through the purchase
of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount
of that LIBOR Loan and having a maturity comparable to the relevant LIBOR
Period; provided, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower Representative with its
written calculation of all amounts payable pursuant to this SECTION 1.13(b), and
such calculation shall be binding on the parties hereto unless Borrower
Representative shall object in writing within ten Business Days of receipt
thereof, specifying the basis for such objection in detail.
1.14 Access.
(a) Each Credit Party that is a party hereto shall,
during normal business hours, from time to time upon two Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors, officers and employees of each Credit Party
and to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If an Event of
Default has occurred and is continuing, each such Credit Party shall provide
such access to Agent at all times and without advance notice. Furthermore, so
long as any Event of Default has occurred and is continuing, Borrowers shall
provide Agent with access to their suppliers and customers. Each Credit Party
shall make available to Agent and its counsel reasonably promptly originals or
copies of all books and records that Agent may reasonably request. Each Credit
15
CREDIT AGREEMENT
Party shall deliver any document or instrument necessary for Agent, as it may
from time to time reasonably request, to obtain records from any service bureau
or other Person that maintains records for such Credit Party, and shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by such Credit Party. Agent will give Lenders at least five
days' prior written notice of regularly scheduled audits. Representatives of
other Lenders may accompany Agent's representatives on regularly scheduled
audits at no charge to Borrowers.
(b) Borrowers shall pay Agent a Fee of US$850 (or the
Equivalent Amount in Canadian Dollars) per day per individual (plus all
out-of-pocket costs and expenses) in connection with Lender's field examinations
permitted under SECTION 1.14(a) and SECTION 4(c) of the Security Agreement. Such
Fees and expenses shall be charged against the Revolving Loan in connection with
each field audit conducted after the Closing Date, but shall not be duplicative
of the Fees and expenses payable under SECTION 1.14(b) of the US Credit
Agreement.
1.15 Taxes.
(a) Any and all payments on the Obligations by each
Borrower hereunder (including any payments made pursuant to SECTION 12) or under
the Notes shall be made, in accordance with this SECTION 1.15, free and clear of
and without deduction for any and all present or future Taxes. If any Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable on the Obligations hereunder (including any sum payable pursuant to
SECTION 12) or under the Notes, (i) the sum payable shall be increased as much
as shall be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this SECTION 1.15) Agent
or Lenders, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions, and (iii) such Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within 30
days after the date of any payment of Taxes, Borrower Representative shall
furnish to Agent the original or a certified copy of a receipt evidencing
payment thereof.
(b) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and, within ten days of demand therefor, pay
Agent and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under this SECTION 1.15) paid by Agent or
such Lender, as appropriate, and any liability (including penalties, interest
and expenses, except to the extent that any such penalties, interest or expenses
resulted from Agent's or such Lender's, as the case may be, gross negligence or
willful misconduct) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted.
(c) If a Lender receives a refund of any Charges or other
amounts as to which such Lender has been indemnified in accordance with SECTION
1.15 or on account of which additional amounts have been paid by Credit Parties
in accordance with SECTIONS 1.15 or 12, then Lender will pay over such refund or
other amount to the applicable Credit Party, together with any cash interest
actually received thereupon from the applicable Governmental Authority;
provided, that no such refund shall include any foreign tax credit or similar
credit provided by any jurisdiction to any Lender.
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CREDIT AGREEMENT
(d) Subject to the provisions of SECTION 5.12, Borrowers'
obligation to pay Taxes in accordance with this SECTION 1.15 shall be limited to
Taxes arising in Canada.
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law),
in each case, adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Lender and thereby reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder, then Borrowers shall from time to time
upon demand by such Lender (with a copy of such demand to Agent) pay to Agent,
for the account of such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender to
Borrower Representative and to Agent shall be presumptive evidence of the
matters set forth therein.
(b) If, due to either (i) the introduction of or any
change in any law or regulation (or any change in the interpretation thereof) or
(ii) the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower
Representative and to Agent by such Lender, shall be presumptive evidence of the
matters set forth therein. Each Lender agrees that, as promptly as practicable
after it becomes aware of any circumstances referred to above which would result
in any such increased cost, the affected Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrowers pursuant to this SECTION 1.16(b).
(c) Notwithstanding anything to the contrary contained
herein, if the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan, then, unless that Lender is able to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of that Lender without, in
that Lender's reasonable opinion, materially adversely affecting it or its Loans
or the income obtained therefrom, on notice thereof and demand therefor by such
Lender to Borrower Representative through Agent, (i) the obligation of such
Lender to agree to make or to make or to continue to fund or maintain LIBOR
Loans shall terminate and (ii) each Borrower shall forthwith prepay in full all
outstanding LIBOR Loans owing by such Borrower to such Lender, together with
interest accrued thereon, unless Borrower Representative on behalf of such
Borrower, within five
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CREDIT AGREEMENT
Business Days after the delivery of such notice and demand, converts all LIBOR
Loans owing to such Lender into Index Rate Loans.
(d) Within 30 days after receipt by Borrower
Representative of written notice and demand from any Lender (an "Affected
Lender") for payment of additional amounts or increased costs as provided in
SECTIONS 1.15(a), 1.16(a), 1.16(b) or 1.16(c), Borrower Representative may, at
its option, notify Agent and such Affected Lender of its intention to replace
the Affected Lender. So long as no Default or Event of Default has occurred and
is continuing, Borrower Representative, with the consent of Agent, may obtain,
at Borrowers' expense, a replacement Lender ("Replacement Lender") for the
Affected Lender, which Replacement Lender must be reasonably satisfactory to
Agent. If Borrowers obtain a Replacement Lender within 120 days following notice
of their intention to do so, the Affected Lender must sell and assign its Loans
and Commitments to such Replacement Lender for an amount equal to the principal
balance of all Loans held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale and such assignment
shall not require the payment of an assignment fee to Agent; provided, that
Borrowers shall have reimbursed such Affected Lender for the additional amounts
or increased costs that it is entitled to receive under this Agreement through
the date of such sale and assignment. Notwithstanding the foregoing, Borrowers
shall not have the right to obtain a Replacement Lender if the Affected Lender
rescinds its demand for increased costs or additional amounts within 15 days
following its receipt of Borrowers' notice of intention to replace such Affected
Lender. Furthermore, if Borrowers give a notice of intention to replace and do
not so replace such Affected Lender within 120 days thereafter, Borrowers'
rights under this SECTION 1.16(d) shall terminate with respect to such Affected
Lender and Borrowers shall promptly pay all increased costs or additional
amounts demanded by such Affected Lender pursuant to SECTIONS 1.15(a), 1.16(a)
and 1.16(b).
1.17 Single Loan. All Loans to each Borrower and all of the other
Obligations of each Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of that Borrower secured,
until the Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated
to make any Loan or incur any Letter of Credit Obligations on the Closing Date,
or to take, fulfill, or perform any other action hereunder, until the following
conditions have been satisfied or provided for in a manner reasonably
satisfactory to Agent, or waived in writing by Agent and Requisite Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, each other Credit Party, Agent and Lenders, and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including all those listed in the
Schedule of Documents attached hereto as ANNEX D, each in form and substance
reasonably satisfactory to Agent.
(b) [INTENTIONALLY OMITTED]
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CREDIT AGREEMENT
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an officer's
certificate in form and substance reasonably satisfactory to Agent affirming
that no such consents or approvals are required.
(d) [INTENTIONALLY OMITTED]
(e) Payment of Costs and Expenses. Borrowers shall have
reimbursed Agent for all costs and expenses of closing presented as of the
Closing Date to the extent reimbursable under SECTION 11.3.
(f) Capital Structure: Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be acceptable to Agent in its sole discretion.
(g) Due Diligence. Agent shall have completed its
business and legal due diligence, including a roll forward of its previous
Collateral audit with results reasonably satisfactory to Agent.
(h) [INTENTIONALLY OMITTED]
(i) Consummation of Related Transactions. Agent shall
have received fully executed copies of each of the Related Transactions
Documents, each of which shall be in full force and effect in form and substance
reasonably satisfactory to Agent. The Related Transactions shall have been
consummated in accordance with the terms of the Related Transactions Documents.
2.2 Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if,
as of the date thereof:
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect as of such
date as determined by Agent or Requisite Lenders, except to the extent that such
representation or warranty expressly relates to an earlier date and except for
changes therein expressly permitted or expressly contemplated by this Agreement,
and Agent or Requisite Revolving Lenders have determined not to make such
Advance, convert or continue any Loan as LIBOR Loan or incur such Letter of
Credit Obligation as a result of the fact that such warranty or representation
is untrue or incorrect;
(b) (i) any "Default" or "Event of Default" has occurred
and is continuing under and as defined in the US Credit Agreement, or (ii) any
Default or Event of Default has occurred and is continuing or would result
hereunder after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligation), and Agent or Requisite Revolving Lenders shall have
determined not to make any Advance, convert or continue any Loan as a LIBOR Loan
or incur any Letter of Credit Obligation as a result of that "Default" or "Event
of Default" under the US Credit Agreement or that Default or Event of Default
hereunder;
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CREDIT AGREEMENT
(c) after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), the outstanding principal amount of the
Revolving Loan would exceed the lesser of (i) the Aggregate Borrowing Base less
the then outstanding principal amount of the Swing Line Loan, and (ii) the
Maximum Amount less the aggregate then outstanding principal amount of the Swing
Line Loan, the US Revolving Loan and the US Swing Line Loan; or
(d) after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligations), Parent shall not be in violation of any
maximum Indebtedness covenant applicable to the Series B Preferred Stock.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this SECTION 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in SECTION 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law. Each Credit Party:
(a) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in DISCLOSURE
SCHEDULE (3.1); (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in exposure to losses or liabilities
which could reasonably be expected to have a Material Adverse Effect; (c) has
the requisite power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now conducted or proposed to
be conducted; (d) subject to specific representations regarding Environmental
Laws, has all licenses, permits, consents or approvals from or by, and has made
all material filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA and other employee pension and
benefit matters, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
3.2 Executive Offices and Collateral Locations. As of the Closing
Date, each Credit Party's name as it appears in official filings in its
jurisdiction of incorporation or organization,
20
CREDIT AGREEMENT
jurisdiction of incorporation or organization, organization type, organization
number, if any, issued by its jurisdiction of incorporation or organization, and
the current location of each Credit Party's chief executive office and the
warehouses and premises at which any Collateral is located are set forth in
DISCLOSURE SCHEDULE (3.2), and none of such locations has changed within the
four months preceding the Closing Date and each Credit Party has only one
jurisdiction of incorporation or organization.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Credit Party's power; (b) have been duly authorized by all
necessary corporate, limited liability company or partnership action; (c) do not
contravene any provision of such Credit Party's charter, bylaws or partnership
or operating agreement as applicable; (d) do not violate any law or regulation,
or any order or decree of any court or Governmental Authority; (e) do not
conflict with or result in the breach or termination of, constitute a default
under or accelerate or permit the acceleration of any performance required by,
any indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Credit Party is a party or by which such Credit Party or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Credit Party other than those in favor of
Agent, on behalf of itself and Lenders, pursuant to the Loan Documents; and (g)
do not require the consent or approval of any Governmental Authority or any
other Credit Party, except those referred to in SECTION 2.1(c), all of which
will have been duly obtained, made or complied with prior to the Closing Date.
Each of the Loan Documents shall be duly executed and delivered by each Credit
Party that is a party thereto and each such Loan Document shall constitute a
legal, valid and binding obligation of such Credit Party enforceable against it
in accordance with its terms.
3.4 Financial Statements and Projections. Except for the
Projections, all Financial Statements concerning Details and its Subsidiaries
that are referred to below have been prepared in accordance with GAAP
consistently applied throughout the periods covered (except as disclosed therein
and except, with respect to unaudited Financial Statements, for the absence of
footnotes and normal year-end audit adjustments) and present fairly in all
material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the
periods then ended.
(a) Financial Statements. The following Financial
Statements attached hereto as DISCLOSURE SCHEDULE (3.4(a)) have been delivered
on the date hereof:
(i) (A) The internal consolidated and, except
with respect to statements of cash flow, consolidating balance sheets at
December 31, 2003, and the related statements of income and cash flows for
Details and its Subsidiaries for the Fiscal Year then ended (without footnotes).
(B) The audited consolidated balance
sheets at December 31, 2003, and the related statements of income and cash flows
for Parent and its Subsidiaries for the Fiscal Year then ended.
21
CREDIT AGREEMENT
(ii) The unaudited consolidated balance sheet(s)
at April 30, 2004, and the related statement(s) of income of Details and its
Subsidiaries for the four Fiscal Months then ended.
(b) Projections. The Projections delivered on the date
hereof and attached hereto as DISCLOSURE SCHEDULE (3.4(b)) have been prepared by
US Borrowers in light of the past operations of their businesses, but including
future payments of known contingent liabilities and reflect projections for the
two-year period beginning on January 1, 2004, on a month-by-month basis for the
first year and on a year-by-year basis thereafter. The Projections are based
upon the same accounting principles as those used in the preparation of the
financial statements described above and the estimates and assumptions stated
therein, all of which Credit Parties believe to be reasonable and fair in light
of current conditions and current facts known to Credit Parties and, as of the
Closing Date, reflect Credit Parties' good faith and reasonable estimates of the
future financial performance of Credit Parties for the period set forth therein,
it being understood that uncertainty is inherent in any forecasts or projections
and that no assurance can be given that the results set forth in the Projections
will actually be obtained. The Projections are not a guaranty of future
performance, and actual results may differ from the Projections.
3.5 Material Adverse Effect. Between February 29, 2004, and the
Closing Date, (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Projections and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect,
and (c) no Credit Party is in default, and to the best of Borrowers' knowledge
no third party is in default, under any material contract, lease or other
agreement or instrument, that alone or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Since February 29, 2004, no event
has occurred, that alone or together with other events, could reasonably be
expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in DISCLOSURE SCHEDULE (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described in DISCLOSURE SCHEDULE (3.6), and copies of all such
leases or a summary of terms thereof reasonably satisfactory to Agent have been
delivered to Agent. DISCLOSURE SCHEDULE (3.6) further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date. Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal property and assets. As of the
Closing Date, none of the properties and assets of any Credit Party are subject
to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to any Credit Party that may result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each Credit Party has received all deeds, assignments, waivers,
consents, nondisturbance and attornment or similar agreements, bills of sale and
other documents, and has duly effected all recordings, filings and other actions
22
CREDIT AGREEMENT
necessary to establish, protect and perfect such Credit Party's right, title and
interest in and to all such Real Estate and other properties and assets.
DISCLOSURE SCHEDULE (3.6) also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate. As of
the Closing Date, no portion of any Credit Party's Real Estate has suffered any
material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. As of the Closing Date, all material permits required to
have been issued or appropriate to enable the Real Estate to be lawfully
occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and effect.
3.7 Labor Matters. As of the Closing Date: (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party's knowledge, threatened; (b) hours worked by and payment made to employees
of each Credit Party comply in all material respects with applicable federal,
provincial, state, local or foreign law applicable to such matters; (c) no
Credit Party is a party to or bound by any collective bargaining agreement (and
true and complete copies of any agreements described in DISCLOSURE SCHEDULE
(3.7) have been delivered to Agent); (e) there is no organizing activity
involving any Credit Party pending or, to any Credit Party's knowledge,
threatened by any labor union or group of employees; (f) except as described in
DISCLOSURE SCHEDULE (3.7), there are no representation proceedings pending or,
to any Credit Party's knowledge, threatened with any labor relations board, and
no labor organization or group of employees of any Credit Party has made a
pending demand for union certification or recognition; and (g) there are no
material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in DISCLOSURE SCHEDULE (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned by
each of the Stockholders and in the amounts set forth in DISCLOSURE SCHEDULE
(3.8). Except as set forth in DISCLOSURE SCHEDULE (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in SECTION 6.3 (including DISCLOSURE SCHEDULE
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940 (a U.S. statute). No Credit Party is subject to regulation
under the Public Utility Holding Company Act of 1935 or the Federal Power Act
(both U.S. statutes), or any other United States or Canadian federal, state or
provincial statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrowers, the incurrence of the Letter of Credit Obligations on behalf of
Borrowers, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any
23
CREDIT AGREEMENT
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission, the Ontario Securities Commission, or any
applicable foreign equivalent or similar regulatory body.
3.10 Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the U.S. Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). No Credit Party owns any Margin Stock,
and none of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any Margin Stock
or for any other purpose that might cause any of the Loans or other extensions
of credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulations T, U or X of the U.S. Federal Reserve Board. No Credit
Party will take or permit to be taken any action that might cause any Loan
Document to violate any regulation of the U.S. Federal Reserve Board.
3.11 Taxes. All United States and Canadian federal and other
material tax returns, reports and statements, including information returns,
required by any Governmental Authority to be filed by any Credit Party have been
filed with the appropriate Governmental Authority, and all Charges have been
paid prior to the date on which any fine, penalty, interest or late charge may
be added thereto for nonpayment thereof, excluding Charges or other amounts
being contested in accordance with SECTION 5.2(b) and unless the failure to so
file or pay would not reasonably be expected to result in fines, penalties or
interest in excess of US$250,000 or the Equivalent Amount in Canadian Dollars in
the aggregate. Proper and accurate amounts have been withheld by each Credit
Party from its respective employees for all periods in full and complete
compliance with all applicable federal, provincial, state, local and foreign
laws and such withholdings have been timely paid to the respective Governmental
Authorities. DISCLOSURE SCHEDULE (3.11) sets forth as of the Closing Date those
taxable years for which any Credit Party's tax returns are currently being
audited by the IRS, the CRA or any other applicable Governmental Authority and
any assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described in DISCLOSURE SCHEDULE
(3.11), as of the Closing Date, no Credit Party has executed or filed with the
IRS, the CRA or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. None of the Credit Parties and their respective
predecessors are liable for any Charges (a) under any agreement (including any
tax sharing agreements) or (b) to each Credit Party's knowledge, as a
transferee. As of the Closing Date, no Credit Party has agreed or been requested
to make any adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, which would reasonably be expected to have a
Material Adverse Effect.
3.12 ERISA; Canadian Pension and Benefit Plans.
(a) DISCLOSURE SCHEDULE (3.12) lists as of the Closing
Date all material Plans. Copies of all listed Title IV Plans, if any, together
with a copy of the latest Form 5500-series report for each such Title IV Plan,
have been made available to Agent. Except with respect to
24
CREDIT AGREEMENT
Multiemployer Plans, each Qualified Plan has received a favorable determination
or opinion letter from the IRS or is within the applicable remedial amendment
period. Except as would not reasonably be expected to have a Material Adverse
Effect: (i) each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the IRC and its terms, including the timely
filing of all reports required under the IRC or ERISA; (ii) neither any Credit
Party nor ERISA Affiliate has failed to make any material contribution or pay
any material amount due as required by either Section 412 of the IRC or Section
302 of ERISA or the terms of any such Plan; and (iii) no non-exempt "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC,
has occurred with respect to any Plan, that would reasonably be expected to
subject any Credit Party to a material tax on prohibited transactions imposed by
Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in DISCLOSURE SCHEDULE (3.12):
(i) no Title IV Plan has any material Unfunded Pension Liability; (ii) no ERISA
Event has occurred or is reasonably expected to occur that could reasonable be
expected to have a Material Adverse Effect; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened material claims (other than claims
for benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan
that could reasonably be expected to have a Material Adverse Effect; (iv) no
Credit Party or ERISA Affiliate has incurred or reasonably expects to incur any
material liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; and (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041 of ERISA, nor has
any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at any
time within the last five years) with material Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time).
(c) All Canadian Benefit Plans (other than, for greater
certainty, universal plans created by and to which any Credit Party is obligated
to contribute by statute) and Canadian Pension Plans adopted by any Credit Party
have been made available to Agent. The Canadian Pension Plans are duly
registered under the ITA and all other applicable laws that require registration
and no event has occurred that is reasonably likely to cause the loss of such
registered status. All obligations of any Credit Party (including funding,
investment and administration obligations) required to be performed by the terms
of the Canadian Pension Plans and the funding agreements therefor have been
performed in all material respects in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian Pension Plans
or the Canadian Benefit Plans. There are no outstanding disputes concerning the
assets of the Canadian Pension Plans or the Canadian Benefit Plans or claims
asserted against any such Plans, or against any Person as fiduciary or sponsor
of any such Plans, in each case that could reasonably be expected to have a
Material Adverse Effect. Each of the Canadian Pension Plans is fully funded on a
solvency basis (using actuarial methods and assumptions that are consistent with
the valuations last filed with the applicable Governmental Authorities and that
are consistent with generally accepted actuarial principles).
3.13 No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party,
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CREDIT AGREEMENT
before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "Litigation"), (a) that challenges any Credit Party's
right or power to enter into or perform any of its obligations under the Loan
Documents to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) that has a reasonable risk of
being determined adversely to any Credit Party and that, if so determined, could
reasonably be expected to have a Material Adverse Effect. Except as set forth in
DISCLOSURE SCHEDULE (3.13), as of the Closing Date there is no Litigation
pending or, to any Credit Party's knowledge, threatened, that seeks damages (if
specified) in excess of US$500,000 or the Equivalent Amount in Canadian Dollars
or injunctive relief against, or alleges criminal misconduct of, any Credit
Party.
3.14 Brokers. Except as set forth in DISCLOSURE SCHEDULE (3.14), no
broker or finder brought about the obtaining, making or closing of the Loans or
the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.15 Intellectual Property. As of the Closing Date, each Credit
Party owns or has rights to use all Intellectual Property necessary to continue
to conduct its business as now conducted by it or presently proposed to be
conducted by it in all material respects, and each Patent, Trademark, Copyright
and License is listed, together with application or registration numbers, as
applicable, in DISCLOSURE SCHEDULE (3.15). Each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect. Except as set
forth in DISCLOSURE SCHEDULE (3.15), no Credit Party is aware of any material
infringement claim by any other Person with respect to any Intellectual
Property.
3.16 Full Disclosure. No information contained in this Agreement,
any of the other Loan Documents, Financial Statements or Collateral Reports or
other written reports from time to time prepared by any Credit Party and
delivered hereunder or any written statement prepared by any Credit Party and
furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to
the terms of this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. Projections from time to time
delivered hereunder are or will be based upon the estimates and assumptions
stated therein, all of which Borrowers believed at the time of delivery to be
reasonable and fair in light of current conditions and current facts known to
Borrowers as of such delivery date, and reflect Borrowers' good faith and
reasonable estimates of the future financial performance of Borrowers and of the
other information projected therein for the period set forth therein. Such
Projections are not a guaranty of future performance and actual results may
differ from those set forth in such Projections. The Liens granted to Agent, on
behalf of itself and Lenders, pursuant to the Collateral Documents will at all
times be fully perfected first priority Liens in and to the Collateral described
therein to the extent perfection can be achieved under the PPSA (or other
applicable legislation) through either possession, control, or the filing of
financing statements, and such possession, control or filings, as appropriate,
has occurred, subject, as to priority, only to Permitted Encumbrances.
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CREDIT AGREEMENT
3.17 Environmental Matters.
(a) Except as set forth in DISCLOSURE SCHEDULE (3.17), as
of the Closing Date: (i) the Real Estate is free of contamination from any
Hazardous Material except for such contamination that would not adversely impact
the value or marketability of such Real Estate and that would not result in
Environmental Liabilities that could reasonably be expected to exceed US$500,000
or the Equivalent Amount in Canadian Dollars; (ii) no Credit Party has caused or
permitted any material Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate, except for such Releases that would
not result in Environmental Liabilities that could reasonably be expected to
exceed US$500,000 or the Equivalent Amount in Canadian Dollars; (iii) the Credit
Parties are and have been in compliance with all Environmental Laws, except for
such noncompliance that would not result in Environmental Liabilities which
could reasonably be expected to exceed US$500,000 or the Equivalent Amount in
Canadian Dollars; (iv) the Credit Parties have obtained, and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted, except where
the failure to so obtain or comply with such Environmental Permits would not
result in Environmental Liabilities that could reasonably be expected to exceed
US$500,000 or the Equivalent Amount in Canadian Dollars, and all such
Environmental Permits are valid, uncontested and in good standing; (v) no Credit
Party is involved in operations or knows of any facts, circumstances or
conditions, including any Releases of Hazardous Materials, that are likely to
result in any Environmental Liabilities of such Credit Party which could
reasonably be expected to exceed US$500,000 or the Equivalent Amount in Canadian
Dollars; (vi) there is no pending Litigation arising under any Environmental
Laws or Environmental Permits that seeks damages, penalties, fines, costs or
expenses in excess of US$500,000 or the Equivalent Amount in Canadian Dollars or
injunctive relief against, or that alleges criminal misconduct by, any Credit
Party; and (vii) no notice has been received by any Credit Party identifying it
as a "potentially responsible party" or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any Credit Party being
identified as a "potentially responsible party" under CERCLA or analogous state
statutes, except, in each case, as has not and could not reasonably be expected
to result in Environmental Liabilities in excess of US$500,000 or the Equivalent
Amount in Canadian Dollars.
(b) Credit Parties have provided to Agent copies of all
existing environmental reports, reviews, audits and other material written
information pertaining to actual or potential Environmental Liabilities, in each
case relating to any Credit Party.
(c) This SECTION 3.17 shall consist of the sole and
exclusive representations and warranties with respect to environmental, health
and safety matters arising under Environmental Laws.
3.18 Insurance. DISCLOSURE SCHEDULE (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party.
3.19 Deposit and Disbursement Accounts. DISCLOSURE SCHEDULE (3.19)
lists all banks and other financial institutions at which any Credit Party
maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly
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CREDIT AGREEMENT
identifies the name, address and telephone number of each depository, the name
in which the account is held, a description of the purpose of the account, and
the complete account number therefor.
3.20 Government Contracts. Except as set forth in DISCLOSURE
SCHEDULE (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section
3727), the Financial Administration Act (Canada) or any similar United States or
Canadian state, provincial or local law.
3.21 Customer and Trade Relations. As of the Closing Date, there
exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of: the business relationship of any Credit Party
with any customer or group of customers whose purchases during the preceding 12
months caused them to be ranked among the ten largest customers of such Credit
Party; or the business relationship of any Credit Party with any supplier
essential to its operations.
3.22 Bonding; Licenses. Except as set forth in DISCLOSURE SCHEDULE
(3.22), as of the Closing Date, no Credit Party is a party to or bound by any
surety bond agreement or bonding requirement with respect to products or
services sold by it or any trademark or patent license agreement with respect to
products sold by it.
3.23 Solvency. Both before and after giving effect to (a) the Loans
and Letter of Credit Obligations to be made or incurred on the Closing Date or
such other date as Loans and Letter of Credit Obligations requested hereunder
are made or incurred, and (b) the payment and accrual of all transaction costs
in connection with the foregoing, Details, individually, and Credit Parties
taken as a whole, are and will be Solvent.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby
agrees that from and after the Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the Financial
Statements, notices, Projections and other information at the times, to the
Persons and in the manner set forth in ANNEX E.
(b) Each Credit Party executing this Agreement hereby
agrees that from and after the Closing Date and until the Termination Date, it
shall deliver to Agent or to Agent and Lenders, as required, the various
Collateral Reports (including Borrowing Base Certificates in the form of EXHIBIT
4.1(b)) at the times, to the Persons and in the manner set forth in ANNEX F.
4.2 Communication with Accountants. Each Credit Party executing
this Agreement authorizes Agent (a) upon prior written notice or (b) so long as
an Event of Default has occurred and is continuing, to communicate directly with
its independent certified public accountants and auditors, including
PricewaterhouseCoopers LLP, and authorizes and shall instruct those accountants
and auditors to communicate to Agent and each Lender information relating to any
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CREDIT AGREEMENT
Credit Party with respect to the business, results of operations and financial
condition of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof and until the
Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit
Party shall do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its material rights and
franchises; except as otherwise expressly permitted hereunder, continue to
conduct its business substantially as now conducted or as otherwise permitted
hereunder; at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and transact business only in such
corporate and trade names as are set forth in DISCLOSURE SCHEDULE (5.1).
5.2 Payment of Charges.
(a) Subject to SECTION 5.2(b), each Credit Party shall
pay and discharge or cause to be paid and discharged promptly all Charges
payable by it, including (i) Charges imposed upon it, its income and profits, or
any of its property (real, personal or mixed), (ii) Charges with respect to tax,
social security, unemployment withholding, Canadian employment insurance
employee withholdings and employer premiums and Canadian and provincial pension
plan employee withholdings and employer contributions with respect to its
employees, (iii) lawful claims for labor, materials, supplies and services or
otherwise, and (iv) all storage or rental charges payable to warehousemen and
bailees, in each case, before any thereof shall become past due, except in the
case of CLAUSES (i), (iii) and (iv) where the failure to pay or discharge such
Charges would not result in aggregate liabilities in excess of US$300,000 or the
Equivalent Amount in Canadian Dollars.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges, Taxes or claims
described in SECTION 5.2(a); provided, that: (i) adequate reserves with respect
to such contest are maintained on the books of such Credit Party, in accordance
with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges
(other than payments to warehousemen or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; and (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this SECTION 5.2(b) are no longer
met.
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CREDIT AGREEMENT
5.3 Books and Records. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as DISCLOSURE SCHEDULE
(3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and
expense, maintain the policies of insurance described in DISCLOSURE SCHEDULE
(3.18) as in effect on the date hereof or otherwise in form and amounts and with
insurers reasonably acceptable to Agent. Such policies of insurance (or the loss
payable and additional insured endorsements delivered to Agent) shall contain
provisions pursuant to which the insurer agrees to provide 30 days prior written
notice to Agent in the event of any non-renewal, cancellation or amendment of
any such insurance policy. If any Credit Party at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required above
or to pay all premiums relating thereto, Agent may at any time or times
thereafter obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect thereto that Agent deems advisable in its
reasonable credit judgment. Agent shall have no obligation to obtain insurance
for any Credit Party or pay any premiums therefor. By doing so, Agent shall not
be deemed to have waived any Default or Event of Default arising from any Credit
Party's failure to maintain such insurance or pay any premiums therefor. All
sums so disbursed, including reasonable attorneys' fees, court costs and other
charges related thereto, shall be payable on demand by Borrowers to Agent and
shall be additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change
in any Credit Party's risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) to require additional forms and limits of insurance to, in
Agent's reasonable credit judgment, adequately protect both Agent's and Lenders'
interests in all or any portion of the Collateral and to ensure that each Credit
Party is protected by insurance in amounts and with coverage customary for its
industry. If reasonably requested by Agent, each Credit Party shall deliver to
Agent from time to time a report of a reputable insurance broker reasonably
satisfactory to Agent, with respect to its insurance policies.
(c) Each Borrower shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Borrower irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Default or
Event of Default has occurred and is continuing or the anticipated insurance
proceeds exceed US$500,000 or the Equivalent Amount in Canadian Dollars, as such
Borrower's true and lawful agent and attorney-in-fact for the purpose of making,
settling and adjusting claims under such "All Risk" policies of insurance,
endorsing the name of such Borrower on any check or other item of payment for
the proceeds of such "All Risk" policies of insurance and for making all
determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers granted to
it pursuant to the foregoing power-of-attorney. Borrower Representative
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CREDIT AGREEMENT
shall promptly notify Agent of any loss, damage, or destruction to the
Collateral in the amount of US$250,000 (or the Equivalent Amount in Canadian
Dollars) or more, whether or not covered by insurance. After deducting from such
proceeds (i) the expenses incurred by Agent in the collection or handling
thereof, and (ii) amounts required to be paid to creditors (other than Lenders)
having Permitted Encumbrances, Agent may, at its option, apply such proceeds to
the reduction of the Obligations in accordance with SECTION 1.3(d).
Notwithstanding the foregoing, if the casualty giving rise to such insurance
proceeds could not reasonably be expected to have a Material Adverse Effect and
such insurance proceeds do not exceed US$500,000 or the Equivalent Amount in
Canadian Dollars in the aggregate, Agent shall permit the applicable Borrower to
replace, restore, repair or rebuild the property; provided, that if such
Borrower shall not have completed or entered into binding agreements to complete
such replacement, restoration, repair or rebuilding within 180 days of such
casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with SECTION 1.3(d). All insurance proceeds that are to be made
available to any Borrower to replace, repair, restore or rebuild the Collateral
shall be applied by Agent to reduce the outstanding principal balance of the
Revolving Loan of such Borrower (which application shall not result in a
permanent reduction of the Revolving Loan Commitment) and upon such application,
Agent shall establish a Reserve against such Borrower's Borrowing Base in an
amount equal to the amount of such proceeds so applied. To the extent not used
to replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with SECTION 1.3(d).
5.5 Compliance with Laws. Each Credit Party shall comply with all
United States and Canadian federal, provincial, state, local and foreign laws
and regulations applicable to it, including those relating to ERISA, labor laws,
and Environmental Laws and Environmental Permits, except to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.6 Supplemental Disclosure. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of an Event of
Default) or at Credit Parties' election, the Credit Parties shall supplement
each Disclosure Schedule hereto, or any representation herein or in any other
Loan Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided, that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect and shall
comply with the terms of its Licenses, except where such infringement,
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CREDIT AGREEMENT
interference or non-compliance could not reasonably be expected to result in a
Material Adverse Effect.
5.8 Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are necessary to
comply with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate in all material respects; (c) notify Agent promptly after
such Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate that is reasonably likely to result in Environmental Liabilities
in excess of US$500,000 or the Equivalent Amount in Canadian Dollars; and (d)
promptly forward to Agent a copy of any order, notice, request for information
or any communication or report received by such Credit Party in connection with
any such violation or Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of US$500,000 or the Equivalent Amount in
Canadian Dollars in each case whether or not the United States Environmental
Protection Agency or any Governmental Authority has taken or threatened any
action in connection with any such violation, Release or other matter. If Agent
at any time has a reasonable basis to believe that any Credit Party has caused a
violation of any Environmental Laws or Environmental Permits by any Credit Party
or any Environmental Liability arising thereunder, or a Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate,
that, in each case, could reasonably be expected to have a Material Adverse
Effect, then each Credit Party shall, upon Agent's written request (i) cause the
performance of such environmental audits including subsurface sampling of soil
and groundwater, and preparation of such environmental reports, at Borrowers'
expense, as Agent may reasonably request relating to such violation or Release,
which shall be conducted by reputable environmental consulting firms reasonably
acceptable to Agent and shall be in form and substance reasonably acceptable to
Agent ("Environmental Investigation"), or (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such Environmental Investigation. Borrowers shall reimburse Agent for the costs
of such Environmental Investigations conducted by Agent or its representatives.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases. Each Borrower and each Subsidiary Guarantor shall use
commercially reasonable efforts to obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. Each Borrower and each Subsidiary Guarantor
shall timely and fully pay and perform its obligations under all leases and
other agreements with respect to each leased location or public warehouse where
any Collateral is or may be located. To the extent otherwise permitted
hereunder, if any Borrower or Subsidiary Guarantor proposes to acquire a fee
ownership interest in Real Estate after the
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CREDIT AGREEMENT
Closing Date, it shall first provide to Agent a mortgage or deed of trust
granting Agent a first priority Lien on such Real Estate, together with
environmental audits, mortgage title insurance commitment, real property survey,
local counsel opinion(s), and, if required by Agent, supplemental casualty
insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent.
5.10 Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon the reasonable request of Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Agent to carry out more effectively the
provisions and purposes of this Agreement and each Loan Document.
5.11 Canadian Pension and Benefit Plans.
(a) For each existing Canadian Pension Plan of any Credit
Party, each Credit Party shall, and shall cause each of its Subsidiaries to,
ensure that such plan retains its registered status under and is administered in
a timely manner in all material respects in accordance with the applicable
pension plan text, funding agreement, the ITA and all other applicable laws.
(b) For each Canadian Pension Plan hereafter adopted by
any Credit Party that is required to be registered under the ITA or any other
applicable laws, each Credit Party shall, and shall cause each of its
Subsidiaries to, use commercially reasonable efforts to seek and receive
confirmation in writing from the applicable Governmental Authorities to the
effect that such plan is unconditionally registered under the ITA and such other
applicable laws.
(c) For each existing and hereafter adopted Canadian
Pension Plan and Canadian Benefit Plan of any Credit Party, such Credit Party
shall in a timely fashion perform in all material respects all obligations
(including funding, investment and administration obligations) required to be
performed by the terms of such plan and the funding media therefor.
(d) Each Credit Party shall deliver to Agent if requested
by Agent, promptly after the filing thereof by such Credit Party with any
applicable Governmental Authority: (i) copies of each annual and other return,
report or valuation with respect to each Canadian Pension Plan of such Credit
Party; (ii) promptly after receipt thereof, a copy of any direction, order,
notice, ruling or opinion that such Credit Party may receive from any applicable
Governmental Authority with respect to any Canadian Pension Plan of such Credit
Party; and (iii) notification within 30 days of (A) any increases having a cost
to such Credit Party in excess of $50,000 per annum in the benefits of any
existing Canadian Pension Plan or Canadian Benefit Plan, (B) the establishment
of any new Canadian Pension Plan or Canadian Benefit Plan, or (C) the
commencement of contributions to any such plan to which such Credit Party was
not previously contributing.
5.12 Foreign Subsidiaries' Guaranties. As of the Closing Date,
Borrowers are not guaranteeing or providing security for the obligations of US
Borrowers arising under the US Credit Agreement. However, following a change in
the relevant sections of the IRC or the
33
CREDIT AGREEMENT
regulations issued or promulgated thereunder or Canadian law, the Credit Parties
shall, within 15 days of a written request by Agent, retain an independent tax
counsel reasonably satisfactory to the Agent, which counsel shall, within 30
days of its retention, deliver a written opinion addressed to the Credit Parties
as to whether the entering into by any of the foreign Subsidiaries of Details
organized under the laws of Canada (a "Foreign Subsidiary") of a guaranty with
respect to the US Obligations could reasonably be expected to cause at the time
such change in law becomes effective (a) any undistributed earnings of any such
Foreign Subsidiary as determined for federal income tax purposes to be treated
as a deemed dividend to Details or any other Credit Party for federal income tax
purposes or (b) a Material Adverse Effect (either of the events specified in the
foregoing CLAUSE (a) or (b) being referred to herein as a "Negative Effect"),
and if such counsel does not deliver within such 15-day period an opinion that a
Negative Effect would occur in such circumstances, then, each such Foreign
Subsidiary shall execute and deliver to the Agent (i) a guaranty in form and
substance reasonably satisfactory to US Agent guaranteeing the US Obligations;
(ii) a security agreement in form and substance satisfactory to US Agent
granting to US Agent a Lien on all of its assets; and (iii) a pledge agreement
in form and substance satisfactory to US Agent pledging all of the Capital Stock
owned by such Credit Party to US Agent (or the remaining portion of such Stock
not previously pledged to US Agent or Agent), it being understood that no such
guaranty, security agreement or pledge agreement shall be required if such
counsel delivers within such 15-day period an opinion that a Negative Effect
would occur as a result thereof.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) merge or amalgamate with,
consolidate with, acquire all or substantially all of the assets or Stock of, or
otherwise combine with or acquire, any Person (other than the merger,
amalgamation or consolidation of a Borrower with another Borrower, a Subsidiary
Guarantor with another Subsidiary Guarantor, or a Subsidiary Guarantor with a
Borrower, with such Borrower as the surviving entity), or (b) form or acquire
any Subsidiary. Notwithstanding the foregoing, any Credit Party may form a
Subsidiary or otherwise acquire all or substantially all of the assets or Stock
of any Person (the "Target") (in each case, a "Permitted Acquisition") subject
to the satisfaction of each of the following conditions:
(i) Agent shall receive not less than 30 days'
prior written notice of the consummation of each such Permitted Acquisition;
(ii) such Permitted Acquisition shall be
consensual (i.e., it shall not involve a hostile takeover);
(iii) such Permitted Acquisition shall only
involve assets located in the United States or Canada comprising a business, or
those assets of a business, of the type engaged in by Borrowers as of the
Closing Date or reasonably related thereto in Agent's good faith credit
judgment, and which business would not subject Agent or any Lender to regulatory
or third party approvals in connection with the exercise of its rights and
remedies under this Agreement or any
34
CREDIT AGREEMENT
other Loan Documents, other than approvals applicable to the exercise of such
rights and remedies with respect to Borrowers prior to such Permitted
Acquisition;
(iv) each Target shall have become a "Credit
Party" under this Agreement, and shall have executed and delivered to Lender all
documents reasonably requested by Lender in furtherance of the foregoing,
including, (a) with respect to a Target owned by any Parent Guarantor, a
Guaranty in form and substance satisfactory to Agent, and (b) with respect to a
Target organized under the laws of the United States or Canada and owned by any
Borrower or Subsidiary Guarantor, a joinder to the Security Agreement, a joinder
to the Pledge Agreement, and if requested by Agent, a Guaranty in form and
substance satisfactory to Agent;
(v) such Credit Party shall execute and deliver
to Agent such agreements and documents reasonably requested by Agent in order to
grant to the Agent, for the benefit of Agent and Lenders, a perfected first
priority security interest in all of the Stock of the Target;
(vi) the costs, fees or expenses of forming or
acquiring any such new Target shall be provided by a direct or indirect
contribution from any Parent Guarantor; provided, that if after the payment of
such costs, fees or expenses of formation or acquisition, Liquidity exceeds
US$15,000,000, then there shall be no limitation on the source of such costs,
fees or expenses with respect to Targets who become "Borrowers," "US Borrowers"
or "Subsidiary Guarantors"; provided, that, except as otherwise set forth in
SECTION 6.17, in no event will Borrowers and US Borrowers contribute more than
US$5,000,000 in the aggregate in any Fiscal Year for such costs, fees or
expenses;
(vii) no additional Indebtedness, Guaranteed
Indebtedness, contingent obligations or other liabilities shall be incurred,
assumed, or otherwise reflected on the consolidated balance sheet of Borrowers
and their Subsidiaries after giving affect to the Permitted Acquisition, except
(A) Loans made hereunder and (B) ordinary course trade payables, accrued
expenses and unsecured Indebtedness and contingent obligations of the Target to
the extent no Default or Event of Default would result after giving effect to
such Permitted Acquisition;
(viii) the business and assets of each Target shall
be free and clear of all Liens (other than the first priority Lien of Agent and
Permitted Encumbrances);
(ix) at or prior to the consummation of the
Permitted Acquisition, Lender shall have received from Borrowers a written
supplement to DISCLOSURE SCHEDULE (3.8) and to any other Schedule to the Loan
Agreement, in each case to the extent necessary to correct any information in
such Schedule after giving effect to the Permitted Acquisition;
(x) Concurrently with delivery of the notice
referred to in CLAUSE (i) above, Credit Parties shall have delivered to Agent,
in form and substance reasonably satisfactory to Agent:
(A) a pro forma consolidated balance
sheet, income statement and cash flow statement of Parent and its
Subsidiaries (other than DDi Europe Limited and each of its
Subsidiaries) (the "Acquisition Pro Forma"),
35
CREDIT AGREEMENT
based on recent financial statements, which shall be complete and shall
fairly present in all material respects the assets, liabilities,
financial condition and results of operations of Parent and such
Subsidiaries in accordance with GAAP consistently applied, but taking
into account such Permitted Acquisition and the funding of all Loans in
connection therewith, and such Acquisition Pro Forma shall reflect that
(y) average Liquidity of Borrowers and US Borrowers in the aggregate
for the 90-day period preceding the consummation of such Permitted
Acquisition would have exceeded US$15,000,000 on a pro forma basis
(after giving effect to such Permitted Acquisition and all Loans funded
in connection therewith as if made on the first day of such period) and
the Acquisition Projections (as hereinafter defined) shall reflect that
such Liquidity of US$15,000,000 shall continue for at least 90 days
after the consummation of such Permitted Acquisition, and (z) on a pro
forma basis, no Event of Default has occurred and is continuing or
would result after giving effect to such Permitted Acquisition and
Borrowers would have been in compliance with the financial covenants
set forth in ANNEX G for the four quarter period (or such shorter
period, as appropriate, as is tested during the first 12 months
following the Closing Date) reflected in the Compliance Certificate
most recently delivered to Agent pursuant to ANNEX E prior to the
consummation of such Permitted Acquisition (after giving effect to such
Permitted Acquisition and all Loans funded in connection therewith as
if made on the first day of such period);
(B) updated versions of the most
recently delivered Projections covering the one-year period commencing
on the date of such Permitted Acquisition and otherwise prepared in
accordance with the Projections (the "Acquisition Projections") and
based upon historical financial data of a recent date reasonably
satisfactory to Agent, taking into account such Permitted Acquisition;
and
(C) a certificate of the chief
financial officer of Parent to the effect that: (w) Credit Parties
taken as a whole (after taking into consideration all rights of
contribution and indemnity Credit Parties have against each other) will
be Solvent upon the consummation of the Permitted Acquisition; (x) the
Acquisition Pro Forma fairly presents the financial condition of Parent
and its Subsidiaries (other than DDi Europe Limited and each of its
Subsidiaries) (on a consolidated basis) as of the date thereof after
giving effect to the Permitted Acquisition; (y) the Acquisition
Projections are reasonable estimates of the future financial
performance of Parent and its Subsidiaries (other than DDi Europe
Limited and each of its Subsidiaries) (on a consolidated basis)
subsequent to the date thereof based upon the historical performance of
Credit Parties and the Target and show that Borrowers shall continue to
be in compliance with the financial covenants set forth in ANNEX G for
the one-year period thereafter, it being understood that uncertainty is
inherent in any forecasts or projections and that no assurance can be
given that the results set forth in the Projections will actually be
obtained; and (z) Credit Parties have completed their due diligence
investigation with respect to the Target and such Permitted
Acquisition, which investigation was conducted in a manner similar to
that which would have been
36
CREDIT AGREEMENT
conducted by a prudent purchaser of a comparable business and the
results of which investigation were delivered to Agent and Lenders;
(xi) on or prior to the date of such Permitted
Acquisition, Agent shall have received, in form and substance reasonably
satisfactory to Agent, copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates, lien search results
and other documents reasonably requested by Agent; and
(xii) at the time of such Permitted Acquisition
and after giving effect thereto, no Event of Default has occurred and is
continuing.
Notwithstanding the foregoing, the Accounts of the Target shall not be included
in Eligible Accounts without the prior written consent of Agent and Requisite
Revolving Lenders.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this SECTION 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that: (a) each Credit Party may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to such Credit Party pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
consistent with past priorities; (b) except as otherwise expressly set forth in
SECTION 6.17, each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date, and make additional investments in its
Subsidiaries in an aggregate amount for all Credit Parties not to exceed
US$750,000 or the Equivalent Amount in Canadian Dollars in any Fiscal Year; and
(c) so long as no Event of Default has not occurred and there is no outstanding
Revolving Loan balance, Borrowers and US Borrowers may make investments, subject
to Control Letters in favor of Agent for the benefit of Lenders or otherwise
subject to a perfected security interest in favor of Agent for the benefit of
Lenders, in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing within
one year from the date of acquisition thereof, (ii) commercial paper maturing no
more than one year from the date of creation thereof and currently having the
highest rating obtainable from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc., (iii) certificates of deposit, bankers acceptances or
repurchase agreements maturing no more than one year from the date of creation
thereof issued by commercial banks incorporated under the laws of the United
States of America, each having combined capital, surplus and undivided profits
of not less than US$300,000,000 and having a senior unsecured rating of "A" or
better by a nationally recognized rating agency (an "A Rated Bank"), (iv) time
deposits maturing no more than thirty (30) days from the date of creation
thereof with A Rated Banks and (v) mutual funds that invest solely in one or
more of the investments described in CLAUSES (i) through (iv) (the items in
CLAUSES (i) through (v) above being collectively referred to as "Permitted
Investments").
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit
to exist any Indebtedness, except (without duplication):
37
CREDIT AGREEMENT
(i) Indebtedness secured by purchase money
security interests and Capital Leases permitted in CLAUSE (k) of the definition
of "Permitted Encumbrances" set forth in ANNEX A;
(ii) (A) the Loans and the other Obligations, and
(B) the US Loans and the other US Obligations;
(iii) unfunded pension fund and other employee
benefit plan obligations and liabilities to the extent they are permitted to
remain unfunded under applicable law;
(iv) existing Indebtedness described in
DISCLOSURE SCHEDULE (6.3) and refinancings thereof or amendments or
modifications thereto that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and that are otherwise on financial terms and conditions no less favorable
to any Credit Party, Agent or any Lender, as determined by Agent, than the terms
of the Indebtedness being refinanced, amended or modified;
(v) Indebtedness consisting of intercompany
loans and advances made by any Borrower to any other Borrower; provided, that:
(A) each Borrower shall have executed and delivered to each other Borrower, on
the Closing Date, a demand note (collectively, the "Intercompany Notes") to
evidence any such intercompany Indebtedness owing at any time by such Borrower
to such other Borrower, which Intercompany Notes shall be in form and substance
reasonably satisfactory to Agent and shall be pledged and delivered to Agent
pursuant to the Pledge Agreement as additional collateral security for the
Obligations; (B) each Borrower shall record all intercompany transactions on its
books and records in a manner reasonably satisfactory to Agent; (C) the
obligations of each Borrower under any such Intercompany Notes shall be
subordinated to the Obligations of such Borrower hereunder in a manner
reasonably satisfactory to Agent; and (D) at the time any such intercompany loan
or advance is made by any Borrower to any other Borrower and after giving effect
thereto, each such Borrower shall be Solvent;
(vi) Indebtedness consisting of intercompany
loans and advances made by any Borrower to any Subsidiary Guarantor; provided,
that: (A) each Subsidiary Guarantor shall have executed and delivered to each
Borrower, on the Closing Date, an Intercompany Note to evidence any such
intercompany Indebtedness owing at any time by such Subsidiary Guarantor to such
Borrower, which Intercompany Notes shall be in form and substance reasonably
satisfactory to Agent and shall be pledged and delivered to Agent pursuant to
the Pledge Agreement as additional collateral security for the Obligations; (B)
each Borrower shall record all intercompany transactions on its books and
records in a manner reasonably satisfactory to Agent; (C) the obligations of
each Subsidiary Guarantor under any such Intercompany Notes shall be
subordinated to the Obligations of the applicable Borrower hereunder in a manner
reasonably satisfactory to Agent; (D) at the time any such intercompany loan or
advance is made by any Borrower to any Subsidiary Guarantor and after giving
effect thereto, each such Borrower shall be Solvent; (E) no Event of Default
would occur and be continuing after giving effect to any such proposed
intercompany loan;
38
CREDIT AGREEMENT
(vii) Indebtedness consisting of loans by Borrower
or any Guarantor to a wholly-owned foreign Subsidiary (that is a Credit Party)
in an aggregate amount not to exceed US$50,000 or the Equivalent Amount in
Canadian Dollars in any Fiscal Year;
(viii) Indebtedness arising under performance,
surety, appeal and other bonds disclosed in DISCLOSURE SCHEDULE (3.22);
(ix) Indebtedness owing to insurance companies in
the ordinary course of business to finance such Credit Party's annual insurance
premiums;
(x) contingent liabilities arising out of the
endorsements of checks and other negotiable instruments for deposit or
collection in the ordinary course of business and netting and overdraft
protections;
(xi) Indebtedness of a Target which became a
Credit Party after the Closing Date to the extent permitted under SECTION 6.1;
(xii) Indebtedness of DDi Capital Corp. arising
under the Senior Accreting Notes;
(xiii) unsecured Indebtedness arising out of
interest rate and foreign currency hedging agreements entered into with
financial institutions in the ordinary course of business in an aggregate
outstanding notional amount not to exceed US$5,000,000 or the Equivalent Amount
in Canadian Dollars at any time;
(xiv) other unsecured Indebtedness in an aggregate
amount not to exceed US$750,000 or the Equivalent Amount in Canadian Dollars in
any Fiscal Year;
(xv) intercompany Indebtedness of Borrowers (or
any of them) in favor of one or more Credit Parties organized in the United
States in an aggregate outstanding principal amount not to exceed US$10,000,000
or the Equivalent Amount in Canadian Dollars at any time; and
(xvi) Indebtedness permitted under SECTION 6.3 of
the US Credit Agreement.
(b) No Credit Party shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness prior to
its scheduled maturity, other than (i) the Obligations and the US Obligations;
(ii) Indebtedness secured by a Permitted Encumbrance if the asset securing such
Indebtedness has been sold or otherwise disposed of in accordance with SECTIONS
6.8(b) or (c); (iii) Indebtedness permitted by SECTION 6.3(a)(iv) upon any
refinancing thereof in accordance with SECTION 6.3(a)(iv); and (iv) other
Indebtedness not in excess of US$500,000 or the Equivalent Amount in Canadian
Dollars.
6.4 Employee Loans and Affiliate Transactions.
39
CREDIT AGREEMENT
(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. All such
transactions with Affiliates (other than Credit Parties) existing as of the
Closing Date hereof are described in DISCLOSURE SCHEDULE (6.4(a)).
(b) No Credit Party shall enter into any lending or
borrowing transaction with any employees of any Credit Party, except loans to
its respective employees on an arm's-length basis in the ordinary course of
business consistent with past practices for travel and entertainment expenses,
relocation costs and similar purposes up to a maximum of US$200,000 or the
Equivalent Amount in Canadian Dollars in the aggregate at any one time
outstanding.
6.5 Capital Structure and Business. If all or part of a Credit
Party's Stock is pledged to Agent, that Credit Party shall not issue additional
Stock. No Credit Party shall amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it or businesses reasonably related
thereto as determined in Agent's reasonable credit judgment.
6.6 Guaranteed Indebtedness. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by this
Agreement or the US Credit Agreement.
6.7 Liens. No Credit Party shall create, incur, assume or permit
to exist any Lien on or with respect to its Accounts or any of its other
properties or assets (whether now owned or hereafter acquired) except for
Permitted Encumbrances. In addition, no Credit Party shall become a party to any
agreement, note, indenture or instrument, or take any other action, that would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of its Accounts, other than: (a) the sale
of Inventory in the ordinary course of business, (b) the sale or other
disposition by a Credit Party of Equipment, Fixtures or Real Estate that are
obsolete or no longer used or useful in such Credit Party's business and having
a book value, not exceeding US$500,000 or the Equivalent Amount in Canadian
Dollars in the aggregate in any Fiscal Year; (c) the sale or other disposition
of other property or assets having a book value not exceeding US$300,000 or the
Equivalent Amount in Canadian Dollars in the aggregate in any Fiscal Year; (d)
the license of Intellectual Property or lease of Equipment to third parties in
the ordinary course of business, so long as such license or lease, as the case
may be, does not prohibit the granting of a Lien in favor of the Agent in the
Intellectual Property which is the subject of such license; and (e) the
40
CREDIT AGREEMENT
disposition of Stock and assets to the extent permitted under SECTION 6.1(a);
and (f) the sale or liquidation of Permitted Investments in the ordinary course
of business. Upon the sale or other disposition of any asset permitted under
this SECTION 6.8 and the receipt by Borrower of the proceeds thereof, Agent
shall deliver to Borrowers termination statements, releases or such other
documents as may be reasonably requested by Borrowers to evidence the release of
Agent's Lien thereon.
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur (a) an event that could reasonably
be expected to result in the imposition of a Lien under Section 412 of the IRC
or Section 302 or 4068 of ERISA or (b) an ERISA Event to the extent such ERISA
Event would reasonably be expected to result in taxes, penalties and other
liabilities in an aggregate amount that could reasonably be expected to have a
Material Adverse Effect.
6.10 Financial Covenants. Borrowers shall not breach or fail to
comply with any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, except, in
each case, as could not reasonably be expected to have a Material Adverse
Effect.
6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets having a fair market value in excess of US$1,000,000 or the Equivalent
Amount in Canadian Dollars in the aggregate in any Fiscal Year.
6.13 Restricted Payments. No Credit Party shall make any Restricted
Payment, except:
(a) intercompany loans and advances between Credit
Parties to the extent permitted under SECTION 6.3;
(b) dividends and distributions (i) by Subsidiaries of
any Borrower paid to such Borrower, or (ii) by Parent paid in the form of
capital Stock;
(c) employee loans permitted under SECTION 6.4(b);
(d) payments of principal and interest of Intercompany
Notes issued in accordance with SECTION 6.3;
(e) except as otherwise expressly set forth in SECTION
6.17(e):
(i) beginning after the one year anniversary of
the Closing Date, so long as (i) no Default or Event of Default has occurred and
is continuing or would result from any such proposed payment, (ii) Borrowers and
US Borrowers have aggregate Liquidity of at least US$15,000,000 (on a pro forma
basis, with trade payables being paid currently, and
41
CREDIT AGREEMENT
expenses and liabilities being paid in the ordinary course of business, and
without acceleration of sales) after giving effect to any such proposed payment,
and (iii) Details and its Subsidiaries have a Fixed Charge Coverage Ratio (as
certified by Details' chief financial officer) for the 12-month period ending at
the end of the Fiscal Quarter ending immediately preceding the date such payment
is proposed to be made of at least 1.5:1.0 after giving effect to such proposed
payment as if it had been made during such Fiscal Quarter, then Borrowers and US
Borrowers may make distributions to Parent in order for Parent to make payments
of dividends on the Series B Preferred Stock in an aggregate amount not to
exceed the accrued amounts due on the Series B Preferred Stock during any Fiscal
Quarter pursuant to Section 1 of the Series B Certificate of Designation, and
(ii) Parent may make payments of dividends on the
Series B Preferred Stock in an aggregate amount not to exceed the accrued
amounts due on the Series B Preferred Stock during any Fiscal Quarter pursuant
to Section 1of the Series B Certificate of Designation;
(f) (i) except as otherwise expressly set forth in
SECTION 6.17(c) so long as (i) no Default or Event of Default has occurred and
is continuing or would result from any such proposed payment, (ii) Borrowers and
US Borrowers have aggregate Liquidity of at least US$15,000,000 (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities
being paid in the ordinary course of business, and without acceleration of
sales) after giving effect to any such proposed payment, and (iii) Details and
its Subsidiaries have a Fixed Charge Coverage Ratio (as certified by Details'
chief financial officer) for the 12-month period (or such shorter period, as
appropriate, as is tested during the first 12 months following the Closing Date)
ending at the end of the Fiscal Quarter ending immediately preceding the date
such payment is proposed to be made of at least 1.5:1.0 after giving effect to
such proposed payment as if it had been made during such Fiscal Quarter, then
Borrowers and US Borrowers may make distributions to DDi Capital Corp. in order
for DDi Capital Corp. to make, and DDi Capital Corp. may make, payments of
interest on the Senior Accreting Notes in an aggregate amount not to exceed
US$660,000 in any Fiscal Quarter;
(ii) so long as (i) no Default or Event of
Default has occurred and is continuing or would result from any such proposed
payment, and (ii) Borrowers and US Borrowers have aggregate Liquidity of at
least US$15,000,000 (on a pro forma basis, with trade payables being paid
currently, and expenses and liabilities being paid in the ordinary course of
business, and without acceleration of sales) after giving effect to any such
proposed payment, then Borrowers may make distributions to DDi Capital Corp. in
order for DDi Capital Corp. to make, and DDi Capital Corp. may make, the Senior
Accreting Notes Interest Payment;
(g) Parent may declare and pay dividends with respect to
(i) its capital stock payable solely in additional shares of its capital stock,
and (ii) its Series A Preferred Stock payable solely from the proceeds of (A)
dividends and distributions received from its Subsidiary, DDi Europe Limited,
and (B) any disposition of the capital Stock of DDi Europe Limited;
(h) except as otherwise expressly set forth in SECTION
6.17(d), Parent may purchase, redeem or otherwise acquire any Series B Preferred
Stock (together with accrued and unpaid dividends thereon) pursuant to Sections
5A (mandatory redemptions), 5B (optional
42
CREDIT AGREEMENT
redemption of holder), and 5D (redemption upon a change of control) of the
Series B Preferred Certificate of Designation;
(i) so long as (i) no Default or Event of Default has
occurred and is continuing or would result from any such proposed payment, (ii)
Borrowers and US Borrowers have aggregate Liquidity of at least US$15,000,000
(on a pro forma basis, with trade payables being paid currently, and expenses
and liabilities being paid in the ordinary course of business, and without
acceleration of sales) after giving effect to any such proposed payment, and
(iii) Details and its Subsidiaries have a Fixed Charge Coverage Ratio (as
certified by Details' chief financial officer) for the 12-month period ending at
the end of the Fiscal Quarter ending immediately preceding the date such payment
is proposed to be made of at least 1.50:1.0 after giving effect to such proposed
payment as if it had been made during such Fiscal Quarter, then Borrower
Representative may advance monies to Parent for the purpose of making the
Restricted Payment permitted in SECTION 6.13(h);
(j) so long as no Event of Default has occurred and is
continuing, any Credit Party organized outside of the United States may make
quarterly distributions in the amount necessary for any United States
Shareholder (as defined in Section 951(b) of the IRC) to pay any United States
tax on any amounts included under Section 951 of the IRC, after taking into
account any available foreign tax credits; and
(k) payments to any other Credit Party for directors'
fees and the reimbursement of legal and accounting expenses incurred in the
ordinary course of business in an aggregate amount not to exceed US$500,000 or
the Equivalent Amount in Canadian Dollars in any Fiscal Year.
6.14 Change of Corporate Name; State of Organization, Location or
Fiscal Year. No Borrower shall (a) change its name as it appears in official
filings in the jurisdiction of its incorporation or other organization, (b)
change its chief executive office, principal place of business, domicile (within
the meaning of the Quebec Civil Code), corporate offices or warehouses or
locations at which Collateral is held or stored, or the location of its records
concerning the Collateral, (c) change the type of entity that it is, (d) change
its organization identification number, if any, issued by its jurisdiction of
incorporation or other organization, or (e) change its jurisdiction of
incorporation or organization or incorporate or organize in any additional
jurisdictions, in each case without at least 30 days prior written notice to
Agent and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the perfection
of any Liens in favor of Agent, on behalf of Lenders, in any Collateral, has
been completed or taken, and provided that any such new location shall be in
Canada. Without limiting the generality of the foregoing, no Credit Party shall
change its name, identity or corporate structure in any manner that might make
any financing statement or financing change statement filed in connection with
this Agreement or the other Loan Documents materially misleading within the
meaning of the PPSA except upon prior written notice to Agent and after the
earlier of (i) Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the perfection
of any Liens in favor of Agent in any Collateral, has been completed or taken
and (ii) 30 days after the receipt by Agent of such written notice from
Borrowers. No Credit Party shall change its Fiscal Year.
43
CREDIT AGREEMENT
6.15 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of any Borrower
to any Borrower or between Borrowers.
6.16 Restrictions Affecting Senior Accreting Notes. Notwithstanding
any encumbrance or restriction set forth in SECTION 6.2, 6.3, 6.4, or 6.13
relating to DDi Capital Corp. and its Subsidiaries, to the extent (and only to
the extent) any such encumbrance or restriction would violate Section 1010 of
the Senior Accreting Note Indenture dated as of December 12, 2003, then such
encumbrance or restriction shall not apply.
6.17 Use of Proceeds from Parent Stock Issuance. With respect to
any cash proceeds received by Parent from the sale of any of its Stock ("Equity
Proceeds"):
(a) notwithstanding the provisions of SECTION 6.1(vi),
Parent may contribute any or all of the Equity Proceeds for the costs, fees,
expenses and other charges or uses associated with forming or acquiring any
Target;
(b) notwithstanding the provisions of SECTION 6.2, Parent
may use any or all of the Equity Proceeds to make an investment in, or make,
accrue or permit to exist loans or advances of money to, any Subsidiary, through
the direct or indirect lending of money, holding of securities or otherwise;
(c) notwithstanding the provisions of SECTION 6.13(f)(i),
Parent and DDi Capital Corp. may use any or all of the Equity Proceeds to
purchase, redeem or otherwise acquire any Senior Accreting Notes, or to make any
interest payment with respect to the Senior Accreting Notes;
(d) notwithstanding the provisions of SECTION 6
(including SECTION 6.13(h)), Parent may use any or all of the Equity Proceeds to
purchase, redeem or otherwise acquire any Series A Preferred Stock or Series B
Preferred Stock;
(e) notwithstanding the provisions of SECTION 6.13(e),
Parent may use any or all of the Equity Proceeds to make payments of dividends
on the Series B Preferred Stock; and
(f) Parent may use any or all of the Equity Proceeds for
any Capital Expenditures and the aggregate amount of such Capital Expenditures
shall not be included for purposes of determining the maximum aggregate Capital
Expenditures permitted in any period set forth in PARAGRAPH (a) of ANNEX G.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Loans and all
other Obligations shall be automatically due and payable in full on such date.
44
CREDIT AGREEMENT
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents
(including the immediately succeeding sentence), no termination or cancellation
of any financing arrangement under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of the Credit Parties or the
rights of Agent and Lenders relating to any unpaid portion of the Loans or any
other Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of SECTION 11, the payment obligations under SECTIONS 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Any Borrower (i) fails to make any payment of
principal of, or interest on, or Fees owing in respect of, the Loans or any of
the other Obligations when due and payable, or (ii) fails to pay or reimburse
Agent or Lenders for any expense reimbursable hereunder or under any other Loan
Document within 10 days following Agent's demand for such reimbursement or
payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep
or observe any of the provisions of SECTIONS 1.4, 1.8, 5.4(a) or 6 (other than
SECTION 6.11), or any of the provisions set forth in ANNEXES C or G,
respectively.
(c) Any Borrower fails or neglects to perform, keep or
observe (i) any of the provisions of SECTION 4.1(a) or any provisions set forth
in ANNEX E, and the same shall remain unremedied for five Business Days or more,
or (ii) any of the provisions of SECTION 4.1(b) or any provisions set forth in
ANNEX F, and the same shall remain unremedied for three Business Days or more.
(d) Any Credit Party fails or neglects to perform, keep
or observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this SECTION 8.1) and the same shall remain unremedied for 30 days or more.
(e) A default or breach occurs under any other agreement,
document or instrument to which any Credit Party is a party that is not cured
within any applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any Indebtedness
or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of US$750,000 or the Equivalent Amount in Canadian Dollars in the
aggregate (including (x) undrawn committed or available amounts and (y) amounts
owing to all
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CREDIT AGREEMENT
creditors under any combined or syndicated credit arrangements), or (ii) causes,
or permits any holder of such Indebtedness or Guaranteed Indebtedness or a
trustee to cause, Indebtedness or Guaranteed Indebtedness or a portion thereof
in excess of US$750,000 or the Equivalent Amount in Canadian Dollars in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default is waived, or such
right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect (other than (i) inadvertent,
immaterial errors not exceeding US$100,000 or the Equivalent Amount in Canadian
Dollars in the aggregate in any Borrowing Base Certificate), (ii) errors
understating the Borrowing Base and (iii) errors occurring when Borrowing
Availability continues to exceed US$5,000,000 or the Equivalent Amount in
Canadian Dollars after giving effect to the correction of such errors), or any
representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate) made or delivered to Agent or any Lender by any Credit Party
is untrue or incorrect in any material respect as of the date when made or
deemed made.
(g) Assets of any Credit Party with a fair market value
of US$500,000 or the Equivalent Amount in Canadian Dollars or more are attached,
seized, levied upon or subjected to a writ or distress warrant, or come within
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors of any Credit Party and such condition continues for 30 days or
more.
(h) A case or proceeding is commenced against any Credit
Party seeking a decree or order in respect of such Credit Party (i) under any
Insolvency Law (ii) appointing a custodian, receiver, interim receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Credit Party or for any substantial part of any such Credit Party's assets, or
(iii) ordering the winding-up or liquidation of the affairs of such Credit
Party, and such case or proceeding shall remain undismissed or unstayed for 60
days or more or a decree or order granting the relief sought in such case or
proceeding is granted by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief
under any Insolvency Law, (ii) consents to or fails to contest in a timely and
appropriate manner to the institution of proceedings thereunder or to the filing
of any such petition or to the appointment of or taking possession by a
custodian, receiver, interim receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for such Credit Party or for any substantial
part of any such Credit Party's assets, (iii) makes an assignment for the
benefit of creditors, (iv) takes any action in furtherance of any of the
foregoing, or (v) admits in writing its inability to, or is generally unable to,
pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of
money in excess of US$500,000 or the Equivalent Amount in Canadian Dollars in
the aggregate at any time are outstanding against one or more of the Credit
Parties (which judgments are not covered by insurance policies as to which
liability has been accepted by the insurance carrier), and the same
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CREDIT AGREEMENT
are not, within 30 days after the entry thereof, discharged or execution thereof
stayed or bonded pending appeal, or such judgments are not discharged prior to
the expiration of any such stay.
(k) Any material provision of any Loan Document for any
reason ceases to be valid, binding and enforceable in accordance with its terms
(or any Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any "Event of Default" occurs under and as defined in
the US Credit Agreement.
8.2 Remedies.
(a) If any Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Revolving
Lenders shall), without notice, suspend the Revolving Loan facility with respect
to additional Advances or the incurrence of additional Letter of Credit
Obligations, whereupon any additional Advances and additional Letter of Credit
Obligations shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Revolving Lenders, if such suspension occurred at
their direction) so long as such Default or Event of Default is continuing. If
any Event of Default has occurred and is continuing, Agent may (and at the
written request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the Loans
and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice: (i) terminate the Revolving Loan facility with respect
to further Advances or the incurrence of further Letter of Credit Obligations;
(ii) reduce the Revolving Loan Commitment from time to time; (iii) declare all
or any portion of the Obligations, including all or any portion of any Loan to
be forthwith due and payable, and require that the Letter of Credit Obligations
be cash collateralized in the manner set forth in ANNEX B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrowers and each other Credit Party; or (iv) exercise any
rights and remedies provided to Agent under the Loan Documents or at law or
equity, including all remedies provided under the PPSA; provided, that upon the
occurrence of an Event of Default specified in SECTIONS 8.1(h) or (i), the
Commitments shall be immediately terminated and all of the Obligations,
including the Revolving Loan, shall become immediately due and payable without
declaration, notice or demand by any Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in
this Agreement or by applicable law, each Credit Party waives (including for
purposes of SECTION 12): (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to
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CREDIT AGREEMENT
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way be
liable, and hereby ratifies and confirms whatever Agent may do in this regard,
(b) all rights to notice and a hearing prior to Agent's taking possession or
control of, or to Agent's replevy, attachment or levy upon, the Collateral or
any bond or security that might be required by any court prior to allowing Agent
to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Subject to the terms of this SECTION 9.1, any Lender
may make an assignment to a Qualified Assignee of, or sell participations in, at
any time or times, the Loan Documents, Loans, Letter of Credit Obligations and
any Commitment or any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder. Any
assignment by a Lender shall: (i) require the consent of Agent (which consent
shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee) and the execution of an assignment agreement (an "Assignment
Agreement") substantially in the form attached hereto as EXHIBIT 9.1(a) and
otherwise in form and substance reasonably satisfactory to, and acknowledged by,
Agent; (ii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) after giving effect to any such partial assignment,
the assignee Lender shall have Commitments in an amount at least equal to
US$5,000,000 and the assigning Lender shall have retained Commitments in an
amount at least equal to US$5,000,000; (iv) include a payment to Agent of an
assignment fee of US$3,500 and (v) so long as no Event of Default has occurred
and is continuing, require the consent of Borrower Representative, which shall
not be unreasonably withheld or delayed; provided, that (i) no such consent
shall be required for an assignment to a Qualified Assignee, and (ii) so long as
no Event of Default has occurred and is continuing, no such assignment shall be
made, to the knowledge of an assigning Lender, to a direct competitor of
Borrowers. In the case of an assignment by a Lender under this SECTION 9.1, the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment shall give rise to a
direct obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender." In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Agent or such Lender, execute new Notes in exchange for the Notes, if
any, being assigned. Notwithstanding the foregoing provisions of this SECTION
9.1(a), any Lender may at any time pledge the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement and the
48
CREDIT AGREEMENT
other Loan Documents to another investment fund managed by the same investment
advisor; provided, that no such pledge to a Federal Reserve Bank shall release
such Lender from such Lender's obligations hereunder or under any other Loan
Document.
(b) Any participation by a Lender of all or any part of
its Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of SECTIONS 1.13,
1.15, 1.16 and 9.8, each Borrower acknowledges and agrees that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender." Except as set forth in the
preceding sentence no Borrower or other Credit Party shall have any obligation
or duty to any participant. Neither Agent nor any Lender (other than the Lender
selling a participation) shall have any duty to any participant and may continue
to deal solely with the Lender selling a participation as if no such sale had
occurred.
(c) Except as expressly provided in this SECTION 9.1, no
Lender shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall
assist any Lender permitted to sell assignments or participations under this
SECTION 9.1 as reasonably required to enable the assigning or selling Lender to
effect any such assignment or participation, including the execution and
delivery of any and all agreements, notes and other documents and instruments as
shall be requested and, if requested by Agent, the preparation of informational
materials for, and the participation of management in meetings with, potential
assignees or participants. Each Credit Party executing this Agreement shall
certify the correctness, completeness and accuracy of all descriptions of the
Credit Parties and their respective affairs contained in any selling materials
provided by them and all other information provided by them and included in such
materials, except that any Projections delivered by Borrowers shall only be
certified by Borrowers as having been prepared by Borrowers in compliance with
the representations contained in SECTION 3.4(c).
(e) Any Lender may furnish any information concerning
Credit Parties in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants); provided
that such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in SECTION 11.8.
(f) So long as no Event of Default has occurred and is
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or
49
CREDIT AGREEMENT
participant would be subject to capital adequacy or similar requirements under
SECTION 1.16(a), increased costs under SECTION 1.16(b), an inability to fund
LIBOR Loans under SECTION 1.16(c), or withholding taxes in accordance with
SECTION 1.15(a).
9.2 Appointment of Agent. GE Capital Canada is hereby appointed to
act on behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this SECTION 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Except as expressly set forth in this Agreement and the
other Loan Documents, Agent shall not have any duty to disclose, and shall not
be liable for failure to disclose, any information relating to any Credit Party
or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital Canada or any of its Affiliates in any
capacity. Neither Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders, Requisite
Revolving Lenders, Supermajority Revolving Lenders or all affected Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then Agent shall be entitled to refrain
from such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders, Requisite Revolving Lenders, Supermajority
Revolving Lenders, or all affected Lenders, as the case may be, and Agent shall
not incur liability to any Person by reason of so refraining. Agent shall be
fully justified in failing or refusing to take any action hereunder or under any
other Loan Document (a) if such action would, in the opinion of Agent, be
contrary to law or the terms of this Agreement or any other Loan Document, (b)
if such action would, in the opinion of Agent, expose Agent to Environmental
Liabilities or (c) if Agent shall not first be indemnified to its satisfaction
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Without limiting the foregoing,
no Lender shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of Requisite Lenders, Requisite
Revolving Lenders, Supermajority Revolving Lenders or all affected Lenders, as
applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of
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CREDIT AGREEMENT
any Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form reasonably
satisfactory to Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.4 GE Capital Canada and Affiliates. With respect to its
Commitments hereunder, GE Capital Canada shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include GE Capital Canada
in its individual capacity. GE Capital Canada and its Affiliates may lend money
to, invest in, and generally engage in any kind of business with, any Credit
Party, any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital
Canada were not Agent and without any duty to account therefor to Lenders. GE
Capital Canada and its Affiliates may accept fees and other consideration from
any Credit Party for services in connection with this Agreement or otherwise
without having to account for the same to Lenders. Each Lender acknowledges the
potential conflict of interest between GE Capital Canada as a Lender holding
disproportionate interests in the Loans and GE Capital Canada as Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in SECTION 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon 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 decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Credit Parties hereunder), ratably according to their respective Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
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CREDIT AGREEMENT
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by Agent in
connection therewith; provided, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including reasonable counsel fees) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not
less than 30 days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the resigning Agent's giving notice of resignation, then
the resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of Canada or any province thereof or the
United States of America or of any State thereof and has a combined capital and
surplus of at least US$300,000,000 or the Equivalent Amount in Canadian Dollars.
If no successor Agent has been appointed pursuant to the foregoing, within 30
days after the date such notice of resignation was given by the resigning Agent,
such resignation shall become effective and the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrower Representative, such approval not to be unreasonably withheld or
delayed; provided, that such approval shall not be required if a Default or an
Event of Default has occurred and is continuing. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the earlier of the acceptance of any appointment as
Agent hereunder by a successor Agent or the effective date of the resigning
Agent's resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this SECTION 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was acting as Agent under this Agreement and the other
Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default and subject to SECTION 9.9(f), each Lender is hereby authorized at any
time or from time to time, without prior notice to any Credit Party or to any
Person other than Agent, any such notice being hereby expressly waived, to
offset and to appropriate and to apply any and all balances held by it at any of
its offices for the account of any Borrower or Guarantor (regardless of whether
such balances are then due to
52
CREDIT AGREEMENT
such Borrower or Guarantor) and any other properties or assets at any time held
or owing by that Lender or that holder to or for the credit or for the account
of any Borrower or Guarantor against and on account of any of the Obligations
that are not paid when due; provided that the Lender exercising such offset
rights shall give notice thereof to the affected Credit Party promptly after
exercising such rights. Any Lender exercising a right of setoff or otherwise
receiving any payment on account of the Obligations in excess of its Pro Rata
Share thereof shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata Share
of the Obligations as would be necessary to cause such Lender to share the
amount so offset or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares, (other than offset rights
exercised by any Lender with respect to SECTIONS 1.13, 1.15 or 1.16). Each
Lender's obligation under this SECTION 9.8 shall be in addition to and not in
limitation of its obligations to purchase a participation in an amount equal to
its Pro Rata Share of the Swing Line Loans under SECTION 1.1. Each Credit Party
that is a Borrower or a Guarantor agrees, to the fullest extent permitted by
law, that (a) any Lender may exercise its right to offset with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such amounts so offset to other Lenders and holders and (b)
any Lender so purchasing a participation in the Loans made or other Obligations
held by other Lenders or holders may exercise all rights of offset, bankers'
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the offset amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or
participate in the Swing Line Loan in accordance with CLAUSES (iii) and (iv) of
SECTION 1.1(b). If the Swing Line Lender declines to make a Swing Line Loan or
if Swing Line Availability is zero, Agent shall notify Revolving Lenders,
promptly after receipt of a Notice of Revolving Credit Advance and in any event
prior to 1:00 p.m. (Toronto time) on the date such Notice of Revolving Advance
is received, by telecopy, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in ANNEX H not later than 3:00 p.m. (Toronto
time) on the requested funding date, in the case of an Index Rate Loan and not
later than 11:00 a.m. (Toronto time) on the requested funding date in the case
of a LIBOR Loan. After receipt of such wire transfers (or, in the Agent's sole
discretion, before receipt of such wire transfers), subject to the terms hereof,
Agent shall make the requested Revolving Credit Advance to the Borrower
designated by Borrower Representative in the Notice of Revolving Credit Advance.
All payments by each Revolving Lender shall be made without setoff, counterclaim
or deduction of any kind.
(ii) Not less than once during each calendar week
or more frequently at Agent's election (each, a "Settlement Date"), Agent shall
advise each Lender by telephone, or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for
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CREDIT AGREEMENT
the benefit of Lenders with respect to each applicable Loan. Provided that each
Lender has funded all payments or Advances required to be made by it and has
purchased all participations required to be purchased by it under this Agreement
and the other Loan Documents as of such Settlement Date, Agent shall pay to each
Lender such Lender's Pro Rata Share of principal, interest and Fees paid by
Borrowers since the previous Settlement Date for the benefit of such Lender on
the Loans held by it. To the extent that any Lender (a "Non-Funding Lender") has
failed to fund all such payments and Advances or failed to fund the purchase of
all such participations, Agent shall be entitled to set off the funding
short-fall against that Non-Funding Lender's Pro Rata Share of all payments
received from Borrowers. Such payments shall be made by wire transfer to such
Lender's account (as specified by such Lender in ANNEX H or the applicable
Assignment Agreement) not later than 2:00 p.m. (Toronto time) on the next
Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may
assume that each Revolving Lender will make its Pro Rata Share of each Revolving
Credit Advance available to Agent on each funding date. If such Pro Rata Share
is not, in fact, paid to Agent by such Revolving Lender when due, Agent will be
entitled to recover such amount on demand from such Revolving Lender without
setoff, counterclaim or deduction of any kind. If any Revolving Lender fails to
pay the amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall
promptly notify Borrower Representative and Borrowers shall immediately repay
such amount to Agent. Nothing in this SECTION 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Agent to
advance funds on behalf of any Revolving Lender or to relieve any Revolving
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that Borrowers may have against any Revolving Lender as a result of
any default by such Revolving Lender hereunder. To the extent that Agent
advances funds to any Borrower on behalf of any Revolving Lender and is not
reimbursed therefor on the same Business Day as such Advance is made, Agent
shall be entitled to retain for its account all interest accrued on such Advance
until reimbursed by the applicable Revolving Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrowers and such related payment is not
received by Agent, then Agent will be entitled to recover such amount from such
Lender on demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any
amount received by Agent under this Agreement must be returned to any Borrower
or paid to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to any Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.
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CREDIT AGREEMENT
(d) Non-Funding Lenders. The failure of any Non-Funding
Lender to make any Revolving Credit Advance or any payment required by it
hereunder, or to purchase any participation in any Swing Line Loan to be made or
purchased by it on the date specified therefor shall not relieve any other
Lender (each such other Revolving Lender, an "Other Lender") of its obligations
to make such Advance or purchase such participation on such date, but neither
any Other Lender nor Agent shall be responsible for the failure of any
Non-Funding Lender to make an Advance, purchase a participation or make any
other payment required hereunder. Notwithstanding anything set forth herein to
the contrary, a Non-Funding Lender shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a "Lender" or a
"Revolving Lender" (or be included in the calculation of "Requisite Lenders,"
"Requisite Revolving Lenders" or "Supermajority Revolving Lenders" hereunder)
for any voting or consent rights under or with respect to any Loan Document. At
Borrower Representative's request, Agent or a Person reasonably acceptable to
Agent shall have the right with Agent's consent and in Agent's sole discretion
(but shall have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign to
Agent or such Person, all of the Commitments of that Non-Funding Lender for an
amount equal to the principal balance of all Loans held by such Non-Funding
Lender and all accrued interest and fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
(e) Dissemination of Information. Agent shall use
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by Agent from, or delivered by Agent to, any Credit Party, with
notice of any Event of Default of which Agent has actually become aware and with
notice of any action taken by Agent following any Event of Default; provided,
that Agent shall not be liable to any Lender for any failure to do so, except to
the extent that such failure is attributable to Agent's gross negligence or
willful misconduct. Lenders acknowledge that Borrowers are required to provide
Financial Statements and Collateral Reports to Lenders in accordance with
ANNEXES E and F hereto and agree that Agent shall have no duty to provide the
same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of each Credit Party, Agent, Lenders and their
respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party
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CREDIT AGREEMENT
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents and the US Loan Documents constitute the complete agreement between
the parties with respect to the subject matter thereof and may not be modified,
altered or amended except as set forth in SECTION 11.2. Any letter of interest,
commitment letter, fee letter or confidentiality agreement, if any, between any
Credit Party and Agent or any Lender or any of their respective Affiliates,
predating this Agreement and relating to a financing of substantially similar
form, purpose or effect shall be superseded by this Agreement.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Agent and Borrowers, and by Requisite Lenders,
Requisite Revolving Lenders, Supermajority Revolving Lenders or all affected
Lenders, as applicable. Except as set forth in SECTIONS 11.2(b) AND (c), all
such amendments, modifications, terminations or waivers requiring the consent of
any Lender shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of
or consent with respect to any provision of this Agreement that increases the
percentage advance rates set forth in the definition of any Borrowing Base, or
that makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts set forth in SECTION 1.6, shall be effective unless the same
shall be in writing and signed by Agent, Supermajority Revolving Lenders and
Borrowers. No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in SECTION 2.2 to the making of any Loan or the
incurrence of any Letter of Credit Obligations shall be effective unless the
same shall be in writing and signed by Agent, Requisite Revolving Lenders and
Borrowers. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default or any Event of Default shall
be effective for purposes of the conditions precedent to the making of Loans or
the incurrence of Letter of Credit Obligations set forth in SECTION 2.2 unless
the same shall be in writing and signed by Agent, Requisite Revolving Lenders
and Borrowers.
(c) No amendment, modification, termination or waiver
shall, unless in writing and signed by Agent and each Lender directly affected
thereby: (i) increase the principal amount of any Lender's Commitment (which
action shall be deemed to directly affect all Lenders); (ii) reduce the
principal of, rate of interest on or Fees payable with respect to any Loan or
Letter of Credit Obligations of any affected Lender; (iii) extend any scheduled
payment date
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CREDIT AGREEMENT
(other than payment dates of mandatory prepayments under SECTIONS 1.3(b)(ii) and
(iii)) or final maturity date of the principal amount of any Loan of any
affected Lender; (iv) waive, forgive, defer, extend or postpone any payment of
interest or Fees as to any affected Lender; (v) release any Guaranty or, except
as otherwise permitted herein or in the other Loan Documents, release, or permit
any Credit Party to sell or otherwise dispose of, any Collateral with a value
exceeding US$5,000,000 or the Equivalent Amount in Canadian Dollars in the
aggregate (which action shall be deemed to directly affect all Lenders); (vi)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans that shall be required for Lenders or any of them to take
any action hereunder; and (vii) amend or waive this SECTION 11.2 or the
definitions of the terms "Requisite Lenders," "Requisite Revolving Lenders" or
"Supermajority Revolving Lenders" insofar as such definitions affect the
substance of this SECTION 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent or L/C Issuer, as the case may be, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
SECTION 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected
Lenders, the consent of Requisite Lenders is obtained, but the consent of other
Lenders whose consent is required is not obtained (any such Lender whose consent
is not obtained as described in this CLAUSE (i) and in CLAUSES (ii), (iii) and
(iv) below being referred to as a "Non Consenting Lender");
(ii) requiring the consent of Supermajority
Revolving Lenders, the consent of Requisite Lenders is obtained, but the consent
of Supermajority Revolving Lenders is not obtained;
(iii) requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more of the aggregate
Revolving Loan Commitments is obtained, but the consent of Requisite Revolving
Lenders is not obtained; or
(iv) requiring the consent of Requisite Lenders,
the consent of Lenders holding 51% or more of the aggregate Commitments is
obtained, but the consent of Requisite Lenders is not obtained;
then, so long as Agent is not a Non Consenting Lender, at Borrower
Representative's request Agent, or a Person reasonably acceptable to Agent,
shall have the right with Agent's consent and
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CREDIT AGREEMENT
in Agent's sole discretion (but shall have no obligation) to purchase from such
Non Consenting Lenders, and such Non Consenting Lenders agree that they shall,
upon Agent's request, sell and assign to Agent or such Person, all of the
Commitments of such Non Consenting Lenders for an amount equal to the principal
balance of all Loans held by the Non Consenting Lenders and all accrued interest
and Fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.
(e) Upon payment in full in cash and performance of all
of the Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions proceedings, or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
11.3 Fees and Expenses. Borrowers shall reimburse (i) Agent for all
fees, costs and expenses (including the reasonable fees and expenses of all of
its counsel, advisors, consultants and auditors hereunder) and (ii) Agent (and,
with respect to CLAUSES (c) and (d) below, all Lenders) for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers)
incurred in connection with the negotiation, preparation and filing and/or
recordation of the Loan Documents and incurred in connection with:
(a) any amendment, modification or waiver of, or consent
with respect to, or termination of, any of the Loan Documents or Related
Transactions Documents or advice in connection with the syndication and
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;
(b) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, any Credit Party or any other
Person and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Credit Parties or any other Person that may be obligated to Agent by virtue of
the Loan Documents, including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; provided, that
in the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders; provided
further, that no Person shall be entitled to reimbursement under this CLAUSE (b)
in respect of any litigation, contest, dispute, suit, proceeding or action to
the extent any of the foregoing results from such Person's gross negligence or
willful misconduct;
(c) any attempt to enforce any remedies of Agent or any
Lender against any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan Documents,
including any such attempt to enforce any such remedies in the course of any
work-out or restructuring of the Loans during the pendency of one or more
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CREDIT AGREEMENT
Events of Default; provided, that in the case of reimbursement of counsel for
Lenders other than Agent, such reimbursement shall be limited to one counsel for
all such Lenders;
(d) any workout or restructuring of the Loans during the
pendency of one or more Events of Default; and
(e) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral, in each
case in accordance with the terms of this Agreement and the other Loan
Documents;
including, as to each of CLAUSES (a) through (e) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all reasonable expenses,
costs, charges and other fees incurred by such counsel and others in connection
with or relating to any of the events or actions described in this SECTION 11.3,
all of which shall be payable, on demand, by Borrowers to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: reasonable fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges; and
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services; provided, that in no event
shall such expenses, costs, charges and fees be duplicative of the expenses,
costs, charges and fees and expenses paid under SECTION 11.3 of the US Credit
Agreement.
11.4 No Waiver. Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties of any provision of
this Agreement or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of SECTION 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders and directed to Borrowers specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
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CREDIT AGREEMENT
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents or in the US Loan Documents by
specific reference to the applicable provisions of this Agreement, (a) if any
provision contained in this Agreement applicable to Borrowers conflicts with any
provision in any of the other Loan Documents or in the US Loan Documents, the
provision contained in this Agreement shall govern and control, and (b) if any
provision contained in this Agreement applicable to the Credit Parties (other
than Borrowers) conflicts with any provision in any of the other Loan Documents
or in the US Loan Documents, the provision contained in the US Loan Documents
shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of two years
following receipt thereof, except that Agent and any Lender may disclose such
information (a) to Persons employed or engaged by Agent or such Lender; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this SECTION 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
CLAUSE (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) that ceases to
be confidential through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH PROVINCE
AND ANY APPLICABLE LAWS OF CANADA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES
THAT THE COURTS LOCATED IN THE PROVINCE OF ONTARIO SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT
PARTIES, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF THE PROVINCE OF ONTARIO;
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CREDIT AGREEMENT
AND PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, EACH CREDIT PARTY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I AND THAT SERVICE SO MADE SHALL
BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT
THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE
PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States mail as otherwise provided in this SECTION
11.10); (c) one Business Day after deposit with a reputable overnight courier
with all charges prepaid or (d) when delivered, if hand-delivered by messenger,
all of which shall be addressed to the party to be notified and sent to the
address or facsimile number indicated in ANNEX I or to such other address (or
facsimile number) as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrower Representative or Agent) designated in ANNEX
I to receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
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CREDIT AGREEMENT
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE ONTARIO LAWS
TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES
BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure (other than the
filing of this Agreement with the Securities and Exchange Commission) using the
name of GE Capital Canada or its affiliates or referring to this Agreement, the
other Loan Documents or the Related Transactions Documents without at least two
Business Days' prior notice to GE Capital Canada and without the prior written
consent of GE Capital Canada unless (and only to the extent that) such Credit
Party or Affiliate is required to do so under applicable law and then, in any
event, such Credit Party or Affiliate will consult with GE Capital Canada before
issuing such press release or other public disclosure. Each Credit Party
consents to the publication by Agent or any Lender of advertising material
relating to the financing transactions contemplated by this Agreement using
Borrower's name, product photographs, logo or trademark. Agent or such Lender
shall provide a draft of any advertising material to each Credit Party for
review and comment prior to the publication thereof. Agent reserves the right to
provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Credit Party for liquidation or reorganization, should any Credit Party
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Credit Party's assets, and shall continue to be
effective or to be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
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CREDIT AGREEMENT
11.16 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of SECTIONS 11.9 and 11.13, with its counsel.
11.17 Dollar References. Unless otherwise specified, all references
to dollar amounts in this Agreement shall mean Canadian Dollars.
11.18 Judgment Currency.
(a) If, for the purpose of obtaining or enforcing
judgment against any Borrower in any court in any jurisdiction, it becomes
necessary to convert into any other currency (such other currency being
hereinafter in this SECTION 11.18 referred to as the "Judgment Currency") an
amount due under any Loan Document in any currency (the "Obligation Currency")
other than the Judgment Currency, the conversion shall be made at the rate of
exchange prevailing on the Business Day immediately preceding (i) the date of
actual payment of the amount due, in the case of any proceeding in the courts of
the Province of Ontario or in the courts of any other jurisdiction that will
give effect to such conversion being made on such date, or (ii) the date on
which the judgment is given, in the case of any proceeding in the courts of any
other jurisdiction (the applicable date as of which such conversion is made
pursuant to this SECTION 11.18 being hereinafter in this SECTION 11.18 referred
to as the "Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any
jurisdiction referred to in SECTION 11.18(a), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of actual
receipt of the amount due in immediately available funds, (i) Borrower shall pay
such additional amount (if any, but in any event not a lesser amount) as may be
necessary to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of the Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date, and
(ii) Lender shall apply to any outstanding Obligations of Borrower, or if there
are no outstanding Obligations of Borrower, pay to Borrower the amount if any by
which the amount actually received in the Judgment currency, when converted at
the rate of exchange prevailing on the date of payment, exceeds the amount of
the Obligation Currency which could have been purchased with the amount of the
Judgment Currency stipulated in the judgment or judicial order at the rate of
exchange prevailing on the Judgment Conversion Date. Any amount due from
Borrower under SECTION 11.18(b) shall be due as a separate debt and shall not be
affected by judgment being obtained for any other amounts due under or in
respect of any of the Loan Documents.
(c) The term "rate of exchange" in this SECTION 11.18
means the rate of exchange at which Lender would, on the relevant date at or
about 12:00 noon (Toronto time), be prepared to sell Canadian Dollars or US
Dollars, as the case may be, against the Judgment Currency.
11.19 Time of Day. Unless otherwise specified, any reference to a
time of day or date means local time or date in the City of Toronto, Province of
Ontario.
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CREDIT AGREEMENT
11.20 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
12. CROSS-GUARANTY
12.1 Cross-Guaranty. Each Borrower hereby agrees that such Borrower
is jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this SECTION 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this SECTION 12 shall be absolute and
unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability
or any future amendment of, or change in, this Agreement, any other Loan
Document or any other agreement, document or instrument to which any Borrower is
or may become a party;
(b) the absence of any action to enforce this Agreement
(including this SECTION 12) or any other Loan Document or the waiver or consent
by Agent and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any action, or the
absence of any action, by Agent and Lenders in respect thereof (including the
release of any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2 Waivers by Borrowers. Each Borrower expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, to compel Agent or Lenders to marshal assets
or to proceed in respect of the Obligations guaranteed hereunder against any
other Credit Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this SECTION 12 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
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CREDIT AGREEMENT
12.3 Benefit of Guaranty. Each Borrower agrees that the provisions
of this SECTION 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
12.4 Waiver of Subrogation, Etc. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, and except as set
forth in SECTION 12.7, each Borrower hereby expressly and irrevocably waives any
and all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor. Each Borrower acknowledges and
agrees that this waiver is intended to benefit Agent and Lenders and shall not
limit or otherwise affect such Borrower's liability hereunder or the
enforceability of this Section 12, and that Agent, Lenders and their respective
successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this SECTION 12.4.
12.5 Election of Remedies. If Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Agent or such Lender a Lien upon any Collateral, whether owned by any
Borrower or by any other Person, either by judicial foreclosure or by non
judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this SECTION 12. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to "election of remedies" or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Agent or such Lender. Any election of remedies that results in
the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent or such Lender may bid all or less
than the amount of the Obligations and the amount of such bid need not be paid
by Agent or such Lender but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this SECTION 12, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.
12.6 [INTENTIONALLY OMITTED]
12.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment
under this SECTION 12 of all or any of the Obligations (other than Loans made to
that Borrower for which it
65
CREDIT AGREEMENT
is primarily liable) (a "Guarantor Payment") that, taking into account all other
Guarantor Payments then previously or concurrently made by any other Borrower,
exceeds the amount that such Borrower would otherwise have paid if each Borrower
had paid its pro rata share of the Obligations, then, following indefeasible
payment in full in cash of the Obligations and termination of the Commitments,
such Borrower shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Borrower for the amount of such
excess, pro rata based upon their respective Obligations in effect immediately
prior to such Guarantor Payment.
(b) [INTENTIONALLY OMITTED]
(c) This SECTION 12.7 is intended only to define the
relative rights of Borrowers and nothing set forth in this SECTION 12.7 is
intended to or shall impair the obligations of Borrowers, jointly and severally,
to pay any amounts as and when the same shall become due and payable in
accordance with the terms of this Agreement, including SECTION 12.1. Nothing
contained in this SECTION 12.7 shall limit the liability of any Borrower to pay
the Loans made directly or indirectly to that Borrower and accrued interest,
Fees and expenses with respect thereto for which such Borrower shall be
primarily liable.
(d) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of the
Borrower to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against
other Credit Parties under this SECTION 12.7 shall be exercisable upon the full
and indefeasible payment of the Obligations and the termination of the
Commitments.
12.8 Liability Cumulative. The liability of Borrowers under this
SECTION 12 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
13. LIENS AND LOAN PRIORITIES
It is the intention of the parties hereto that, except as otherwise
provided in SECTION 5.12, the Borrowers not guarantee any of the US Obligations
or that any of their assets constitute Collateral for any of the US Obligations.
Accordingly, except as otherwise provided in SECTION 5.12, but notwithstanding
any other provision of this Agreement or any other Loan Document to the
contrary, no cash or assets of any Borrower or any proceeds of any such assets
shall be applied, directly or indirectly, to the US Obligations. Notwithstanding
any provisions of this Agreement or any of the other Loan Documents to the
contrary, the parties acknowledge and agree that all Collateral of the Borrowers
and the other Credit Parties shall secure the Obligations, and there shall be no
requirement for Agent or Lenders to seek recourse first or to fully enforce
their or its respective remedies with respect to, Collateral of Borrowers prior
to seeking or obtaining recourse with respect to the Collateral securing the US
Obligations.
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CREDIT AGREEMENT
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
"BORROWERS"
DYNAMIC DETAILS CANADA, CORP.
By: /s/ XXXXXXX XXXXXXXX
-------------------------------
Xxxxxxx Xxxxxxxx
Vice President and Secretary
DDI CANADA ACQUISITION CORP.
By: /s/ XXXXXXX XXXXXXXX
-------------------------------
Xxxxxxx Xxxxxxxx
Vice President and Secretary
"AGENT" and "LENDER"
GE CANADA FINANCE HOLDING COMPANY
By: /s/ XXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxx
President
Title: Duly Authorized Signatory
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CREDIT AGREEMENT
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers.
"CREDIT PARTIES"
DDI CORP. DDI INTERMEDIATE HOLDINGS CORP.
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXXXX
------------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Vice President and Secretary Vice President and Secretary
DYNAMIC DETAILS, INCORPORATED LAMINATE TECHNOLOGY CORP.
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXXXX
------------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Vice President and Secretary Vice President and Secretary
DDI CAPITAL CORP. DYNAMIC DETAILS INCORPORATED,
COLORADO SPRINGS
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXXXX
------------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Vice President and Secretary Vice President and Secretary
DDI SALES CORP. DYNAMIC DETAILS TEXAS, LLC
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXXXX
------------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Vice President and Secretary Vice President and Secretary
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CREDIT AGREEMENT
DDI-TEXAS INTERMEDIATE HOLDINGS DDI-TEXAS INTERMEDIATE PARTNERS
II, L.L.C. II, L.L.C.
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXXXX
------------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Vice President and Secretary Vice President and Secretary
DYNAMICS DETAILS, INCORPORATED, DYNAMIC DETAILS, INCORPORATED,
SILICON VALLEY VIRGINIA
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXXXX
------------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Vice President and Secretary Vice President and Secretary
DYNAMIC DETAILS, L.P.
By: DDi-TEXAS INTERMEDIATE
PARTNERS II, L.L.C., its General Partner
By: /s/ XXXXXXX XXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxx
Vice President and Secretary
69
CREDIT AGREEMENT
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in ANNEX G.
"Accounts" means all "accounts," as such term is defined in the PPSA,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments), (including
any such obligations that may be characterized as an account or contract right
under the PPSA), (b) all of each Credit Party's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Credit
Party's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all rights
to payment due to any Credit Party for property sold, leased, licensed, assigned
or otherwise disposed of, for a policy of insurance issued or to be issued, for
a secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit
Party), (e) all healthcare insurance receivables, and (f) all collateral
security of any kind, now or hereafter in existence, given by any Account Debtor
or other Person with respect to any of the foregoing.
"Activation Notice" has the meaning ascribed to it in ANNEX C.
"Advance" means any Revolving Credit Advance or Swing Line Advance, as
the context may require.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 10% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, and (c)
each of such Person's officers and directors. For the purposes of this
definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of
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CREDIT AGREEMENT
its management or policies, whether through the ownership of voting securities,
by contract or otherwise; provided, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
"Agent" means GE Capital Canada in its capacity as Agent for Lenders or
its successor appointed pursuant to SECTION 9.7.
"Aggregate Borrowing Base" means as of any date of determination, an
amount equal to (a) the sum of the DDI Canada Borrowing Base and the Canada
Borrowing Base, less (b) Reserves.
"Agreement" means the Credit Agreement by and among Borrowers, the
other Credit Parties party thereto, GE Capital Canada, as Agent and Lender and
the other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable L/C Margin" means the per annum fee, from time to time in
effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to SECTION 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin, the
Applicable Revolver Index Margin, and the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan and the Swing Line Loan, as determined by
reference to SECTION 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to SECTION 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in SECTION
9.1(a).
"Availability Reserve" means the Reserve maintained against Borrowing
Availability in the amount of US$2,000,000, provided that such Reserve shall not
be duplicative of the "Availability Reserve" maintained under the US Credit
Agreement.
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq.
"BA Rate" means, at any time, the annual rate of interest which is the
average of the customary "BA thirty (30) to ninety (90) days" rates applicable
to Canadian Dollar bankers' acceptances displayed and identified as such on the
"Telerate Page 3197" at approximately 11:00 a.m. (Toronto time), on the then
most recent Determination Date (as defined below) or, if such display or service
ceases to exist, any other similar display and service designated by Agent in
existence at the relevant time (as adjusted by Agent after such time to reflect
any error in a posted rate or in the posted average rate of interest); provided,
that if no such rates are then
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CREDIT AGREEMENT
provided by Dow Xxxxx Telerate Service or a similar service designated by Agent,
then the "BA Rate" at the relevant time shall be GE Capital Canada's cost of
funds at such time for loans of a similar amount and term, as certified by GE
Capital Canada, whose certification thereof shall be binding and conclusive for
all purposes hereof. The BA Rate shall be fixed based upon the BA Rate in effect
on the first day of the interest period of the applicable loan (the
"Determination Date").
"Blocked Accounts" has the meaning ascribed to it in ANNEX C.
"Borrower" and "Borrowers" have the respective meanings ascribed
thereto in the preamble to the Agreement.
"Borrower Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Borrower in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Subsidiaries, if any, and all Intercompany
Notes owing to or held by it.
"Borrower Representative" means Details, in its capacity as Borrower
Representative pursuant to the provisions of SECTION 1.1(c).
"Borrowing Availability" means as of any date of determination (a) as
to all Borrowers, the lesser of (i) the Maximum Amount less the sum of (A) the
Revolving Loan and Swing Line Loan and (B) the US Revolving Loan and the US
Swing Line Loan, in each case then outstanding, and (ii) the Aggregate Borrowing
Base less the sum of the Revolving Loan and Swing Line Loan then outstanding; or
(b) as to an individual Borrower, the lesser of (i) the Maximum Amount less the
sum of (A) the Revolving Loan and Swing Line Loan outstanding to all other
Borrowers and (B) the US Revolving Loan and US Swing Line Loan then outstanding,
and (ii) that Borrower's separate Borrowing Base, less the sum of the Revolving
Loan and Swing Line Loan outstanding to that Borrower.
"Borrowing Base" means as the context may require, the Canada Borrowing
Base and the DDI Canada Borrowing Base, or any such Borrowing Base.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by Borrowers and Parent in the form attached to the
Agreement as EXHIBIT 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the Province of Ontario
or the States of California or New York and in reference to LIBOR Loans shall
mean any such day that is also a LIBOR Business Day.
"Canada" means Dynamic Details Canada, Corp, a Nova Scotia unlimited
liability company.
"Canada Borrowing Base" means, as of any date of determination by
Agent, from time to time, an amount equal to up to 85% of the book value of
Canada's Eligible Accounts at such time, less any Reserves established by Agent
at such time.
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CREDIT AGREEMENT
"Canadian Benefit Plans" means all material employee benefit plans of
any nature or kind whatsoever that are not Canadian Pension Plans and are
maintained or contributed to by any Borrower.
"Canadian Dollars" or "CD$" shall mean lawful currency of Canada.
"Canadian Pension Plans" shall mean each plan that is considered to be
a pension plan for purposes of any applicable pension benefits standards statute
or regulation in Canada established, maintained or contributed to by any
Borrower for its employees or former employees.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.
Notwithstanding the foregoing, the term "Capital Expenditures" shall not include
capital expenditures (i) in respect of permitted reinvestment of sales proceeds,
insurance proceeds and condemnation proceeds received by Borrower or any of its
Subsidiaries or (ii) to the extent financed by a third party.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it ANNEX B.
"Cash Equivalents" has the meaning ascribed to it in ANNEX B.
"Cash Management Systems" has the meaning ascribed to it in SECTION
1.8.
"Change of Control" means any of the following: (a) any person or group
of persons (within the meaning of the Securities Exchange Act of 1934) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 40% or more of the issued and outstanding shares of capital Stock of
Parent having the right to vote for the election of directors of Parent under
ordinary circumstances; (b) during any period of twelve consecutive calendar
months, individuals who at the beginning of such period constituted the board of
directors of Parent (together with any new directors whose election by the board
of directors of Parent or whose nomination for election by the Stockholders of
Parent was approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason other than death or disability to constitute a majority of the directors
then in office; or (c) any Credit Party ceases to own and control all of the
economic and voting rights associated
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CREDIT AGREEMENT
with all of the outstanding capital Stock of any of its Subsidiaries (excluding
DDi Europe Limited).
"Charges" means all federal, provincial, state, county, city,
municipal, local, foreign or other governmental taxes, levies, assessments,
charges, liens, claims or encumbrances upon or relating to (a) the Collateral,
(b) the Obligations, (c) the employees, payroll, income or gross receipts of any
Credit Party, (d) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in
the PPSA, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party, wherever located.
"Closing Date" means June 30, 2004.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of California; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern.
"Collateral" means the property covered by the Security Agreement and
the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of Agent, on behalf
of itself and Lenders, to secure the Obligations; provided, that in no event
will the "Collateral" include any Excluded Assets.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, the Intellectual Property Security Agreement, and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in ANNEX F.
"Collection Account" means, with respect to US Dollar deposits, that
certain account of Agent, account number 0000000 (GECCI-COMM FIN), and with
respect to Canadian Dollar deposits, that certain account of Agent, account
number 0000000 (GECCI-COMM FIN), each at Royal Bank of Canada, Xxxx Xx. 000,
Xxxxxxx Xx. 00000, XXX 000000000, in Xxxxxxx, Xxxxxxx, Reference CFI 1250 (DDi
Canada), or such other account as may be specified in writing by Agent as the
"Collection Account."
"Commitment Termination Date" means the earliest of (a) Xxxxx 00, 0000,
(x) the date of termination of Lenders' obligations to make Advances and to
incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to SECTION 8.2(b), (c) the occurrence of the US Commitment
Termination Date, and (d) the date of indefeasible prepayment in full by
Borrowers of the Loans and the cancellation and return (or stand-by guarantee)
of all Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to ANNEX B, and the permanent reduction of all Commitments
to zero dollars (CD$0).
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CREDIT AGREEMENT
"Commitments" means (a) as to any Lender, the amount of such Lender's
Revolving Loan Commitment (including without duplication the Swing Line Lender's
Swing Line Commitment as a subset of its Revolving Loan Commitment) as set forth
in ANNEX J or in the most recent Assignment Agreement executed by such Lender,
and (b) as to all Lenders, the aggregate of all Lenders' Revolving Loan
Commitments (including without duplication the Swing Line Lender's Swing Line
Commitment as a subset of its Revolving Loan Commitment), which aggregate
commitment shall be FORTY MILLION US DOLLARS (US$40,000,000) (or the Equivalent
Amount in Canadian Dollars) on the Closing Date, as to each of CLAUSES (a) AND
(B), as such Commitments may be reduced, amortized or adjusted from time to time
in accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in ANNEX E.
"Contracts" means all contracts, now owned or hereafter acquired by any
Credit Party, in any event, including all contracts, undertakings, or agreements
(other than rights evidenced by Chattel Paper, Documents or Instruments) in or
under which any Credit Party may now or hereafter have any right, title or
interest, including any agreement relating to the terms of payment or the terms
of performance of any Account.
"Control Letter" means a letter agreement between Agent and (a) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (b) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (c) a futures commission merchant or clearing house, as applicable, with
respect to commodity accounts and commodity contracts held by any Credit Party,
or (d) the bank at which any deposit accounts of any Credit Party are
maintained, in each case whereby, among other things, the issuer, securities
intermediary, futures commission merchant or bank limits any security interest
in the applicable assets in a manner reasonably satisfactory to Agent,
acknowledges the Lien of Agent, on behalf of itself and Lenders, on such assets,
and agrees to follow the instructions or entitlement orders of Agent without
further consent by the affected Credit Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"CRA" means the Canada Revenue Agency.
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CREDIT AGREEMENT
"Credit Parties" means Parent and each of its Subsidiaries (other than
DDi Europe Limited and each of its Subsidiaries).
"Daily Reporting Activation Event" means any time at which Borrower and
US Borrowers have aggregate Liquidity of less than US$7,000,000.
"DDi Canada" means DDI Canada Acquisition Corp., an Ontario
corporation.
"DDi Canada Borrowing Base" means, as of any date of determination by
Agent, from time to time, an amount equal to up to 85% of the book value of DDi
Canada's Eligible Accounts at such time, less any Reserves established by Agent
at such time.
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in SECTION 1.5(d).
"Deposit Accounts" means all "deposit accounts" as defined in the Code,
now or hereafter held in the name of any Credit Party.
"Details" mean Dynamic Details, Incorporated, a California corporation.
"Details Borrowing Base" means, as of any date of determination by
Agent, from time to time, an amount equal to up to 85% of the book value of
Details' Eligible Accounts at such time, less any Reserves established by Agent
at such time.
"Disbursement Accounts" has the meaning ascribed to it in ANNEX C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as DISCLOSURE SCHEDULES (3.1) through (6.7) in the Index to the
Agreement.
"Documents" means any "documents" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located.
"Dominion Activation Event" means the giving by Agent of an Activation
Notice in accordance with the provisions of ANNEX C.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period, determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain ( but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense, (iii) loss from non-cash
restructuring charges and other
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CREDIT AGREEMENT
extraordinary non-cash items for such period, (iv) depreciation and amortization
for such period, (v) amortized debt discount for such period, and (vi) the
amount of any deduction to consolidated net income as the result of any grant to
any employees or directors of such Person of any Stock, in each case to the
extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, (vii) any aggregate net non-cash loss
during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), (viii) non-capitalized fees, expenses and payments
made or incurred pursuant to the Loan documents or the transactions contemplated
thereby ad paid on the Closing Date, (ix) non-cash write-downs of assets, and
(x) write-offs due to exercise of employee options and minus (d) any cash
payments made during such period with respect to items that were added back in a
prior period pursuant to CLAUSE (C)(iii) above. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership interest,
except to the extent any such income has actually been received by such Person
in the form of cash dividends or distributions; (3) the undistributed earnings
of any Subsidiary of such Person 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 or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person; (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"Eligible Accounts" has the meaning ascribed to it in SECTION 1.6.
"Environmental Laws" means all applicable federal, provincial, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Environmental Protection Act (Ontario) and any and all regulations promulgated
thereunder, and all analogous provincial, state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
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CREDIT AGREEMENT
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the PPSA,
now owned or hereafter acquired by any Credit Party, wherever located and, in
any event, including all such Credit Party's machinery and equipment, including
processing equipment, conveyors, machine tools, data processing and computer
equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"Equivalent Amount" means, on any date of determination, with respect
to obligations or valuations denominated in one currency (the "first currency"),
the amount of another currency (the "second currency") that would result from
the conversion of the relevant amount of the first currency into the second
currency at the Bank of Canada 12:00 noon rate quoted on the Reuters Monitor
Screen (Page BOFC or such other Page as may replace such Page for the purpose of
displaying such exchange rate) on such date (and available by telephone from the
Bank of Canada at (000) 000-0000 or, if such date is not a Business Day, on the
Business Day immediately preceding such date of determination, or at such other
rate as may have been agreed in writing between Borrowers and Agent from time to
time.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade or
business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA for which notice
to the PBGC has not been waived; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any
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CREDIT AGREEMENT
ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of
intent to terminate a Title IV Plan in a distress termination described in
Section 4041(c) of ERISA or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) with respect to a Title IV
Plan, the existence of an "accumulated funding deficiency" (as defined in
Section 412 of the IRC or Section 302 of ERISA) whether or not waived, or the
failure to make by its due date a required installment under Section 412(m) of
the IRC or the failure to make any required contribution to a Multiemployer
Plan, unless any such failure is cured within 30 days; (g) the filing pursuant
to Section 412(d) of the IRC or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to a Title IV Plan; (h) the
making of any amendment to any Title IV Plan which could reasonably be expected
to result in the imposition of a lien or the posting of a bond or other
security; (i) with respect to a Title IV Plan an event described in Section
4062(e) of ERISA; (j) any other event or condition that would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan or
Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (k) the termination of a Multiemployer Plan under Section
4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; (l) the loss of a Qualified Plan's qualification
or tax exempt status; or (m) the termination of a Plan described in Section 4064
of ERISA.
"Event of Default" has the meaning ascribed to it in SECTION 8.1.
"Excluded Assets" means the collective reference to any Contract or
General Intangible to the extent the granting of a Lien thereon is prohibited or
would constitute a default under any agreement or document governing such
Contract or General Intangible (but only to the extent such prohibition or
default is enforceable under applicable law).
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System of the United States.
"Fees" means any and all fees payable to Agent or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in ANNEX
G.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrowers delivered
in accordance with SECTION 3.4 and ANNEX E, as applicable.
"Fiscal Month" means any of the monthly accounting periods of
Borrowers.
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CREDIT AGREEMENT
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrowers, ending on March 31, June 30, September 30, and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of Borrowers
ending on December 31 of each year.
"Fixed Charges" means, with respect to any Person for any fiscal
period, the aggregate of (a) the aggregate of all Interest Expense paid or
payable in cash during such period, plus (b) scheduled payments of principal
with respect to Indebtedness (including Capital Lease Obligations) during such
period, less (c) the amount of the Senior Accreting Notes Interest Payment
actually paid.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of (a) EBITDA minus Capital Expenditures minus income taxes
paid or payable in cash to (b) Fixed Charges, in each case for such period.
"Fixtures" means all "fixtures" as defined in the Code, now owned or
hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and that by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America or Canada (as the context may require), consistently applied,
as such term is further defined in ANNEX G to the Agreement.
"GE Capital Canada" means GE Canada Finance Holding Company, a Nova
Scotia unlimited liability company.
"General Intangibles" means all "intangibles," as such term is defined
in the PPSA, now owned or hereafter acquired by any Credit Party, including all
right, title and interest that such Credit Party may now or hereafter have in or
under any Contract, all payment intangibles, customer lists, Licenses,
Copyrights, Trademarks, Patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all
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CREDIT AGREEMENT
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the PPSA, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the PPSA, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) 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, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, each Continuing Guaranty and any
other guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
"Guarantors" means Parent and each of its direct and indirect
Subsidiaries (excluding any Borrower), and each other Person, if any, that
executes a guaranty or other similar agreement in favor of Agent, for itself and
the ratable benefit of Lenders, in connection with the transactions contemplated
by the Agreement and the other Loan Documents.
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CREDIT AGREEMENT
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Indebtedness" means , with respect to any Person, without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred 6 months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than 6 months unless being
contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
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 and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, (i) the
Obligations, and (j) the US Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in SECTION
1.13.
"Indemnified Person" has the meaning ascribed to it in SECTION 1.13.
"Index Rate" means, as of any date of determination, (a) with respect
to Obligations denominated in US Dollars, for any day, a floating rate equal to
the higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "prime rate" (or, if The Wall Street Journal ceases quoting a
prime rate, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum; and (b) with respect
to Obligations denominated in Canadian Dollars a floating rate equal to the
greater of (i) the annual rate of interest publicly quoted from time to time in
the "Moneypage" section of The Wall Street Journal as being the "Canadian prime
rate" and (ii) the BA Rate in respect of a period of thirty (30) days commencing
on the first Business Day of the calendar month in which such date occurs, plus
1.00% per annum. Each change in
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CREDIT AGREEMENT
any interest rate provided for in the Agreement based upon the Index Rate shall
take effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Insolvency Law" means any of the Bankruptcy and Insolvency Act
(Canada), the Companies' Creditors Arrangement Act (Canada) and the Bankruptcy
Code, any successors to such statutes and any other applicable insolvency or
other similar law of any jurisdiction, including any law of any jurisdiction
permitting a debtor to obtain a stay or a compromise of the claims of its
creditors against it.
"Instruments" means all "instruments," as such term is defined in the
PPSA, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intellectual Property Security Agreement" means the Intellectual
Property Security Agreement made by Borrowers in favor of Agent, on behalf of
itself and Lenders, as the same may be amended, restated , supplemented or
otherwise modified from time to time.
"Intercompany Notes" has the meaning ascribed to it in SECTION 6.3.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including (a)
interest expense with respect to any Funded Debt of such Person, (b) interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person, and (c) with respect to Borrowers and their Subsidiaries, the
amount of any Restricted Payments made in accordance with SECTIONS 6.13(e) or
(f), if any.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that
in the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three-month intervals and on the last day of such LIBOR
Period; and provided further, that in addition to the foregoing, each of (x) the
date upon which all of the Commitments have been terminated and the Loans have
been paid in full and (y) the Commitment Termination Date shall be deemed to be
an "Interest Payment Date" with respect to any interest that has then accrued
under the Agreement.
"Inventory" means all "inventory," as such term is defined in the PPSA,
now owned or hereafter acquired by any Credit Party, wherever located, and in
any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, supplies or
materials
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CREDIT AGREEMENT
or supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"Investment Property" means all investment property now owned or
hereafter acquired by any Credit Party, wherever located, including (a) all
securities, whether certificated or uncertificated, including stocks, bonds,
interests in limited liability companies, partnership interests, treasuries,
certificates of deposit, and mutual fund shares; (b) all securities entitlements
of any Credit Party, including the rights of any Credit Party to any securities
account and the financial assets held by a securities intermediary in such
securities account and any free credit balance or other money owing by any
securities intermediary with respect to that account; (c) all securities
accounts of any Credit Party; (d) all commodity contracts of any Credit Party;
and (e) all commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the United States Internal Revenue Service.
"ITA" means the Income Tax Act (Canada).
"Judgment Currency" has the meaning assigned to it in SECTION 11.18.
"L/C Issuer" has the meaning ascribed to it in ANNEX B.
"L/C Sublimit" has the meaning ascribed to in it ANNEX B.
"Lease Expenses" means, with respect to any Person for any fiscal
period, the aggregate rental obligations of such Person determined in accordance
with GAAP which are payable in respect of such period under leases of real or
personal property (net of income from subleases thereof, but including taxes,
insurance, maintenance and similar expenses that the lessee is obligated to pay
under the terms of such leases), whether or not such obligations are reflected
as liabilities or commitments on a consolidated balance sheet of such Person or
in the notes thereto, excluding, however, any such obligations under Capital
Leases.
"Lenders" means GE Capital Canada, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include any assignee of
such Lender.
"Letter of Credit Fee" has the meaning ascribed to it in ANNEX B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower Representative, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by Agent or another L/C Issuer or the purchase
of a participation as set forth in ANNEX B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
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CREDIT AGREEMENT
"Letters of Credit" means documentary or standby letters of credit
issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.
"Letter-of Credit Rights" means letter of credit rights, now owned or
hereafter acquired by any Credit Party, including rights to payment or
performance under a letter of credit, whether or not such Credit Party, as
beneficiary, has demanded or is entitled to demand payment or performance.
"LIBOR Business Day" means a Business Day on which banks in the City of
London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan in US Dollars or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative pursuant
to the Agreement and ending one, two, three or six months thereafter, as
selected by Borrower Representative's irrevocable notice to Agent as set forth
in SECTION 1.5(e); provided, that the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that
is not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding
LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond
the Commitment Termination Date shall end two LIBOR Business Days prior
to such date;
(c) any LIBOR Period that begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
LIBOR Period) shall end on the last LIBOR Business Day of a calendar
month;
(d) Borrower Representative shall select LIBOR Periods so
as not to require a payment or prepayment of any LIBOR Loan during a
LIBOR Period for such Loan; and
(e) Borrower Representative shall select LIBOR Periods so
that there shall be no more than three separate LIBOR Loans in
existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest determined
by Agent equal to:
(a) the offered rate for deposits in US Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full LIBOR Business Day next
preceding the first day of such LIBOR Period (unless such
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CREDIT AGREEMENT
date is not a Business Day, in which event the next succeeding Business
Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on the day that is two LIBOR Business
Days prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in
effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board
that are required to be maintained by a member bank of the Federal
Reserve System.
If such interest rates shall cease to be available from Telerate News Service
(or its successor satisfactory to Agent), the LIBOR Rate shall be determined
from such financial reporting service or other information as shall be mutually
acceptable to Agent and Borrower Representative.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the PPSA or
comparable law of any jurisdiction).
"Liquidity" means, at any time, the sum of (a) all cash in Borrowers'
and US Borrowers' Deposit Accounts that are subject to Control Letters, plus (b)
Borrowing Availability and US Borrowing Availability (less Reserves), in each
case at such time.
"Litigation" has the meaning ascribed to it in SECTION 3.13.
"Loan Account" has the meaning ascribed to it in SECTION 1.12.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the Master Standby Agreement, the Master Documentary Agreement, and
all other agreements, instruments, documents and certificates identified in the
Schedule of Documents executed and delivered to, or in favor of, Agent or any
Lender and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, letter of credit agreements and all other
written matter whether heretofore, now or hereafter executed by or on behalf of
any Credit Party, or any employee of any Credit Party, and delivered to Agent or
any Lender in connection with the Agreement or the transactions contemplated
thereby, but expressly excluding any US Loan Documents. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
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CREDIT AGREEMENT
"Loans" means the Revolving Loan and the Swing Line Loan.
"Lock Boxes" has the meaning ascribed to it in ANNEX C.
"Margin Stock" has the meaning ascribed to it in SECTION 3.10.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date among Borrowers, as
Applicant, and GE Capital Canada, as Issuer.
"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date among Borrowers, as Applicant,
and GE Capital Canada, as Issuer.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Borrowers and the US Borrowers considered as a whole, (b) the ability of
Borrowers as a whole to pay any of the Loans or any of the other Obligations in
accordance with the terms of the Agreement, (c) the Collateral or Agent's Liens,
on behalf of itself and Lenders, on the Collateral or the priority of such
Liens, or (d) Agent's or any Lender's rights and remedies under the Agreement
and the other Loan Documents. Without limiting the generality of the foregoing,
any event or occurrence adverse to one or more Borrowers or US Borrowers that
results or would reasonably be expected to result in losses, costs, damages,
liabilities or expenditures in excess of US$3,000,000 shall constitute a
Material Adverse Effect.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Sections 3(37) or 4001(a)(3) of ERISA, and to which any Credit Party or ERISA
Affiliate is making, or is obligated to make, contributions on behalf of
participants who are or were employed by any of them.
"Negative Effect" has the meaning ascribed to it in SECTION 5.12.
"Non-Funding Lender" has the meaning ascribed to it in SECTION
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes and the Swing Line
Note.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
SECTION 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it in
SECTION 1.1(a).
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement, letter of credit agreement or other instrument, arising
under the Agreement or any of
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CREDIT AGREEMENT
the other Loan Documents or any other financing agreement between GE Capital
Canada and any Credit Party. This term includes all principal, interest
(including all interest that accrues after the commencement of any case or
proceeding by or against any Credit Party in bankruptcy, whether or not allowed
in such case or proceeding), Fees, hedging obligations under swaps, caps and
collar arrangements provided by any Lender, expenses, attorneys' fees and any
other sum chargeable to any Credit Party under the Agreement or any of the other
Loan Documents.
"Parent" means DDi Corp., a Delaware corporation.
"Parent Guarantor" means each of Parent, DDi Intermediate Holdings
Corp, DDi Capital Corp., and their respective direct Subsidiaries (excluding any
such Subsidiary that is a Borrower), if any.
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of Canada, the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of Canada, the United States or of any
other country, including registrations, recordings and applications in the
Canadian Intellectual Property Office, the United States Patent and Trademark
Office or in any similar office or agency of Canada, the United States, any
state, province or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with SECTION 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of US$200,000 or the Equivalent Amount in Canadian Dollars
at any time, so long as such Liens attach only to Inventory; (f) deposits
securing, or in lieu of, surety, appeal or customs bonds in proceedings to which
any Credit Party is a party; (g) any attachment or judgment lien not
constituting an Event of Default under SECTION 8.1(j); (h) zoning restrictions,
easements, licenses, rights-of-way or other restrictions on the use of any Real
Estate or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter
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CREDIT AGREEMENT
created Liens in favor of Agent, on behalf of Lenders; (j) Liens in existence on
the date hereof and summarized in DISCLOSURE SCHEDULE (6.7) securing
Indebtedness described in DISCLOSURE SCHEDULE (6.3) and permitted refinancings,
extensions and renewals thereof, including extensions or renewals of any such
Liens; provided that the principal amount of the Indebtedness so secured is not
increased and the Lien does not attach to any other property; (k) Liens created
after the date hereof by conditional sale or other title retention agreements
(including Capital Leases) or in connection with purchase money Indebtedness
with respect to Equipment and Fixtures acquired by any Credit Party in the
ordinary course of business, involving the incurrence of an aggregate amount of
purchase money Indebtedness and Capital Lease Obligations of not more than
US$1,000,000 or the Equivalent Amount in Canadian Dollars outstanding at any one
time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred within 20
days following such purchase and does not exceed 100% of the purchase price of
the subject assets); (l) any residual interest or title of a lessor or sublessor
under any lease or sublease entered into by any Credit Party in the ordinary
course of its business and covering only the assets so leased (including, with
respect to the capital lease of Borrower's principal manufacturing facility and
related Equipment, and covering only such facility and related Equipment); (m)
Permitted Investments relating to certificate of deposit repurchase agreements;
(n) Liens consisting of rights of set-off and off-set of a customary nature of
bankers' liens on deposit accounts, whether arising by contract or operation of
law, incurred in the ordinary course of business; (o) Liens constituting
Licenses and sublicenses entered into by any Credit Party in the ordinary course
of business; (p) Liens in favor of US Agent under the US Loan Documents securing
the US Obligations; (q) Liens in favor of US Agent, for the benefit of Agent and
Lenders, securing the obligations under the US Guaranty; and (r) other Liens
securing Indebtedness not exceeding US$100,000 or the Equivalent Amount in
Canadian Dollars in the aggregate at any time outstanding, so long as such Liens
do not attach to any Accounts.
"Permitted Investments" has the meaning ascribed to it in SECTION 6.2.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, provincial, state, county, city, municipal, local,
foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" means, at any time, an "employee benefit plan," as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute on behalf of participants who
are or were employed by any Credit Party or ERISA Affiliate.
Pledge Agreement" means the Pledge Agreement of even date herewith
executed by each Credit Party in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of such Credit Party's Subsidiaries and all
Intercompany Notes owing to or held by it, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"PPSA" means the Personal Property Security Act (Ontario) and the
Regulations thereunder; provided, that if attachment, perfection or priority of
Agent's security interests in any
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CREDIT AGREEMENT
Collateral is governed by the personal property security laws of any
jurisdiction other than Ontario, "PPSA" means those personal property security
laws in such other jurisdiction (including the Uniform Commercial Code in effect
in any state of the United States) for the purpose of the provisions hereof
relating to such attachment, perfection or priority and for the definitions
related to such provisions.
"Proceeds" means "proceeds," as such term is defined in the PPSA,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"Projections" means US Borrowers' forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, consistent with the historical Financial Statements
of Borrowers, together with appropriate supporting details and a statement of
underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any
Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, (b) with respect to all Loans, the
percentage obtained by dividing (i) the aggregate Commitments of that Lender by
(ii) the aggregate Commitments of all Lenders, and (c) with respect to all Loans
on and after the Commitment Termination Date, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Loans held by
that Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender
and, with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
A-21
CREDIT AGREEMENT
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided that no
Person proposed to become a Lender after the Closing Date and determined by
Agent to be acting in the capacity of a vulture fund or distressed debt
purchaser shall be a Qualified Assignee, and no Person or Affiliate of such
Person proposed to become a Lender after the Closing Date and that holds Stock
issued by any Credit Party shall be a Qualified Assignee.
"Real Estate" has the meaning ascribed to it in SECTION 3.6.
"Refunded Swing Line Loan" has the meaning ascribed to it in SECTION
1.1(b)(iii).
"Related Transactions" means the initial borrowing under the Revolving
Loan on the Closing Date, the payment of all fees, costs and expenses associated
with all of the foregoing and the execution and delivery of all of the Related
Transactions Documents.
"Related Transactions Documents" means the Loan Documents and all other
agreements or instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Requisite Lenders" means Lenders having (a) more than 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of all Loans.
"Requisite Revolving Lenders" means Lenders having (a) more than 66
2/3% of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving
Loan Commitments have been terminated, more than 66 2/3% of the aggregate
outstanding amount of the Revolving Loan.
"Reserves" means with respect to any Borrowing Base (a) reserves
established pursuant to SECTION 5.4(c), (b) the Availability Reserve, (c) the
Senior Accreting Notes Interest Reserve, and (d) such other reserves against
Eligible Accounts or Borrowing Availability that Agent may, in its reasonable
credit judgment, establish from time to time. Without limiting the generality of
the foregoing, Reserves established to ensure the payment of accrued Interest
Expenses or Indebtedness shall be deemed to be a reasonable exercise of Agent's
credit judgment.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges
A-22
CREDIT AGREEMENT
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
any Subordinated Debt; (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Stock of such Credit Party now or hereafter outstanding;
(e) any payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any shares of such Credit
Party's Stock or of a claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission; (f) any
payment, loan, contribution, or other transfer of funds or other property to any
Stockholder of such Credit Party other than payment of compensation in the
ordinary course of business to Stockholders who are employees of such Credit
Party; and (g) any payment of management fees (or other fees of a similar
nature) by such Credit Party to any Stockholder of such Credit Party or its
Affiliates.
"Revolving Credit Advance" has the meaning ascribed to it in SECTION
1.1(a)(i).
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (a) the aggregate
amount of Revolving Credit Advances outstanding to Borrowers plus (b) the
aggregate Letter of Credit Obligations incurred on behalf of Borrowers. Unless
the context otherwise requires, references to the outstanding principal balance
of the Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Revolving Lender, the
aggregate commitment of such Revolving Lender to make Revolving Credit Advances
or incur Letter of Credit Obligations as set forth on ANNEX J or in the most
recent Assignment Agreement executed by such Revolving Lender and (b) as to all
Revolving Lenders, the aggregate commitment of all Revolving Lenders to make
Revolving Credit Advances or incur Letter of Credit Obligations, which aggregate
commitment shall be FORTY MILLION US DOLLARS (US$40,000,000) (or the Equivalent
Amount in US Dollars) on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in SECTION 1.1(a)(ii).
"Schedule of Documents" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as ANNEX D.
"Security Agreement" means the Security Agreement of even date herewith
entered into by and among Agent, on behalf of itself and Lenders, each Borrower
and each Guarantor, as the same may be amended, restated, supplemented or
otherwise modifies from time to time.
"Senior Accreting Notes Interest Payment" means the interest payment in
the amount of US$900,000 to be made during the Fiscal Quarter ending June 30,
2004, in accordance with paragraph 1 of the Senior Accreting Notes, which amount
constitutes the interest on the Senior
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CREDIT AGREEMENT
Accreting Notes that has been accreted thereon as of such date in accordance
with the Indenture dated as of December 12, 2003, for the Senior Accreting
Notes.
"Senior Accreting Notes Interest Reserve" means the Reserve maintained
against Borrowing Availability in the amount of (a) US$660,000 as of the Closing
Date (or as of the date that Liquidity falls below US$21,000,000 as provided
below), and (b)(i) increased by US$220,000 as of the last day of each Fiscal
Month thereafter, and (ii) decreased on the date that a cash interest payment is
made in respect of the Senior Accreting Notes by the amount of such interest
payment; provided, that the "Senior Accreting Notes Interest Reserve" shall be
$0 beginning at such time as Borrowers and US Borrowers have aggregate Liquidity
of more than US$21,000,000 and until such time as Liquidity thereafter falls
below US$21,000,000.
"Senior Accreting Notes" mean the senior unsecured accreting notes of
DDi Capital Corp. issued pursuant to the Indenture dated as of December 12,
2003, as in effect on the Closing Date.
"Series B Certificate of Designation" means the Certificate of
Designation of Series B Preferred Stock of DDi Corp governing the terms and
conditions of the Series B Preferred Stock.
"Series B Preferred Stock" means the Series B-1 Preferred Stock and the
Series B-2 Preferred Stock, US$0.0001 par value per share, issued by Parent
pursuant to the Purchase Agreement dated as of March 29, 2004, between Parent
and each of the purchasers party thereto, together with all schedules, exhibits
and attachments thereto.
"Software" means all software, now owned or hereafter acquired by any
Credit Party, other than software embedded in any category of Goods, including
all computer programs and all supporting information provided in connection with
a transaction related to any program.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
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CREDIT AGREEMENT
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
"Subsidiary Guarantor" means Details and each of Details' direct and
indirect Subsidiaries (excluding each Borrower).
"Supermajority Revolving Lenders" means Lenders having (a) 80% or more
of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan) and Letter of Credit Obligations.
"Supporting Obligations" means all "supporting obligations" as defined
in the Code, including letters of credit and guaranties issued in support of
Accounts, Chattel Paper, Documents, General Intangibles, Instruments, or
Investment Property.
"Swing Line Advance" has the meaning ascribed to it in SECTION
1.1(b)(i).
"Swing Line Availability" has the meaning ascribed to it in SECTION
1.1(b)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Advances as set forth on
ANNEX J to the Agreement, which commitment constitutes a subfacility of the
Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital Canada.
"Swing Line Loan" means, as the context may require, at any time, the
aggregate amount of Swing Line Advances outstanding to any Borrower or to all
Borrowers.
"Swing Line Note" has the meaning ascribed to it in SECTION 1.1(b)(ii).
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CREDIT AGREEMENT
"Target" has the meaning ascribed to it in SECTION 6.1.
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding: (a) taxes
imposed on the net income of Agent, L/C Issuer or any Lender (including branch
profits taxes, minimum taxes and taxes computed under alternative methods, at
least one of which is based on net income) by (i) the jurisdiction under the
laws of which Agent, L/C Issuer or such Lender is organized or any political
subdivision thereof, or (ii) the jurisdiction of Agent's, L/C Issuer's or such
Lender's applicable lending office or any political subdivision thereof, or
(iii) any jurisdiction in which Agent, L/C Issuer or any Lender is doing
business (other than by virtue of being a Lender or L/C Issuer under this
Agreement), and (b) any taxes that would not have been imposed but for the gross
negligence or willful misconduct of Agent, L/C Issuer or any Lender.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged, (c) all Letter of
Credit Obligations have been cash collateralized, cancelled or backed by standby
letters of credit in accordance with ANNEX B, and (d) no Borrower shall have any
further right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer Plan),
that is subject to Title IV of ERISA or Section 412 of the IRC, and that any
Credit Party or ERISA Affiliate maintains, contributes to or has an obligation
to contribute to on behalf of participants who are or were employed by any of
them.
"Trademark License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter existing
or adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate amount,
if any, of the amount by which the present value of all accrued benefits under
each Title IV Plan exceeds the fair market value of all assets of such Title IV
Plan allocable to such benefits determined as of the most recent valuation date
for each such Title IV Plan using the actuarial assumptions for funding purposes
in effect under such Title IV Plan.
"US Agent" means the "Agent" under and as defined in the US Credit
Agreement.
"US Borrower" and "US Borrowers" means "Borrower" and "Borrowers,"
respectively, under and as defined in the US Credit Agreement.
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CREDIT AGREEMENT
"US Commitment Termination Date" means the "Commitment Termination
Date" under and as defined in the US Credit Agreement.
"US Commitments" means the "Commitments" under and as defined in the US
Credit Agreement.
"US Credit Agreement" means that certain Credit Agreement dated as of
March 30, 2004, among US Borrowers, the other Credit Parties, US Agent and US
Lenders.
"US Dollars" or "US$" means lawful currency of the United States of
America.
"US Guaranty" means that certain Guaranty of even date herewith
executed by each Credit Party (other than Borrowers) in favor of Agent, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"US Lender" and "US Lenders" means "Lender" and "Lenders,"
respectively, under and as defined in the US Credit Agreement.
"US Loans" means the "Loans" under and as defined in the US Credit
Agreement.
"US Loan Documents" means the "Loan Documents" under and as defined in
the US Credit Agreement.
"US Obligations" means the "Obligations" under and as defined in the US
Credit Agreement.
"US Revolving Loan" means the "Revolving Loan" under and as defined in
the US Credit Agreement.
"US Revolving Loan Commitment" means the "Revolving Loan Commitment"
under and as defined in the US Credit Agreement.
"US Swing Line Loan" means the "Swing Line Loan" under and as defined
in the US Credit Agreement.
"Weekly Reporting Activation Event" means any time prior to the
occurrence of a Daily Reporting Activation Event at which either (a) an Event of
Default has occurred or (b) Borrowers and US Borrowers have aggregate Liquidity
of less than US$10,000,000.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in ANNEX G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the PPSA to the
extent the same are used or defined therein. Unless otherwise specified,
references in the Agreement or any of the Appendices to a Section, subsection or
clause refer to such Section, subsection or clause as contained in the
Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
A-27
CREDIT AGREEMENT
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-28
CREDIT AGREEMENT
ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time prior
to the Commitment Termination Date, upon the request of Borrower Representative
on behalf of the applicable Borrower and for such Borrower's account, Letter of
Credit Obligations by causing Letters of Credit to be issued by GE Capital
Canada or a Subsidiary thereof or a bank or other legally authorized Person
selected by or acceptable to Agent in its sole discretion (each, an "L/C
Issuer") for such Borrower's account and guaranteed by Agent; provided, that if
the L/C Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Agent but rather each Revolving Lender shall, subject to the terms
and conditions hereinafter set forth, purchase (or be deemed to have purchased)
risk participations in all such Letters of Credit issued with the written
consent of Agent, as more fully described in PARAGRAPH (b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the least of (i) TEN MILLION US DOLLARS (US$10,000,000) or the Equivalent
Amount in Canadian Dollars (the "L/C Sublimit"), and (ii) the Maximum Amount
less the aggregate outstanding principal balance of (A) the Revolving Credit
Advances and the Swing Line Loan and (B) the US Revolving Loan and US Swing Line
Loan, and (iii) the Aggregate Borrowing Base less the aggregate outstanding
principal balance of (A) the Revolving Credit Advances and the Swing Line Loan
and (B) the US Revolving Loan and US Swing Line Loan. No such Letter of Credit
shall have an expiry date that is more than one year following the date of
issuance thereof, unless otherwise determined by Agent in its sole discretion
(including with respect to customary evergreen provisions), and neither Agent
nor Revolving Lenders shall be under any obligation to incur Letter of Credit
Obligations in respect of, or purchase risk participations in, any Letter of
Credit having an expiry date that is later than the Commitment Termination Date.
(b) Advances Automatic; Participations.
(i) In the event that Agent or any Revolving
Lender shall make any payment on or pursuant to any Letter of Credit Obligation,
such payment shall then be deemed automatically to constitute a Revolving Credit
Advance to the applicable Borrower under SECTION 1.1(a) regardless of whether a
Default or Event of Default has occurred and is continuing and notwithstanding
any Borrower's failure to satisfy the conditions precedent set forth in SECTION
2, and each Revolving Lender shall be obligated to pay its Pro Rata Share
thereof in accordance with the Agreement. The failure of any Revolving Lender to
make available to Agent for Agent's own account its Pro Rata Share of any such
Revolving Credit Advance or payment by Agent under or in respect of a Letter of
Credit shall not relieve any other Revolving Lender of its obligation hereunder
to make available to Agent its Pro Rata Share thereof, but no Revolving Lender
shall be responsible for the failure of any other Revolving Lender to make
available such other Revolving Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for any
Borrower to incur Revolving Credit Advances as contemplated by PARAGRAPH (b)(i)
above because of an Event of
B-1
CREDIT AGREEMENT
Default described in SECTIONS 8.1(h) or (i) or otherwise or if it shall be
illegal or unlawful for any Revolving Lender to be deemed to have assumed a
ratable share of the reimbursement obligations owed to an L/C Issuer, or if the
L/C Issuer is a Revolving Lender, then (i) immediately and without further
action whatsoever, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation equal to such Revolving Lender's Pro Rata
Share (based on the Revolving Loan Commitments) of the Letter of Credit
Obligations in respect of all Letters of Credit then outstanding and (ii)
thereafter, immediately upon issuance of any Letter of Credit, each Revolving
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation in such Revolving Lender's Pro Rata Share (based on the Revolving
Loan Commitments) of the Letter of Credit Obligations with respect to such
Letter of Credit on the date of such issuance. Each Revolving Lender shall fund
its participation in all payments or disbursements made under the Letters of
Credit in the same manner as provided in the Agreement with respect to Revolving
Credit Advances.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement,
including SECTION 8.2, prior to the Commitment Termination Date, each Borrower
will pay to Agent for the ratable benefit of itself and Revolving Lenders cash
or cash equivalents acceptable to Agent ("Cash Equivalents") in an amount equal
to 105% of the maximum amount then available to be drawn under each applicable
Letter of Credit outstanding for the benefit of such Borrower. Such funds or
Cash Equivalents shall be held by Agent in a cash collateral account (the "Cash
Collateral Account") maintained at a bank or financial institution acceptable to
Agent. The Cash Collateral Account shall be in the name of the applicable
Borrower and shall be pledged to, and subject to the control of, Agent, for the
benefit of Agent and Lenders, in a manner satisfactory to Agent. Each Borrower
hereby pledges and grants to Agent, on behalf of itself and Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due. The Agreement, including this ANNEX B,
shall constitute a security agreement under applicable law.
(ii) If any Letter of Credit Obligations, whether
or not then due and payable, shall for any reason be outstanding on the
Commitment Termination Date, Borrowers shall either (A) provide cash collateral
therefor in the manner described above, or (B) cause all such Letters of Credit
and guaranties thereof, if any, to be canceled and returned, or (C) deliver a
stand-by letter (or letters) of credit in guarantee of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor
and duration (plus 30 additional days) as, and in an amount equal to 105% of the
aggregate maximum amount then available to be drawn under, the Letters of Credit
to which such outstanding Letter of Credit Obligations relate and shall be
issued by a Person, and shall be subject to such terms and conditions, as are be
satisfactory to Agent in its sole discretion.
(iii) From time to time after funds are deposited
in the Cash Collateral Account by any Borrower, whether before or after the
Commitment Termination Date, Agent
B-2
CREDIT AGREEMENT
may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, and in such order as Agent may elect, as
shall be or shall become due and payable by such Borrower to Agent and Lenders
with respect to such Letter of Credit Obligations of such Borrower and, upon the
satisfaction in full of all Letter of Credit Obligations of such Borrower, to
any other Obligations of any Borrower then due and payable.
(iv) No Borrower nor any Person claiming on
behalf of or through any Borrower shall have any right to withdraw any of the
funds or Cash Equivalents held in the Cash Collateral Account, except that upon
the termination of all Letter of Credit Obligations and the payment of all
amounts payable by Borrowers to Agent and Lenders in respect thereof, any funds
remaining in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations any remaining
amount shall be paid to Borrowers or as otherwise required by law. Interest
earned on deposits in the Cash Collateral Account shall be held as additional
collateral.
(d) Fees and Expenses. Borrowers agree to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (i) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (ii)
for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "Letter of Credit Fee") in an amount equal to the
Applicable L/C Margin multiplied by the maximum amount available from time to
time to be drawn under the applicable Letter of Credit. Such fee shall be paid
to Agent for the benefit of the Revolving Lenders in arrears, on the first day
of each month and on the Commitment Termination Date. In addition, Borrowers
shall pay to any L/C Issuer, on demand, such fees (including all per annum
fees), charges and expenses of such L/C Issuer in respect of the issuance,
negotiation, acceptance, amendment, transfer and payment of such Letter of
Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations.
Borrower Representative shall give Agent at least two Business Days' prior
written notice requesting the incurrence of any Letter of Credit Obligation. The
notice shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) and a completed Master Agreement for Standby
Letter of Credit or Master Agreement for Documentary Letter of Credit, as
applicable, in the form of EXHIBIT B-1 or B-2, respectively. Notwithstanding
anything contained herein to the contrary, Letter of Credit applications by
Borrower Representative and approvals by Agent and the L/C Issuer may be made
and transmitted pursuant to electronic codes and security measures mutually
agreed upon and established by and among Borrower Representative, Agent and the
L/C Issuer.
(f) Obligation Absolute. The obligation of Borrowers to reimburse
Agent and Revolving Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrowers and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:
B-3
CREDIT AGREEMENT
(i) any lack of validity or enforceability of
any Letter of Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense
or other right that any Borrower or any of its Affiliates or any Lender may at
any time have against a beneficiary or any transferee of any Letter of Credit
(or any Persons or entities for whom any such transferee may be acting), Agent,
any Lender, or any other Person, whether in connection with the Agreement, the
Letter of Credit, the transactions contemplated herein or therein or any
unrelated transaction (including any underlying transaction between any Borrower
or any of its Affiliates and the beneficiary for which the Letter of Credit was
procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Agent (except as otherwise
expressly provided in PARAGRAPH (g)(ii)(c) below) or any L/C Issuer under any
Letter of Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document that does not comply with the terms of such Letter
of Credit or such guaranty;
(v) any other circumstance or event whatsoever,
that is similar to any of the foregoing; or
(vi) the fact that a Default or an Event of
Default has occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere
provided in the Agreement, Borrowers hereby agree to pay and to protect,
indemnify, and save harmless Agent and each Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal counsel)
that Agent or any Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or guaranty thereof, or
(B) the failure of Agent or any Lender seeking indemnification or of any L/C
Issuer to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, in
each case other than to the extent solely as a result of the gross negligence or
willful misconduct of Agent or such Lender (as finally determined by a court of
competent jurisdiction).
(ii) As between Agent and any Lender and
Borrowers, Borrowers assume all risks of the acts and omissions of, or misuse of
any Letter of Credit by beneficiaries of any Letter of Credit. In furtherance
and not in limitation of the foregoing, to the fullest extent permitted by law
neither Agent nor any Lender shall be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or
B-4
CREDIT AGREEMENT
assign any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or ineffective for
any reason; (C) failure of the beneficiary of any Letter of Credit to comply
fully with conditions required in order to demand payment under such Letter of
Credit; provided, that in the case of any payment by Agent under any Letter of
Credit or guaranty thereof, Agent shall be liable to the extent such payment was
made solely as a result of its gross negligence or willful misconduct (as
finally determined by a court of competent jurisdiction) in determining that the
demand for payment under such Letter of Credit or guaranty thereof complies on
its face with any applicable requirements for a demand for payment under such
Letter of Credit or guaranty thereof; (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they may be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a payment under any Letter
of Credit or guaranty thereof or of the proceeds thereof; (G) the credit of the
proceeds of any drawing under any Letter of Credit or guaranty thereof; and (H)
any consequences arising from causes beyond the control of Agent or any Lender.
None of the above shall affect, impair, or prevent the vesting of any of Agent's
or any Lender's rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to
limit or to expand any waivers, covenants or indemnities made by Borrowers in
favor of any L/C Issuer in any letter of credit application, reimbursement
agreement or similar document, instrument or agreement between or among
Borrowers and such L/C Issuer, including a Master Agreement for Documentary
Letter of Credit or a Master Agreement for Standby Agreement entered into with
Agent.
B-5
CREDIT AGREEMENT
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Each Credit Party shall, and shall cause its Subsidiaries to, establish
and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
each Borrower and Subsidiary Guarantor shall (i) establish and maintain one or
more blocked accounts in such Borrower's name or any such Subsidiary's name
("Blocked Accounts") identified in DISCLOSURE SCHEDULE (3.19) at the banks
corresponding thereto (each, a "Relationship Bank") and (ii) deposit and cause
its Subsidiaries to deposit or cause to be deposited promptly, and in any event
no later than the first Business Day after the date of receipt thereof, all
cash, checks, drafts or other similar items of payment relating to or
constituting payments made in respect of any and all Collateral (whether or not
otherwise delivered to a Lock Box as provided in PARAGRAPH (j) below) into the
Blocked Accounts.
(b) Agent shall, from time to time with respect to Borrowers,
deposit into the Blocked Accounts proceeds of Revolving Credit Advances and
Swing Line Advances made to Borrowers pursuant to SECTION 1.1 for use by such
Borrower solely in accordance with the provisions of SECTION 1.4; provided, that
following Agent's delivery of an Activation Note (as defined below), each
Borrower shall maintain, in its name, an account (each a "Disbursement Account"
and collectively, the "Disbursement Accounts") at a bank reasonably acceptable
to Agent into which Agent shall, from time to time with respect to Borrowers,
deposit proceeds of Revolving Credit Advances and Swing Line Advances made to
Borrowers pursuant to SECTION 1.1 for use by such Borrower solely in accordance
with the provisions of SECTION 1.4.
(c) On or before the Closing Date each Relationship Bank shall
have entered into tri-party blocked account agreements with Agent, for the
benefit of itself and Lenders, and the applicable Credit Party, in form and
substance reasonably acceptable to Agent, which shall become operative on or
prior to the Closing Date. Each such blocked account agreement shall provide,
among other things, that (i) all items of payment deposited in such account and
proceeds thereof deposited in the applicable deposit account are held by such
bank as agent or bailee-in-possession for Agent, on behalf of itself and
Lenders, (ii) the bank executing such agreement has no rights of setoff or
recoupment or any other claim against such account, as the case may be, other
than for payment of its service fees and other charges directly related to the
administration of such account and for returned checks or other items of
payment, and (iii) from and after the receipt of notice (an "Activation Notice")
from Agent (which Activation Notice may be given by Agent at any time at which a
Dominion Activation Event has occurred), to forward immediately all amounts in
each Blocked Account to the Collection Account through daily sweeps from such
Blocked Account into the Collection Account.
(d) So long as no Default or Event of Default has occurred and is
continuing, Borrowers may amend DISCLOSURE SCHEDULE (3.19) to add or replace a
Relationship Bank, Lock
C-1
CREDIT AGREEMENT
Box (if any) or Blocked Account, or to replace any Disbursement Account (if
any); provided, that (i) Agent shall have consented in writing in advance to the
opening of such account or Lock Box with the relevant bank and (ii) prior to the
time of the opening of such account or Lock Box, the applicable Borrower or its
Subsidiaries, as applicable, and such bank shall have executed and delivered to
Agent a tri-party blocked account agreement, in form and substance reasonably
satisfactory to Agent. Borrowers shall close any of their accounts (and
establish replacement accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days following notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent's reasonable judgment, or as promptly as practicable and in any event
within 60 days following notice from Agent that the operating performance, funds
transfer or availability procedures or performance with respect to accounts or
Lock Boxes of the bank holding such accounts or Agent's liability under any
tri-party blocked account agreement with such bank is no longer acceptable in
Agent's reasonable judgment.
(e) The Lock Boxes (if any), Blocked Accounts and Disbursement
Accounts (if any) shall be cash collateral accounts, with all cash, checks and
other similar items of payment in such accounts securing payment of the Loans
and all other Obligations, and in which each Borrower and each Subsidiary
thereof shall have granted a Lien to Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with SECTION 1.10 and shall be applied
(and allocated) by Agent in accordance with SECTION 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Each Borrower and each Subsidiary Guarantor shall and shall
cause its Affiliates, officers, employees, agents, directors or other Persons
acting for or in concert with such Borrower (each a "Related Person") to (i)
hold in trust for Agent, for the benefit of itself and Lenders, all checks, cash
and other items of payment received by such Borrower or any such Related Person,
and (ii) within one Business Day after receipt by such Borrower or any such
Related Person of any checks, cash or other items of payment, deposit the same
into a Blocked Account of such Borrower . Each Borrower on behalf of itself and
each Related Person thereof acknowledges and agrees that all cash, checks or
other items of payment constituting proceeds of Collateral are part of the
Collateral. All proceeds of the sale or other disposition of any Collateral,
shall be deposited directly into the applicable Blocked Accounts.
(h) Notwithstanding the other provisions of this ANNEX C, Details
may maintain a separate deposit account (the "JPMorgan Account") at JPMorgan
Chase Bank designated as the "JPMorgan Chase Dynamic Details L/C Cash Collateral
Account" and further described in DISCLOSURE SCHEDULE (3.19). The JPMorgan
Account will not be subject to a Control Letter in favor of Agent, but will at
all times be subject to the Cash Collateral Agreement between Details and
JPMorgan Chase Bank dated as of March 29, 2004 (the "Cash Collateral
Agreement"). The balance of the JPMorgan Account shall in no event exceed the
principal sum of US$486,150 plus any interest earned thereon. Details agrees
that it will instruct JPMorgan Chase Bank to deposit any amounts released to it
from the JPMorgan Account directly into the Concentration Account. Within ten
Business Days of the termination of the Cash Collateral Agreement, Details shall
C-2
CREDIT AGREEMENT
cause the JPMorgan Account to be closed, and will deliver to Agent evidence of
such closure in form and substance acceptable to Agent.
(i) At all times after Agent has delivered an Activation Notice,
except at any time when there are no outstanding Revolving Credit Advances, no
Borrower shall, or shall permit any of its Subsidiaries to, accumulate or
maintain cash in Disbursement Accounts or payroll accounts as of any date of
determination in excess of the aggregate amount of checks outstanding against
such accounts as of that date, plus amounts necessary to meet Relationship
Bank-imposed minimum balance requirements, plus US$50,000 or the Equivalent
Amount in Canadian Dollars.
(j) Notwithstanding the provisions of PARAGRAPH (a) above, within
10 Business Days of Agent's delivery of an Activation Notice, Borrower shall
establish and maintain lock boxes ("Lock Boxes") and shall request in writing
and otherwise take such reasonable steps to ensure that all Account Debtors
forward payment directly to such Lock Boxes.
C-3
CREDIT AGREEMENT
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
SCHEDULE OF DOCUMENTS
[SEE ATTACHED]
D-1
CREDIT AGREEMENT
ANNEX E (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrowers shall deliver or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within 30 days after
the end of each Fiscal Month, the financial information set forth in PARAGRAPH
(a) of ANNEX E to the US Credit Agreement.
(b) Quarterly Financials. To Agent and Lenders, within 45 days
after the end of each of the first three Fiscal Quarters in any Fiscal Year, the
financial information set forth in PARAGRAPH (b) of ANNEX E to the US Credit
Agreement.
(c) Operating Plan. To Agent and Lenders, as soon as available,
but not later than 45 days after the end of each Fiscal Year, the annual
operating plan set forth in PARAGRAPH (c) of ANNEX E to the US Credit Agreement.
(d) Annual Audited Financials. To Agent and Lenders:
(1) within 111 days after the end of each Fiscal Year,
the financial information set forth in PARAGRAPH (d)(1) of ANNEX E to the US
Credit Agreement; and
(2) within 97 days after the end of each Fiscal Year, the
financial information set forth in PARAGRAPH (d)(2) of ANNEX E to the US Credit
Agreement.
(e) Management Letters. To Agent and Lenders, within 5 Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent certified public accountants or auditors.
(f) Default Notices. To Agent and Lenders, as soon as practicable,
and in any event within 5 Business Days after an executive officer of Parent or
any Borrower has actual knowledge of the existence of any Default, Event of
Default or other event that has had a Material Adverse Effect, telephonic or
telecopied notice specifying the nature of such Default or Event of Default or
other event, including the anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by Parent or any Credit
Party to its security holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by Parent or any Credit
Party with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority; and (iii) all
press releases and other statements
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CREDIT AGREEMENT
made available by Parent or any Credit Party to the public concerning material
changes or developments in the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by Parent
or any Credit Party with respect to any Subordinated Debt or Stock of such
Person, and, as soon as practicable and in any even within five days after
Parent or any Credit Party obtains knowledge of any matured or unmatured event
of default with respect to any Subordinated Debt, notice of such event of
default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by SECTION 5.6.
(j) Litigation. To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against Parent or any
Credit Party that (i) seeks damages in excess of US$500,000 or the Equivalent
Amount in Canadian Dollars, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets or against Parent or
any Credit Party or ERISA Affiliate in connection with any Plan, (iv) alleges
criminal misconduct by Parent or any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities; or (vi) involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or
casualties required by SECTION 5.4.
(l) Lease Default Notices. To Agent, (i) within two Business Days
after receipt thereof, copies of any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, (ii) monthly within 3 Business Days after payment thereof, evidence of
payment of lease or rental payments as to each leased or rented location for
which a landlord or bailee waiver has not been obtained and (iii) such other
notices or documents as Agent may reasonably request.
(m) Good Standing Certificates. Not less frequently than once
during each calendar quarter, each Borrower and Subsidiary Guarantor shall,
unless Agent shall otherwise consent, provide to Agent a certificate of good
standing from its jurisdiction of organization.
(n) Other Documents. To Agent and Lenders, such other financial
and other information respecting Parent's or any Credit Party's business or
financial condition as Agent or any Lender shall, from time to time, reasonably
request.
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CREDIT AGREEMENT
ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrowers shall deliver or cause to be delivered the following:
(a) To Agent, upon its request, and in any event no less
frequently than noon (Toronto time) on the fifth Business Day of each Fiscal
Month, each of the following reports, each of which shall be prepared by the
applicable Borrower as of the last day of the immediately preceding Fiscal
Month, or the date that is two days prior to the date of any such request
(provided, that (1) upon the occurrence of a Weekly Reporting Activation Event,
such reports will be delivered on Wednesday of each week and prepared as of the
last day of the immediately preceding week, and (2) upon the occurrence of a
Daily Reporting Activation Event, in addition to the weekly reporting
requirements in CLAUSE (1) above, reports regarding sales, collections, credits
and charge-backs will be delivered on each Business Day and prepared as of the
immediately preceding Business Day):
(i) a Borrowing Base Certificate with respect to
each Borrowing Base, in each case accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable
discretion;
(ii) with respect to each Borrower, a monthly
trial balance showing Accounts outstanding aged from invoice date as
follows: 1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or
more, accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion; and
(iii) with respect to each Borrower, collateral
reports (including all additions and reductions, cash and non-cash)
with respect to Accounts of such Borrower, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent
in its reasonable discretion;
(b) To Agent, at the time of delivery of each of the monthly
Financial Statements delivered pursuant to ANNEX E:
(i) a reconciliation of the Accounts trial
balance to the most recent Borrowing Base Certificate, general ledger
and monthly Financial Statements delivered pursuant to ANNEX E, in each
case accompanied by such supporting detail and documentation as shall
be requested by Agent in its reasonable discretion,
(ii) an aging of accounts payable and a
reconciliation of such accounts payable aging to each Borrower's
general ledger and monthly Financial Statements delivered pursuant to
ANNEX E, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
discretion, and
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CREDIT AGREEMENT
(iii) a reconciliation of the outstanding Loans as
set forth in the monthly Loan Account statement provided by Agent to
each Borrower's general ledger and monthly Financial Statements
delivered pursuant to ANNEX E, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in
its reasonable discretion; and
(iv) with respect to each Borrower, a summary of
Inventory by division, by location, and by type (i.e., raw materials,
work in process and finished goods), in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in
its reasonable discretion;
(c) To Agent, at the time of delivery of each of the quarterly
Financial Statements delivered pursuant to ANNEX E, (i) a listing of government
contracts of each Borrower subject to the Financial Administration Act (Canada)
or The Federal Assignment of Claims Act of 1940; and (ii) a list of any
applications for the registration of any Patent, Trademark or Copyright filed by
any Credit Party with the Canadian Intellectual Property Office, the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in the prior Fiscal Quarter;
(d) Each Borrower, at its own expense, shall deliver to Agent the
results of each physical verification, if any, that such Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other Person to
have made on their behalf, and delivered to the controller or chief financial
officer of such Borrower, of all or any portion of their Inventory (and, if a
Default or an Event of Default has occurred and is continuing, each Borrower
shall, upon the request of Agent, conduct, and deliver the results of, such
physical verifications as Agent may require);
(e) Each Borrower, at its own expense, shall deliver to Agent such
appraisals of its assets as 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 reasonably
satisfactory to Agent; and
(f) Such other reports, statements and reconciliations with
respect to the Borrowing Base or Collateral or Obligations of any or all Credit
Parties as Agent shall from time to time request in its reasonable discretion.
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CREDIT AGREEMENT
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) Maximum Capital Expenditures. Details and its Subsidiaries on
a consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods:
Period Maximum Capital Expenditures
------ ----------------------------
6 Fiscal Months Ending 6/30/04 US$ 5,000,000
6 Fiscal Months Ending 12/31/04 US$ 6,500,000
6 Fiscal Months Ending 6/30/05 US$ 9,000,000
6 Fiscal Months Ending 12/31/05 US$11,500,000
6 Fiscal Months Ending 6/30/06 US$14,000,000
6 Fiscal Months Ending 12/31/06 and each
6/30 and 12/31 thereafter US$16,000,000
(b) Minimum Fixed Charge Coverage Ratio. Details and its
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter, beginning with the Fiscal Quarter ending June 30, 2004, a Fixed Charge
Coverage Ratio for the 12-month period then ended (or with respect to the Fiscal
Quarters ending on or before December 31, 2004, the period commencing on April
1, 2004, and ending on the last day of such Fiscal Quarter) of not less than
1.10:1.0.
Unless otherwise specifically provided herein, any accounting term used
in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, that the agreement of Requisite Lenders to any required amendments of
such provisions shall be sufficient to bind all Lenders. "Accounting Changes"
means (i) changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by (A) the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants, as
applicable, or (B) the Canadian Institute of Chartered Accountants (or, in
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CREDIT AGREEMENT
either case, any successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDA in such period. If Agent,
Borrowers and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Borrowers and Requisite
Lenders cannot agree upon the required amendments within 30 days following the
date of implementation of any Accounting Change, then all Financial Statements
delivered and all calculations of financial covenants and other standards and
terms in accordance with the Agreement and the other Loan Documents shall be
prepared, delivered and made without regard to the underlying Accounting Change.
For purposes of SECTION 8.1, a breach of a Financial Covenant contained in this
ANNEX G shall be deemed to have occurred as of any date of determination by
Agent or as of the last day of any specified measurement period, regardless of
when the Financial Statements reflecting such breach are delivered to Agent.
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CREDIT AGREEMENT
ANNEX H (SECTION 9.9(a))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: GE Canada Finance Holding Company
Bank Name: Royal Bank of Canada
Bank: 0000000
Branch: 00000
XXX #: 000000000
Account #: 0000000 (Canadian Dollars), OR
4050621 (US Dollars)
Account Name: GECC1 COMM FIM
Reference: CFI 1250 (DDi Canada)
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CREDIT AGREEMENT
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital Canada,
at c/o GE Capital Commercial Finance, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Account Manager (DDi)
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with copies to:
Winston & Xxxxxx LLP
38th Floor, 000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxxx 0
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Counsel-Commercial Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(B) If to any Credit Party, to Borrower Representative at
Dynamic Details, Incorporated
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Mr., Xxxx Xxxxxx, VP-Finance and Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With copies to:
Xxxxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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CREDIT AGREEMENT
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Lender(s):
GE Canada Finance Holding Company
Revolving Loan Commitment
(including a Swing Line Commitment
of US$4,000,000 or the Equivalent
Amount in Canadian Dollars): US$40,000,000 (or the Equivalent Amount
in Canadian Dollars
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CREDIT AGREEMENT
