EXHIBIT 3
INTERTAPE POLYMER INC.
- and -
INTERTAPE POLYMER CORP.
- and -
EACH OF THE OTHER PARTIES LISTED IN SCHEDULE "K" HERETO
AS JOINT AND SEVERAL FACILITY A BORROWERS
- and -
IPG HOLDINGS LP,
AS FACILITY B/C BORROWER
-and-
INTERTAPE POLYMER GROUP INC.
IPG FINANCE LLC AND
IPG HOLDING COMPANY OF NOVA SCOTIA
AS GUARANTORS
- and -
THE TORONTO-DOMINION BANK, AS
CANADIAN ADMINISTRATION AGENT, CANADIAN COLLATERAL AGENT, LENDER,
SWING LINE LENDER AND ISSUING LENDER
TORONTO DOMINION (TEXAS), INC., AS US ADMINISTRATION AGENT
- and -
COMERICA BANK, AS
LENDER, ISSUING LENDER AND CO-ARRANGER
- and -
NATIONAL BANK OF CANADA, AS
LENDER, CO-ARRANGER AND DOCUMENTATION AGENT
- and -
TD SECURITIES, AS
LEAD ARRANGER AND BOOKMANAGER
--------------------------------------------------------------------------------
CREDIT AGREEMENT
bearing formal date of December 20, 2001
US $145,000,000
--------------------------------------------------------------------------------
XXXXXX XXXXXXX
1250 Xxxx Xxxxxxxx Blvd. West
Suite 2500
Montreal (Quebec) H3B 4Y1
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
CREDIT AGREEMENT entered into in the City of New York, State of New York dated
as of December 20, 2001
BETWEEN: INTERTAPE POLYMER INC., a corporation constituted
in accordance with the laws of Canada, having its
principal place of business at 110E Xxxxxx xx
Xxxxxx, in the City of St. Laurent, Province of
Quebec
AND: INTERTAPE POLYMER CORP., a corporation constituted
in accordance with the laws of the State of
Delaware, having its principal place of business
at 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxx, 00000
AND: EACH OF THE OTHER PARTIES LISTED IN SCHEDULE "K"
HERETO
(hereinafter collectively called the "FACILITY A
BORROWERS")
PARTIES OF THE FIRST PART
AND: IPG HOLDINGS LP, a limited partnership constituted
in accordance with the laws of the State of
Delaware, having its registered office c/o RL&F
Service Corp, One Xxxxxx Square, Tenth floor,
Tenth and King Streets, in the City of Wilmington,
State of Delaware, represented herein by its
general partner, Intertape Polymer Inc., having
its principal place of business at 110E Xxxxxx xx
Xxxxxx, in the City of St. Laurent, Province of
Quebec (hereinafter called the "FACILITY B/C
BORROWER")
PARTY OF THE SECOND PART
AND: INTERTAPE POLYMER GROUP INC., a corporation
constituted in accordance with the laws of Canada,
having its principal place of business at 110E
Xxxxxx xx Xxxxxx, in the City of St. Laurent,
Province of Quebec
AND: IPG FINANCE LLC, a limited liability company
constituted in accordance with the laws of the
State of Delaware, having its principal place of
business at registered office at c/o RL&F Service
Corp, One Xxxxxx Square, Tenth floor, Tenth and
King Streets, in the City of Wilmington, State of
Delaware
2
AND: IPG HOLDING COMPANY OF NOVA SCOTIA, a corporation
constituted in accordance with the laws of Nova
Scotia, having its principal place of business at
110 Xxxxxx xx Xxxxxx, in the City of St. Laurent,
Province of Quebec,
(as Guarantors)
PARTIES OF THE THIRD PART
AND: THE TORONTO-DOMINION BANK, a banking corporation
organized under the laws of Canada, having an
office at 00 Xxxxxxxxxx Xxxxxx Xxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0, acting as Canadian
administration agent, Canadian Collateral Agent,
Lender, Swing Line Lender and Issuing Lender
(hereinafter called "TD")
PARTY OF THE FOURTH PART
AND: TORONTO DOMINION (TEXAS), INC., a banking
corporation organized under the laws of Delaware,
having an office at 000 Xxxxxx Xxxxxx, Xxxxx 0000,
in the City of Houston, State of Texas, 77010,
acting as US administration agent (hereinafter
called "TD TEXAS")
PARTY OF THE FIFTH PART
AND: COMERICA BANK, a banking corporation organized
under the laws of Michigan, having an office at
000 Xxxxxxxx Xxxxxx, 00xx Floor, in the City of
Detroit, Michigan, acting as Lender and
Co-Arranger (hereinafter called "COMERICA")
PARTY OF THE SIXTH PART
AND: NATIONAL BANK OF CANADA, a banking corporation
organized under the laws of Canada, having an
office at 0000 Xxxxxxxx Xxxxxx, 5th Floor in the
City of Xxxxxxxx, Xxxxxx, X0X 0X0, acting as
Lender, Co-Arranger and Documentation Agent
(hereinafter called "NBC")
PARTY OF THE SEVENTH PART
3
WHEREAS the Borrowers wish to borrow certain amounts from the Lenders
and the Lenders have agreed to lend such amounts to the Borrowers, subject to
and in accordance with the provisions hereof;
NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
1 INTERPRETATION
1.1 DEFINITIONS
In addition to the definitions contained in Schedule D, the following
words and expressions, when used in this Agreement, in the Schedules
hereto or in any deed or agreement supplementary hereto, unless the
contrary is stipulated, have the following meaning:
1.1.1 "ACQUISITION" means the acquisition (whether by way of
purchase, exchange, Investment or otherwise) of (i) a majority of
the issued and outstanding capital stock or other ownership
interests of a Person (other than a member of the Restricted
Group) granting a right to vote in all circumstances, or (ii)
assets of a Person (other than a member of the Restricted Group)
comprising substantially all of the assets of such Person or of
an independent business unit (for example, a division) operated
by such Person;
1.1.2 "ADJUSTED CONSOLIDATED" shall have the same meaning as
"Consolidated" except that the Unrestricted Subsidiaries are
accounted for on a cost basis rather than on a Consolidated
basis;
1.1.3 "ADVANCE" means any advance by any Lender under this
Agreement, including direct Advances by way of Prime Rate
Advances, US Base Rate Advances, US Prime Rate Advances and Libor
Advances and, for Facility A only, direct Advances by way of
Swing Line Advances and indirect Advances by way of BA Advances
and Letters of Credit, and any renewal or conversion of an
Advance;
1.1.4 "AFFILIATE" means any Person (other than a Restricted
Subsidiary) (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, IPG, (ii) which beneficially owns or holds 5% or
more of the Voting Stock of IPG or (iii) 5% or more of the Voting
Stock (or in the case of a Person which is not a corporation, 5%
or more of the equity interest) of which is beneficially owned or
held by IPG or a Subsidiary. The term "control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract or
otherwise;
1.1.5 "AGENT" means either the Canadian Agent, the US Agent or
(unless the context requires otherwise) both, as the case may be,
determined by reference to the provisions of Section 18.19;
4
1.1.6 "AGREEMENT", "CREDIT AGREEMENT", "THESE PRESENTS",
"HEREIN", "HEREBY", "HEREUNDER" and other similar expressions
refer collectively to this Credit Agreement and the Schedules
hereto;
1.1.7 "ARRANGERS" means TD, Comerica and NBC;
1.1.8 "ASSIGNMENT" means an assignment of all or a portion of a
Lender's rights, benefits and obligations under this Agreement in
respect of any Facilities in accordance with Sections 17.2 and
17.3, and "ASSIGNEE" has the meaning ascribed to it in subsection
17.2.1;
1.1.9 "AVAILABLE CASH" means, as of any date of determination,
cash and Cash Equivalents which are freely available to the
Restricted Group on such date, in that there are no restrictions
of any nature whatsoever on the Restricted Group's access thereto
including any restrictions or potential delays arising out of any
(i) agreement, (ii) incorporating, constituting or charter
documents, (iii) foreign exchange or currency controls, (iv) Law,
(v) Charge, or (vi) otherwise. For purposes of the computation of
Total Debt, Available Cash shall not include cash and Cash
Equivalents held in Drumheath;
1.1.10 "BANKERS' ACCEPTANCE" means a non-interest bearing draft
or xxxx of exchange in Canadian Dollars drawn and endorsed by a
Canadian Borrower and accepted by a Lender in accordance with the
provisions of Article 6, and includes a Discount Note where the
context permits. Subject to the Lenders electing to use a
clearing house as contemplated by the Depository Bills and Notes
Act (S.C. 1998 c. 13) (the "Act"), "Bankers' Acceptance" shall
also include a depository xxxx (as defined in the Act) in
Canadian Dollars signed by a Canadian Borrower and accepted by a
Canadian Lender. Drafts or bills of exchange that become
depository bills may nevertheless be referred to herein as
"drafts";
1.1.11 "BA ADVANCE" means at any time the part of the Advances
which a Canadian Borrower has chosen to borrow by Bankers'
Acceptances, calculated based on the face amount of such Bankers'
Acceptances;
1.1.12 "BA PROCEEDS" means, (i) for any Bankers' Acceptance
issued hereunder (other than Discount Notes), an amount
calculated on the applicable Acceptance Date (as defined in
subsection 6.1.1) by multiplying: a) the face amount of the
Bankers' Acceptance by b) the following fraction:
1
--------------------------------------------------------------
(1+ (Bankers' Acceptance Discount Rate x Designated Period (in
days) (365))
, with such fraction being rounded up or down to the fifth
decimal place and .00005 being rounded up; and (ii) for any
Discount Notes issued hereunder, the face amount of such Discount
Notes, less a discount established in the same manner as provided
5
in (i) above (with references to "Bankers' Acceptances" being
replaced by references to "Discount Notes");
1.1.13 "BA SCHEDULE I REFERENCE LENDER" means TD or such other
Lender which is a Schedule I bank under the Bank Act (Canada)
appointed by the Canadian Agent with the consent of the Facility
A Borrowers in replacement of said Lender;
1.1.14 "BA SCHEDULE II REFERENCE LENDER" means a Lender which is
a Schedule II bank under the Bank Act (Canada) appointed by the
Canadian Agent with the consent of the Facility A Borrowers;
1.1.15 "BANKERS' ACCEPTANCE DISCOUNT RATE" means (i) in respect
of Bankers' Acceptances to be purchased by the Canadian Lenders
which are Schedule I banks under the Bank Act (Canada), the
average rate for Canadian Dollar bankers' acceptances having
Designated Periods of 1, 2, 3 or 6 months quoted on Reuters
Service, page CDOR "Canadian Interbank Bid BA Rates" (the "CDOR
RATE"), having an identical Designated Period to that of the
Bankers' Acceptance to be issued on such day, and (ii) in respect
of Bankers' Acceptances to be purchased by the Canadian Lenders
which are Schedule II and Schedule III banks under the Bank Act
(Canada) and in respect of Canadian Lenders lending by way of
Discount Notes, the rate for Canadian Dollar bankers' acceptances
quoted by the BA Schedule II Reference Lender, provided that such
rate may not exceed the rate determined under clause (i) by more
than 10 basis points (.10%) (in each of cases (i) and (ii), the
"DISCOUNT RATES"). In all cases, the Discount Rates shall be
quoted at approximately 10:00 a.m. (Toronto time) on the
Acceptance Date calculated on the basis of a year of 365 days.
In the absence of any such quote, the Bankers' Acceptance
Discount Rate which would have been determined in accordance with
clause (i) or clause (ii) above, respectively, shall be equal to
the rate determined from time to time by the Agent as being the
discount rate for bankers' acceptances of
(A) in the case of clause (i), the BA Schedule I Reference
Lender; and
(B) in the case of clause (ii), the BA Schedule I Reference
Lender plus 10 basis points (.10%),
calculated on the basis of a year of 365 days, established in
accordance with their normal practices at 10:00 a.m. on the
Acceptance Date, for bankers' acceptances accepted by the BA
Schedule I Reference Lender in amounts equal to the amount of the
BA Advances to be made that day by the BA Schedule I Reference
Lender, having an identical Designated Period to that of the
proposed Bankers' Acceptances to be issued on such day, provided
that the Bankers' Acceptance Discount Rate replacing the rate
which would have been determined under clause (ii) above shall
not exceed the Bankers' Acceptance Discount Rate which would have
been determined in accordance with clause (i) above by more than
10 basis points (.10%);
6
1.1.16 "BORROWERS" means collectively the Facility A Borrowers
and the Facility B/C Borrower, and "Borrower" means any or each
of them, as the context may require. "Canadian Borrowers" means
those Facility A Borrowers whose names appear from time to time
in Section 1 of Schedule "K" and "U.S. Borrowers" means all
Borrowers other than Canadian Borrowers;
1.1.17 "BORROWING BASE" means the aggregate, without duplication,
of;
1.1.17.1 80% of the Eligible Trade Receivables; and
1.1.17.2 50% of the Eligible Inventory; and
1.1.17.3 33% of the Eligible Raw Materials, but in any event
not exceeding US$10,000,000;
based on the most recent inventory, accounts receivable and raw
materials listing provided to the Agent in accordance with
subsection 13.16.3(d). Notwithstanding the foregoing, (a)
accounts receivable and inventory which would otherwise be
considered Eligible Trade Receivables, Eligible Raw Materials and
Eligible Inventory shall only be included if such accounts
receivable, raw materials and inventory are subject to valid and
enforceable Charges in favour of the Canadian Collateral Agent or
the US Collateral Agent, of the nature and priority contemplated
by the Inter-Creditor Agreement and the Security Documents under
Facility A (but subject to the provisions of Section 10.3 hereof
with regard to any Release Period); (b) there shall be deducted
from the Borrowing Base amounts, whether or not due, which are
secured by Charges, whether or not Permitted Charges, on the
assets of the Restricted Group ranking prior to the Security
under Facility A, such as deductions at source and other fiscal
debts, as well as the aggregate liability of the Restricted Group
referred to in Section 12.15 in respect of which a Charge has
actually arisen; and (c) the amount of Eligible Inventory plus
Eligible Raw Materials shall not exceed 40 % of the total
Borrowing Base;
1.1.18 "BRANCH" means the office of the Agent located at, for the
US Agent, 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, 00000, and, for
the Canadian Agent, at 000 Xx.Xxxxxxx, Xxxxxxxx, Xxxxxx, X0X 0X0,
or any other offices designated by the applicable Agent from time
to time by written notice to the Borrowers;
1.1.19 "BUSINESS DAY" means any day, except Saturdays, Sundays
and other days which in Xxx Xxxx, Xxx Xxxx, Xxxxxx (Xxxxxxx),
Xxxxxxx, Xxxxxxx or Montreal, Quebec, are holidays or a day upon
which banks in any such location are generally not open for
business;
1.1.20 "CANADIAN AGENT" means TD, in its capacity as Canadian
administration agent for all of the Lenders, or any successor
thereof;
7
1.1.21 "CANADIAN COLLATERAL AGENT" means TD or any replacement
thereof agreed upon by the Lenders;
1.1.22 "CANADIAN COLLATERAL TRUSTEE" means Computershare Trust
Company of Canada or its successor duly appointed in accordance
with the provisions of the Inter-Creditor Agreement;
1.1.23 "CANADIAN DOLLAR ADVANCES" means at any time, all Advances
made in Cdn. Dollars, and includes all the BA Advances made, and
all Letters of Credit issued, in Cdn. Dollars;
1.1.24 "CANADIAN ENVIRONMENTAL INDEMNIFICATION AGREEMENT" has the
meaning ascribed thereto in subsection 11.1.22 of this Agreement;
1.1.25 "CANCO" means IPG Holding Company of Nova Scotia and its
successors;
1.1.26 "CAPITALIZED LEASE" means any lease (i) the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of IPG and its Subsidiaries in
accordance with GAAP or (ii) for which the amount of the asset
and liability thereunder if so capitalized is required to be
disclosed in a note to such balance sheet in accordance with
GAAP;
1.1.27 "CAPITALIZED RENTALS" of any Person means, as of the date
of any determination thereof, the amount at which the aggregate
Rentals due and to become due under all Capitalized Leases under
which such Person is then a lessee would be reflected as a
liability on a consolidated balance sheet of such Person as of
such date in accordance with GAAP;
1.1.28 "CASH EQUIVALENTS" means, as of the date of any
determination thereof, Investments of the type described in the
second, third and fourth subsections of the definition of the
term "Permitted Investments" as well as all sums held in bank
accounts;
1.1.29 "CDN. DOLLARS", "CANADIAN DOLLARS" or "CDN. $" means the
lawful currency of Canada;
1.1.30 "CHARGE" means any right to any property, or the income or
benefits flowing therefrom, which secures an obligation due to a
Person or a claim of such Person, whether such right is based on
the common law, statute or contract, and includes any security
interest, hypothec, pledge, pawn, mortgage, prior claim, lien,
charge, assignment for security purposes, cession, encumbrance,
Capitalized Lease, conditional sale or trust receipt or a lease
in which such Person is lessor, or a consignment or bailment for
security purposes. The term "Charge" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and
encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all
similar arrangements) affecting property. For the
8
purposes of this Agreement, each of the members of the Restricted
Group shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person
for security purposes, and such retention or vesting shall
constitute a Charge;
1.1.31 "CLOSING DATE" means December 20, 2001;
1.1.32 "CODE" means the Internal Revenue Code of 1986, as
amended, and any successor statute thereto, together with the
regulations thereunder, in each case as in effect from time to
time;
1.1.33 "COLLATERAL TRUST INDENTURE" means the Collateral Trust
Indenture to be dated the Closing Date, among the Lenders, the
holders of the Notes, certain members of the Restricted Group,
the US Collateral Trustee and the US Collateral Agent, as the
same may be amended, supplemented or otherwise modified from time
to time in accordance with the provisions thereof;
1.1.34 "COMMITMENT" means the portion of the Credit for which
each Lender is responsible, as set out in Schedule "A" hereof;
1.1.35 "CONSOLIDATED" means produced by aggregating the relevant
financial statements or accounts of the Subsidiaries (or other
Persons which, in accordance with GAAP, are to be included in
such computation) of a Person on a line-by-line basis (i.e.:
adding together corresponding items of assets, liabilities,
revenues and expenses) with the relevant financial statements or
accounts of such Person, eliminating inter-company balances and
transactions and providing for any Minority Interests, all as
determined in accordance with GAAP; for greater certainty, all of
the financial covenants contained in Section 13.11 and the other
financial calculations required to be made on a Consolidated
basis hereunder are calculated solely by reference to the
Restricted Group, excluding any items attributable to
Unrestricted Subsidiaries;
1.1.36 "CONSOLIDATED ASSETS" means, as of the date of any
determination thereof, the Consolidated total assets of the
Restricted Group determined as of such date in accordance with
GAAP (excluding, in any event, assets or equity attributable to
Unrestricted Subsidiaries);
1.1.37 "CONSOLIDATED CURRENT LIABILITIES" means as of the date of
any determination thereof, such liabilities of the Restricted
Group on a Consolidated basis as shall be determined in
accordance with GAAP to constitute current liabilities as of such
date (excluding, in any event, liabilities attributable to
Unrestricted Subsidiaries);
1.1.38 "CONSOLIDATED NET INCOME" for any period means the gross
revenues of the Restricted Group for such period less all
expenses and other proper charges (including taxes on income) for
such period, determined on a Consolidated basis and otherwise in
accordance with GAAP after eliminating earnings or losses
attributable to outstanding Minority Interests, but excluding in
any event:
9
1.1.38.1 any gains or losses (i) on the sale or other
disposition of Investments or fixed or capital assets, and
any taxes on such excluded gains and any tax deductions or
credits on account of any such excluded losses or (ii)
attributable to any non-recurring or extraordinary items
including, without limitation, any discontinuance of
operations;
1.1.38.2 the proceeds of any life insurance policy;
1.1.38.3 net earnings and losses of any Restricted
Subsidiary accrued prior to the date it became a Restricted
Subsidiary;
1.1.38.4 net earnings and losses of any Person (other than a
Restricted Subsidiary), substantially all the assets of
which have been acquired in any manner by any member of the
Restricted Group, realized by such Person prior to the date
of such acquisition;
1.1.38.5 net earnings and losses of any Person (other than a
Restricted Subsidiary) with which any member of the
Restricted Group shall have consolidated or which shall have
merged into or with any member of the Restricted Group prior
to the date of such consolidation or merger;
1.1.38.6 net earnings of any Person (other than a Restricted
Subsidiary) in which any member of the Restricted Group has
an ownership interest unless such net earnings shall have
actually been received by any member of the Restricted Group
in the form of cash distributions;
1.1.38.7 any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment
of dividends or interest to any member of the Restricted
Group;
1.1.38.8 earnings resulting from any reappraisal,
revaluation or write-up of assets;
1.1.38.9 any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of
acquisition thereof over the amount invested in such
Subsidiary;
1.1.38.10 any gain arising from the acquisition of any
Securities of any member of the Restricted Group; and
1.1.38.11 any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall
have been
10
made from income or revenues included in the definition of
Consolidated Net Income for such period;
1.1.39 "CONSOLIDATED NET WORTH" means, as of the date of any
determination thereof, the Consolidated total shareholders'
equity of the Restricted Group as of such date, determined on a
Consolidated basis, but in any event excluding any amount of such
shareholders' equity allocable or attributable to (i) Minority
Interests and (ii) all Investments (other than Permitted
Investments) by any member of the Restricted Group;
1.1.40 "CONSOLIDATED TOTAL CAPITALIZATION" means, as of the date
of any determination thereof, the sum of (i) the amount of Total
Debt as of such date, plus (ii) the Consolidated Net Worth as of
such date;
1.1.41 "CONVERSION DATE" means, as of any date of determination,
the later of (i) the 364th day following the Closing Date or (ii)
the last day of the most recent Renewal Period (if any);
1.1.42 "CREDIT" has the meaning ascribed thereto in Section 2.1
hereof;
1.1.43 "DEBT" of any Person means, as of the date of any
determination thereof (without duplication):
1.1.43.1 all Indebtedness for borrowed money or evidenced by
notes, bonds, debentures or similar evidences of
Indebtedness of such Person;
1.1.43.2 the Negative Value of Derivative Instruments of
such Person;
1.1.43.3 obligations secured by any Charge upon property
owned by such Person or created or arising under any
conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding
the fact that the rights and remedies of the seller, lender
or lessor under any such arrangement in the event of default
are limited to repossession or sale of property, including
obligations secured by Charges arising from the sale or
transfer of notes or accounts receivable, but, in all
events, excluding trade payables and accrued expenses
constituting Consolidated Current Liabilities;
1.1.43.4 Capitalized Rentals of such Person;
1.1.43.5 reimbursement obligations in respect of credit
enhancement instruments of such Person including letters of
credit; and
11
1.1.43.6 (without duplication of any of the foregoing)
Guarantees of such Person of obligations of others of the
character referred to hereinabove in this definition;
1.1.44 "DEFAULT" means an event or circumstances, the occurrence
or existence of which would, with the giving of a notice, lapse
of time or combination thereof, constitute an Event of Default
unless remedied within the prescribed period of time or waived in
writing by the Agent, as authorized by the Lenders in accordance
with the provisions hereof;
1.1.45 "DERIVATIVE INSTRUMENT" means an agreement entered into
from time to time by the Facility B/C Borrower in order to
control, fix or regulate currency exchange fluctuations, or the
rate of interest payable, on borrowings under Facility B and/or
Facility C;
1.1.46 "DERIVATIVE OBLIGATIONS" means obligations of a Borrower
to one or more Lenders under Derivative Instruments;
1.1.47 "DESIGNATED PERIOD" means, with respect to a Libor Advance
or BA Advance, a period designated by a Borrower in accordance
with Section 4.2 or 6.1 or 6.4;
1.1.48 "DISCOUNT NOTE" means a non-interest bearing promissory
note denominated in Canadian Dollars issued by a Canadian
Borrower to a Canadian Lender or a participant which is not a
bank or which does not stamp Bankers' Acceptances, such note to
be in the form normally used by such Canadian Lender or
participant;
1.1.49 "DRUMHEATH" means Drumheath Indemnity Ltd. and its
successors;
1.1.50 "EBITDA" means, for any fiscal period, (i) the
Consolidated Net Income of the Restricted Group for such period
plus (ii) to the extent included in the calculation of such
Consolidated Net Income, the Interest Expense, taxes,
depreciation and amortization of the Restricted Group for such
period, each calculated on a Consolidated basis and otherwise in
accordance with GAAP. Notwithstanding the foregoing, "EBITDA OF
THE UNRESTRICTED SUBSIDIARIES" has the same meaning as EBITDA but
shall be calculated in relation to the Unrestricted Subsidiaries
only;
1.1.51 "ELIGIBLE INVENTORY" means the finished goods inventory of
the Restricted Group reasonably acceptable to the Lenders, valued
at the lower of cost or fair market value in accordance with
GAAP;
1.1.52 "ELIGIBLE RAW MATERIALS" means the resin, paper,
polyethylene and any other marketable raw material of the
Restricted Group reasonably acceptable to the Lenders, valued at
the lower of cost or fair market value in accordance with GAAP ;
12
1.1.53 "ELIGIBLE TRADE RECEIVABLES" means, as of any date of
determination, the net amount (i.e. net of set-off, deduction or
reduction by any debtor of the Restricted Group who might also be
a creditor thereof, net of sales and similar taxes, and, more
generally, the net amount actually receivable by any member of
the Restricted Group for its own account) of each of the
Restricted Group's bona fide trade accounts receivables then
outstanding ninety (90) days or less from the date of the related
invoice or other evidence of billing, from each Person who is not
an Affiliate of the Restricted Group, provided that such accounts
receivable:
1.1.53.1 are considered by the Lenders, acting reasonably,
to be collectable by the Restricted Group in the ordinary
course of business;
1.1.53.2 are not owing by an account debtor who has failed
to pay 25% or more of the aggregate amount of its accounts
owing to the Restricted Group within 90 days after the date
of the respective invoices or other writing evidencing such
accounts;
1.1.53.3 arise either from the sale or lease of goods which,
on or prior to such date, have been shipped or delivered to
the account debtor under such account, or arise from
services which have been performed on or prior to such date;
1.1.53.4 are evidenced by an invoice, dated not later than
the date of shipment, delivery or performance, rendered to
such account debtor or some other evidence of billing
reasonably acceptable to the Agent;
1.1.53.5 are not evidenced by any note, trade acceptance,
draft or other negotiable instrument or by any chattel
paper, unless such note or other document or instrument
previously has been endorsed and delivered by the relevant
member of the Restricted Group to the Canadian Collateral
Agent or the US Collateral Agent, as the case may be;
1.1.53.6 are not owing by an account debtor which (i) does
not maintain its chief executive office in the United States
of America or Canada, (ii) is not organized under the laws
of the United States or Canada, or (iii) is the government
of any foreign country or sovereign state (other than the
United States or Canada), or of any state, province,
municipality or other instrumentality thereof;
1.1.53.7 are not accounts owing by the United States of
America or Canada or any state, province or political
subdivision thereof, or by any department, agency, public
body corporate or other instrumentality of any of the
foregoing, unless all necessary steps are
13
taken to comply with the Federal Assignment of Claims Act of
1940, as amended, or with any comparable Law, if applicable,
and all other necessary steps are taken to perfect the US
Collateral Agent's or the Canadian Collateral Agent's (as
applicable) security interest in such account; and
1.1.53.8 are not owing by an account debtor for which the
Restricted Group has received a notice of (i) the death of
the account debtor, (ii) the dissolution, liquidation,
termination of existence, insolvency or business failure of
the account debtor, (iii) the appointment of a receiver for
any part of the property of the account debtor, or (iv) an
assignment for the benefit of creditors, the filing of a
petition in bankruptcy, or the commencement of any
proceeding under any bankruptcy or insolvency Laws by or
against the account debtor;
Eligible Trade Receivables shall also include accounts receivable
guaranteed by the trustee in bankruptcy of Xxxxx Corning,
accounts receivable owing by account debtors located outside the
United States and Canada, and accounts receivable outstanding
more than 90 days from the date specified in paragraph 4 above,
each to the extent that (i) a letter of credit or letter of
guaranty has been issued in favour of the relevant member(s) of
the Restricted Group in relation thereto, (ii) such letter of
credit or letter of guaranty is acceptable to the Lenders acting
reasonably, and (iii) no dispute has arisen with regard to such
letter of credit or letter of guaranty;
1.1.54 "ENVIRONMENTAL LAWS" means all applicable United States,
Mexican and Canadian, federal, state, provincial or local, and
other foreign, statutes and codes or regulations, rules or
ordinances issued, promulgated or approved thereunder, as well as
all other Laws and common laws under which environmental
liabilities can arise, now or hereafter in effect (including
those with respect to asbestos or asbestos-containing material or
exposure to asbestos or asbestos-containing material), relating
to pollution or protection of the environment and public health
and relating to (a) emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial
toxic or hazardous constituents, substances or wastes (including
without limitation, any Hazardous Substance into the environment
(including without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), and (b) the
manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of any
Hazardous Substance, petroleum, including crude oil or any
fraction thereof, any petroleum product or other waste, and
chemicals or substances regulated by any such statute, codes,
regulations, rules or ordinances, and (c) underground storage
tanks and related piping, and emissions, discharges and releases
or threatened releases therefrom, such statute, codes,
regulations, rules or ordinances to include the applicable
provisions of (i) the Clean Air Act (42 U.S.C.ss.7401 et seq.),
(ii) the Clean Water Act (33 U.S.C.ss.1251 et seq.), (iii) the
Resource Conservation and Recovery Act of 1976 (42 X.X.X.xx. 6901
et seq.), (iv) the Toxic
14
Substances Control Act (15 U.S.C.ss.2601 et seq.), (v) the
Comprehensive Environmental Response, Compensation and Liability
Act, as amended by the Superfund Amendments and Reauthorization
Act (42 X.X.X.xx. 9601 et seq.), (vi) the Environmental
Protection Act (Canada), (vii) the Environmental Protection Act
(Ontario), and (viii) the Environmental Quality Act (Quebec);
1.1.55 "EQUITY INTERESTS" shall mean:
(a) in the case of a corporation, capital stock;
(b) in the case of an association or business entity,
any and all shares, interests, participations,
rights or other equivalents (however designated)
of capital stock;
(c) in the case of a partnership or limited liability
company, partnership or membership interests
(whether general or limited);
(d) any other interest or participation that confers
on a Person the right to receive a share of the
profits and losses of, or distributions of assets
of, the issuing Person; and
(e) any rights, warrants or options, or other
Securities that are exercisable, exchangeable or
convertible for or into any of the foregoing.
1.1.56 "EQUIVALENT AMOUNT", "EQUIVALENT AMOUNT" and similar
expressions mean the amount obtained in converting one currency
to another in accordance with the provisions of Article 16;
1.1.57 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute thereto, together
with the regulations thereunder, in each case as in effect from
time to time;
1.1.58 "ERISA AFFILIATE" means any trade or business (whether or
not incorporated) that is, along with the Borrowers or IPG,
treated as a single employer under Section 414(b) or 414(c),
respectively, of the Code;
1.1.59 "EVENT OF DEFAULT" means one or more of the events
described in Section 15.1;
1.1.60 "EXCESS CASH FLOW" means the Restricted Group's EBITDA on
a Consolidated basis for any period, calculated as set out
hereinbelow and at the times provided for in Section 9.2, plus
the amount of any decrease and minus the amount of any increase
in the Restricted Group's Consolidated working capital (non-cash
items) for such period, less the sum of:
15
(a) the amount of taxes paid in cash during the period in
question;
(b) the amount of any interest or dividends paid on Debt or
preferred shares in cash (not accrued) during such
period;
(c) the amount of any voluntary or scheduled principal
repayment during such period of Debt that is permitted
hereunder, including any voluntary or mandatory
permanent reductions thereof;
(d) the amount of capital expenditures during such period
which either are not financed using Debt, or are
financed using Debt incurred hereunder or Debt from a
member of the Restricted Group to another member of the
Restricted Group, up to a maximum of US$15,000,000
during IPG's 2002 fiscal year and US$20,000,000 during
IPG's 2003 fiscal year (it being understood that if
Facility B is fully repaid and cancelled during or
prior to IPG's 2002 or 2003 fiscal year, then the
maximum amount set forth in this clause (d) with
respect to such fiscal year shall not apply); and
(e) the amount of payments under Capitalized Leases during
such period;
in each case by the Restricted Group on a Consolidated basis;
provided, however, that no amount will be deducted pursuant to
subsections b) to d) inclusive, to the extent that such amount
has already been deducted from the Restricted Group's EBITDA for
the relevant period, nor will (i) the amount of any Mandatory
Repayment resulting from the application of subsection 9.2.2 with
respect to the Excess Cash Flow for a prior fiscal period or (ii)
any repayment of Debt, whether voluntary or as a Mandatory
Repayment, resulting from sales of assets (other than sales of
inventory in the ordinary course) be deducted in calculating
Excess Cash Flow. Excess Cash Flow shall be determined for each
applicable fiscal quarter or fiscal year of IPG as follows:
16
-----------------------------------------------------------------
FISCAL QUARTER/YEAR BASIS
-----------------------------------------------------------------
Q1/2002 Based on Excess Cash Flow ("ECF") during
the quarter
-----------------------------------------------------------------
Q2/2002 Based on the ECF during the first two
quarters of fiscal year 2002 reduced by
the ECF Mandatory Repayment made in
accordance with the provisions of this
Agreement and the Note Agreements with
respect to the first quarter of fiscal
year 2002 (the amount of any such
reduction to be made under this
subsection is hereinafter referred to as
the "ADJUSTED AMOUNT")
-----------------------------------------------------------------
Q3/2002 Based on the ECF during the first three
quarters of fiscal year 2002 reduced by
the ECF Mandatory Repayments made with
respect to the first two quarters of
fiscal year 2002
-----------------------------------------------------------------
Q4/2002 Based on the ECF for fiscal year 2002
reduced by the ECF Mandatory Repayments
made with respect to the first three
quarters of fiscal year 2002 and to be
adjusted promptly following confirmation
by IPG's auditors upon the release of
the fiscal 2002 year-end financial
statements
-----------------------------------------------------------------
Each fiscal quarter On a trailing four quarter basis reduced
during 2003 by the ECF Mandatory Repayments made
with respect to the previous three
quarters and to be adjusted (in the case
of the four-quarter period comprising
the fiscal year 2003) promptly following
confirmation by IPG's auditors upon the
release of the fiscal 2003 year-end
financial statements
-----------------------------------------------------------------
Each fiscal year On a trailing four quarter basis with
commencing with the the first payment due 120 days following
fiscal year in which the fiscal year end in which Facility B
Facility B has been was fully repaid and cancelled and each
repaid and cancelled subsequent payment due 120 days
following the end of every subsequent
fiscal year, in each case as confirmed
by IPG's auditors upon the release of
such fiscal year's year-end financial
statements
-----------------------------------------------------------------
Any negative Adjusted Amounts shall be carried forward into the
following quarter(s) and shall not be repaid to the Borrowers.
Notwithstanding anything in this subsection to the contrary, the
basis of calculation set forth in the above chart opposite the
caption "Q1/2002", "Q2/2002", "Q3/2002", "Q4/2002" and "each
fiscal quarter during 2003" shall apply only if Facility B has
not been fully repaid and cancelled prior to the date on which
the Mandatory Repayment with respect to the applicable fiscal
quarter is due pursuant to the first paragraph of subsection
9.2.2;
17
1.1.61 "EXISTING CREDIT FACILITIES" means all existing committed
and uncommitted bank credit facilities in favour of any of the
Borrowers or the Restricted Subsidiaries, including those
facilities accorded by TD, Comerica, The Bank of Nova Scotia and
National Bank of Canada;
1.1.62 "FACILITIES" means Facility A, Facility B and Facility C;
1.1.63 "FACILITY A" means the portion of the Advances available
pursuant to subsection 2.1.1;
1.1.64 "FACILITY A BORROWERS" means, jointly and severally,
Intertape Polymer Inc., IPC and each of the other Operating
Restricted Subsidiaries listed as Facility A Borrowers in
Schedule "K" hereto, provided that only Canadian Borrowers may
borrow under Tranche A-1 and only U.S. Borrowers may borrow under
Tranche A-2 (as defined in Section 2.2);
1.1.65 "FACILITY B" means the portion of the Advances available
pursuant to subsection 2.1.2;
1.1.66 "FACILITY B/C BORROWER" means IPG Holdings LP;
1.1.67 "FACILITY C" means the portion of the Advances available
pursuant to subsection 2.1.3;
1.1.68 "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum (calculated based on a
360-day year) equal, for each day during such period, to the
weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged
by Federal Funds brokers as published for such day (or, if such
day is not a Business Day, for the immediately preceding Business
Day) by the Federal Reserve Bank of New York or, for any day on
which such rate is not so published for such day by the Federal
Reserve Bank of New York, the average of the quotations for such
day for such transactions received by the Agent from three
Federal Funds brokers of recognized standing selected by the
Agent;
1.1.69 "FEES" means the fees payable to the Agents, the Lenders
and the Arrangers in accordance with the provisions of Section
5.14;
1.1.70 "FIRST CURRENCY" has the meaning ascribed to it in Section
16.1;
1.1.71 "FIXED CHARGES" for any period means, on a Consolidated
basis, the sum of (i) all Rentals (other than Rentals on
Capitalized Leases) payable during such period by the Restricted
Group, and (ii) all Interest Expense for such period on all
Indebtedness (including, for this purpose, the interest component
of Rentals on Capitalized Leases) of the Restricted Group;
18
1.1.72 Intentionally deleted
1.1.73 "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means
the generally accepted accounting principles acknowledged by the
Canadian Institute of Chartered Accountants and published in the
Canadian Institute of Chartered Accountants' Handbook;
1.1.74 "GUARANTEES" by any Person means all obligations (other
than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
dividend or other obligation of any other Person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly,
including all obligations incurred through an agreement,
contingent or otherwise, by such Person: (a) to purchase such
Indebtedness or other obligation or any property or assets
constituting security therefor, (b) to advance or supply funds
(i) for the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain working capital or other balance
sheet items, or otherwise to advance or make available funds, for
the purchase or payment of such Indebtedness or other obligation,
(c) to lease property or to purchase Securities or other property
or services primarily for the purpose of assuring the owner of
such Indebtedness or other obligation against loss in respect
thereof, or (d) otherwise to assure the owner of the Indebtedness
or other obligation of the Primary Obligor against loss in
respect thereof. For the purposes of all computations made under
this Agreement, a Guarantee in respect of any Indebtedness for
borrowed money, and a Guarantee in respect of any dividend or
other obligation, shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such Indebtedness, dividend or other
obligation;
1.1.75 "GUARANTORS" means IPG, LLC and any other Person who has
guaranteed the obligations of a Borrower from time to time
hereunder pursuant to the Security Documents. A list of the
Guarantors under each of the Facilities as of the Closing Date is
attached hereto as Schedule "L";
1.1.76 "HAZARDOUS SUBSTANCES" shall have the meaning assigned to
that term in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Acts of 1986 (42
X.X.X.xx. 9601 et seq.) and shall include petroleum including
crude oil or any fraction thereof, any petroleum product,
asbestos, radon gas, urea formaldehyde foam insulation,
polychlorinated biphenyls, radioactive and toxic substances,
prohibited substances and hazardous waste under the Environmental
Protection Act (Canada), a "contaminant" under the Environmental
Protection Act (Ontario), and a "contaminant" and a "pollutant"
under the Environmental Quality Act (Quebec) as well as similar
terms for such substances (including "Dangerous Substances") used
in any applicable provincial or federal Canadian Laws or any
other waste, chemicals or substances regulated by any
Environmental Law;
19
1.1.77 "INACTIVE SUBSIDIARIES" means those Subsidiaries of IPG
which are not Restricted Subsidiaries and which do not conduct
any real operations or business, a list of which, at the Closing
Date, is attached hereto as part of Schedule "D";
1.1.78 "INDEBTEDNESS" of any Person means and includes all
obligations of such Person which in accordance with GAAP shall be
classified upon a balance sheet of such Person as liabilities of
such Person, and in any event shall include all (a) obligations
of such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets, (b)
obligations secured by any Charge upon property or assets owned
by such Person, even though such Person has not assumed or become
liable for the payment of such obligations, (c) obligations
created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of
the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of property, (d)
Capitalized Rentals and (e) Guarantees of any other Person's
obligations of the character referred to in this definition;
1.1.79 "INTER-CREDITOR AGREEMENT" means the Intercreditor
Agreement, to be dated the Closing Date, among the Lenders, the
holders of the Notes, the members of the Restricted Group, the
Canadian Collateral Trustee, the US Collateral Trustee, the
Canadian Collateral Agent and the US Collateral Agent, as the
same may be amended, supplemented or otherwise modified from time
to time in accordance with the provisions thereof;
1.1.80 "INTEREST EXPENSE" of any Person for any period means all
interest and all amortization of debt discount and expense for
such period on each item of Indebtedness of such Person for which
such calculations are being made. Computations of Interest
Expense on a pro forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the
date of any determination;
1.1.81 "INVESTMENTS" means all investments, including
Acquisitions, in cash or by delivery of property, made directly
or indirectly in any Person, whether by acquisition of shares of
capital stock, Indebtedness or other obligations or Securities or
by loan, advance, capital contribution or otherwise; provided,
however, that "Investments" shall not mean or include routine
investments in Operating Assets to be used or consumed in the
ordinary course of business, or Available Cash;
1.1.82 "IPC" means Intertape Polymer Corp. and its successors;
1.1.83 "IPG" means Intertape Polymer Group Inc. and its
successors;
1.1.84 "ISSUING LENDER" means, for Letters of Credit to be issued
in Canadian Dollars or US Dollars requested by a Canadian
Borrower, TD and, for Letters of Credit to be issued in US
Dollars requested by a US Borrower, Comerica;
20
1.1.85 "LAWS" or "LAW" means all applicable provisions of all
laws, ordinances, decrees, orders, rules, regulations and
directives of governmental bodies, and all applicable provisions
of treaties as well as all ordinances and other decrees of
tribunals and arbitrators;
1.1.86 "LENDER" or "LENDERS" means the Lenders listed in Schedule
"A" together with any Assignee(s) or, as the context permits, any
of them alone; "Canadian Lenders" means TD, NBC and Comerica Bank
Canada Branch together with any Assignee(s), and "US Lenders"
means the U.S. based branches of TD, NBC and Comerica together
with any Assignee(s);
1.1.87 "LETTER OF CREDIT" means a stand-by letter of credit or a
letter of guarantee issued by the Agent in accordance with the
provisions hereof;
1.1.88 "LIBOR" means, with respect to any Designated Period of 1,
2, 3 or 6 months relating to a Libor Advance, the average rate
for deposits in US$ for a period comparable to the Designated
Period which is quoted on Libor 01 Page of Reuters, or, in case
of the unavailability of such page, which is quoted on the
British Bankers Association Libor Rates Telerate (page 3750 or
other applicable page), in either case at or about 11:00 a.m.,
London, England time, determined two Business Days prior to a
drawdown date or Rollover Date in accordance with Section 5.10;
if neither of such quotes is available, then LIBOR shall be
determined by the Agent as the average of the rates at which
deposits in US$ for a period similar to the Designated Period and
in amounts comparable to the amount of such Libor Advance are
offered by the Libor Reference Lenders to prime banks in the
London inter-bank market at or about 11:00 a.m. London, England
time on the date of such determination;
In any event, the rate determined by reference to the
above-mentioned, Reuter's page, Telerate page or average
inter-bank offered rate in accordance with the immediately
preceding paragraph (the "QUOTED RATE") shall be adjusted for
reserve requirements in accordance with the following formula to
obtain the applicable LIBOR:
Quoted Rate
LIBOR= ------------------------------
1.00 - Reserved Percentage
where "RESERVE PERCENTAGE" means the rate (expressed as a
decimal) applicable to the Agent during the relevant Designated
Period under regulations, directives or guidelines issued from
time to time by the Board of Governors of the Federal Reserve
System (in the USA), by the Office of the Superintendent of
Financial Institutions (in Canada) or by any other applicable
regulatory agency, for determining the reserve requirement
applicable to the Credit Facilities or to similar credit
facilities of the Agent or any of the Lenders (including any
basic, supplemental, emergency or marginal reserve requirement)
with respect to "Eurocurrency liabilities", as that term is
defined under such regulations or for the
21
purposes of complying with such directives or guidelines, in each
case depending on the situs of the Advances in question (for
example, if the Advances are made in the USA, the applicable
Reserve Percentage shall be that of the Board of Governors of the
Federal Reserve System). All adjustments to the Quoted Rate shall
occur and be effective as of the effective date of any change in
the Reserve Percentage, and the Agent will use reasonable efforts
to advise the Borrowers of any such change as soon as practicable
(provided that the Agent shall not be liable if it fails to do
so).
1.1.89 "LIBOR ADVANCE" means, at any time, the part of the
Advances in US$ with respect to which a Borrower has chosen to
pay interest on the Libor Basis;
1.1.90 "LIBOR BASIS" means the basis of calculation of interest
on the Advances or any part thereof, as set forth in Sections
5.7, 5.9 and 5.10;
1.1.91 "LIBOR REFERENCE LENDERS" means TD and Comerica or such
other Lenders appointed by the Agent with the consent of the
Borrowers in replacement of said Lender(s);
1.1.92 "LIKE ASSETS" means, as of the date of any determination
thereof, fixed or capital assets, used or to be used by one or
more members of the Restricted Group in the lines of business in
which the Restricted Group is engaged as of the Closing Date or
in a business reasonably related thereto;
1.1.93 "LLC" means IPG Finance LLC and its successors;
1.1.94 "LOAN" means, at any time, the aggregate of the Advances
then outstanding in accordance with the provisions hereof,
including the face amount of any Bankers' Acceptances and Letters
of Credit issued in accordance with the provisions hereof,
together with any other amount in principal, interest and
accessory costs payable to the Agent or the Lenders by the
Borrowers pursuant hereto;
1.1.95 "MAJORITY LENDERS" means, if there are two or three
Lenders, unanimity and, if there are four or more Lenders, at
least three Lenders having an aggregate of at least 662/3% of the
Commitments;
1.1.96 "MANDATORY REPAYMENT" means the repayment of all or any
part of the Loan and/or the Notes which the Borrowers are obliged
to effect in accordance with Section 9.2 and/or the corresponding
provisions of the Note Agreements;
1.1.97 "MARGIN" means, with respect to Sections 4.3, 5.1, 5.5,
5.7 and 5.14, and subject to the provisions of Section 10.3
hereof, under:
1.1.97.1 Facility A, for the period during which it
constitutes Priority Debt, the margins, Stamping Fees and
Standby Fees set out in the following grid:
22
Ratio of Total Standby Fee Standby Fee Prime plus; Libor plus;
Debt to EBITDA (where (where US Base Rate Letter of
Facility A Facility A plus; US Credit Fee;
is drawn by is not so Prime Rate Stamping Fee
more than drawn) plus
50%)
-------------- ---------- --------- ----------- -------------
>4.50x .875% 1.225% 2.75% 3.50%
----- ------ ----- -----
>4.00x .75% 1.05% 2.25% 3.00%
<4.50x
- ----- ------ ----- -----
>3.50x .625% .875% 1.75% 2.50%
<4.00x
- ----- ------ ----- -----
>3.25x .50% .70% 1.25% 2.00%
<3.50x
- ----- ------ ----- -----
>3.00x .375% .525% .75% 1.50%
<3.25x
- ----- ------ ----- -----
>2.50x .25% .35% .25% 1.00%
<3.00x
- ----- ------ ----- -----
<2.50x .1875% .2625% 0% .75%
- ----- ------ ----- -----
As indicated, the foregoing grid shows the amount of the Standby
Fee referred to in Section 5.14.1, the fees payable in respect of
Letters of Credit in accordance with the provisions of Section
4.3 and the Stamping Fee referred to in subsection 6.2.3. On the
Conversion Date, each Margin other than the Standby Fee shall be
automatically increased by .25% and the Standby Fee shall
increase by, where Facility A is drawn by more than 50%, .0625%
and, where such is not the case, by .0875%;
1.1.97.2 each of Facility B and Facility C, and Facility A in
respect of any period during which the latter does not constitute
Priority Debt, the margins, Stamping Fees and Standby Fees set
out in the following grid:
23
Ratio of Total Standby Fee Standby Fee Prime plus; Libor plus;
Debt to EBITDA (where such (where such US Base Rate Letter of
Facility Facility plus; US Credit Fee;
is drawn by is not so Prime Rate Stamping
more than drawn) plus Fee
50%)
-------------- ---------- --------- ----------- -------------
>3.50x 0.9875% 1.3825% 3.20% 3.95%
------- ------- ----- -----
>3.25x .6875% .9625% 2.00% 2.75%
<3.50x
- ------- ------- ----- -----
>3.00x .5625% .7875% 1.5% 2.25%
<3.25x
------- ------- ----- -----
>2.50x .4375% .6125% 1.0% 1.75%
<3.00x
- ------- ------- ----- -----
<2.50x .375% .525% .75% 1.50%
- ------- ------- ----- -----
1.1.97.3 during any Release Period (as defined in the first
paragraph of Section 10.3), the Margin shall be agreed upon by
the Borrowers, the Agent and the Lenders;
1.1.97.4 each Margin under Facility B shall increase by .25% per
month (and the Standby Fee applicable thereto shall increase by,
where such Facility is drawn by more than 50%, .0625% and, where
such is not the case, by .0875%) if at any time after April 30,
0000 XXX shall have failed to enter into a "reasonable and bona
fide" agreement authorizing a reputable American and/or Canadian
dealer to market the issuance of equity securities or
subordinated or mezzanine Debt, which Debt shall be on terms
acceptable to the Lenders, in their absolute discretion, in a
minimum amount equal to the outstanding amount of the Loan under
Facility B, or to underwrite such securities on a firm commitment
basis, in each case, on financial and other terms and conditions
not materially less favourable to IPG then those generally
available in the American or Canadian capital markets to issuers
of securities in the packaging industry having a creditworthiness
comparable to that of IPG.
The Margin shall be adjusted quarterly based on the ratio of
Total Debt as of the end of IPG's most recent fiscal quarter to
EBITDA
24
(for the four consecutive fiscal quarters including the fiscal
quarter ending on the calculation date, taken as a single
accounting period), such adjustment to be effective 60 days
following the end of each fiscal quarter;
1.1.98 "MATERIAL ADVERSE CHANGE" means the occurrence or the
failure to occur of any event or series of events which, either
singly or in the aggregate, would have a material adverse change
in the business, assets, liabilities, financial position,
operating results, business prospects or material agreements of
the Restricted Group, or on the ability of the Borrowers, the
Guarantors and IPG, taken as a whole, to perform their
obligations under this Agreement or under the Security Documents;
1.1.99 "MATERIAL DEBT" means, as of any date of determination,
any Debt which then has or relates to, in the aggregate, an
unpaid principal amount (or a corresponding unpaid liability) of
more than US $5,000,000 or an equivalent amount of money in any
other currency;
1.1.100 "MINORITY INTERESTS" means any shares of stock or other
ownership interests of any class of a Restricted Subsidiary
(other than directors' qualifying shares or similar ownership
interests as required by law) that are not owned by any member of
the Restricted Group (each an "OWNERSHIP INTEREST"). Minority
Interests shall be valued by valuing Ownership Interests
constituting preferred stock (or if such Ownership Interest is
not in a corporation, then any such Ownership Interest that has
the characteristics of preferred stock; in either case, a
"PREFERRED INTEREST") at the voluntary or involuntary liquidating
value of such Ownership Interest, whichever is greater, and by
valuing Ownership Interests constituting common stock (or if such
Ownership Interest is not in a corporation, then any such
Ownership Interest that has the characteristics of common stock;
in either case, a "COMMON INTEREST") at the book value of capital
and surplus applicable thereto adjusted, if necessary, to reflect
any changes from the book value of such Common Interest required
by the foregoing method of valuing Minority Interests in
Preferred Interests;
1.1.101 "MULTIEMPLOYER PLAN" shall have the same meaning as in
section 3(37) of ERISA;
1.1.102 "NEGATIVE VALUE OF DERIVATIVE INSTRUMENTS" means the
aggregate amount that would be payable to all Persons by a
Borrower (net of all amounts that would be payable by each such
Person to such Borrower) on the date of determination pursuant to
Section 6(e)(ii)(2)(A) of each ISDA Master Agreement between such
Borrower and such Persons as if all Derivative Instruments under
such ISDA Master Agreements were being terminated on that day;
provided that, with respect to the Derivative Instruments between
each Lender and a Borrower, the Agent will determine Market
Quotation (as such term is defined in the ISDA Master Agreement)
using its estimates at mid-market of the amounts that would be
paid for Replacement Transactions (as such term is defined in the
ISDA Master Agreement);
25
1.1.103 "NET INCOME AVAILABLE FOR FIXED CHARGES" for any period
means the sum of Consolidated Net Income during such period plus
(to the extent deducted in determining Consolidated Net Income)
(a) all provisions for any Federal, state, provincial or other
income taxes made by the Restricted Group during such period, (b)
Fixed Charges of the Restricted Group during such period, (c) all
amortization expenses of the Restricted Group, and (d) all
depreciation of the Restricted Group;
1.1.104 "NET INCOME TAXES" means net income taxes, net profit
taxes, franchise taxes (imposed in lieu of income taxes) and
taxes on capital imposed on any Lender under the laws of a
jurisdiction in which such Lender is organized or located;
1.1.105 "NOTE AGREEMENTS" collectively means (i) the agreement
entered into by the Facility B/C Borrower and IPG dated as of
June 1, 1998, with respect to the issuance and sale of one series
of senior notes in an aggregate principal amount of
US$137,000,000 and (ii) the agreement entered into by the
Facility B/C Borrower and IPG dated as of July 1, 1999, with
respect to the issuance and sale of two series of senior notes in
an aggregate principal amount of US$137,000,000, each as amended
and restated on or around the Closing Date pursuant to Amended
and Restated Note Agreements, and "NOTES" means the Notes issued
thereunder, as so amended and restated, and in each case as such
Amended and Restated Note Agreements and Notes may be amended,
supplemented or otherwise modified from time to time after the
Closing Date in accordance with the provisions hereof, thereof
and of the Inter-Creditor Agreement;
1.1.106 "NOTICE OF BORROWING" means a notice transmitted to the
Agent by a Borrower in accordance with the provisions of Sections
4.1, 4.2, 4.3 or 4.4 or of subsection 6.1.1;
1.1.107 "OPERATING ASSETS" means the accounts receivable and
inventory (including raw materials, work in process and finished
goods) of each of the members of the Restricted Group, wherever
situated, together with any proceeds (including insurance
proceeds) thereof;
1.1.108 "OPERATING RESTRICTED SUBSIDIARY" means the Restricted
Subsidiaries so identified in Schedule "D";
1.1.109 "PBGC" means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under
section 4002 of ERISA;
1.1.110 "PERMITTED CHARGES" means, with respect to any Person as
of any date:
1.1.110.1 any Charge created by law that arises in the
ordinary course of business , which has not at such date
been registered in accordance with applicable Laws against
such Person, which relates to obligations which are not yet
due, which is not related to any loan of money or obtention
of credit and which, in combination with other
26
such Charges, does not affect in a material way the use, the
income or the benefits flowing from the property so charged
in the conduct of the business of such Person; any Charge
resulting from judgments or similar decisions which such
Person has, at such date, appealed or in respect of which it
has sought revision and obtained a suspension of execution
pending the appeal or the revision; any Charge for taxes,
assessments or governmental claims or other impositions not
yet due or matured or the validity of which is then being
contested in good faith by such Person before a competent
tribunal or other governmental body in accordance with the
provisions of Section 13.7; or any deposit of monies or
securities in the ordinary course of business with respect
to any Charge referred to in this paragraph, or to secure
xxxxxxx'x compensation, surety or appeal bonds or security
for costs of litigation;
1.1.110.2 any right of a municipality, governmental body or
other public authority pursuant to any lease, license,
franchise, grant or permit obtained by such Person, or any
right resulting from a legislative provision, to terminate
such lease, license, franchise, grant or permit, or
requiring an annual or periodic payment as a condition of
its extension;
1.1.110.3 any right granted by such Person to a public body,
or to a municipal or governmental authority or public
utility, or which may be imposed by one or the other, when
required by such body or authority with respect to the
operations of such Person or in the ordinary course of its
business;
1.1.110.4 rights granted in favour of municipal authorities
or public utilities on real property acquired from time to
time by such Person which do not materially adversely affect
the value or marketability of such Person's real property;
1.1.110.5 minor title defects, homologated lines, zoning and
building by-laws, ordinances, regulations and other
governmental restrictions on the use of property which
customarily exist on properties of Persons engaged in
similar activities and similarly situated and which do not,
in any event, materially impair their use in the operation
of the businesses carried on by such Person;
1.1.110.6 Charges securing Indebtedness of a Restricted
Subsidiary to IPG or to another Wholly-owned Restricted
Subsidiary, or Charges on shares of stock of, or other
ownership interests in, Unrestricted Subsidiaries so long as
same are subordinate in all respects to the Charges in
favour of the Lenders;
27
1.1.110.7 Charges incurred after the Closing Date to secure
the payment of the purchase price of fixed assets useful and
intended to be used in carrying on the business of any
member of the Restricted Group to the extent incurred in
connection with (and within twelve months of) the
acquisition of such fixed assets, including Charges existing
on such fixed assets at the time of acquisition thereof or
at the time of acquisition by any member of the Restricted
Group of any business entity then owning such fixed assets,
whether or not such existing Charges were given to secure
the payment of the purchase price of the fixed assets to
which they attach so long as they were not incurred,
extended or renewed in contemplation of such acquisition,
provided that (a) the Charges shall attach solely to the
fixed assets acquired or purchased, (b) at the time of
acquisition of such fixed assets, the aggregate amount
remaining unpaid on all Indebtedness secured by Charges on
such fixed assets whether or not assumed by any member of
the Restricted Group shall not exceed an amount equal to the
lesser of the total purchase price or fair market value at
the time of acquisition of such fixed assets (as determined
in good faith by the Board of Directors of IPG), and (c) all
such Indebtedness shall have been incurred within the other
applicable limitations of subsections 13.11.1 and 13.11.4
and Section 14.2;
1.1.110.8 security which is already encumbering assets
acquired by any member of the Restricted Group prior to the
date hereof and described in Schedule "I", provided that
such security secures Indebtedness which complies with the
other applicable limitations of subsections 13.11.1 and
13.11.4 and Section 14.2;
1.1.110.9 Charges incurred under the Security Documents;
1.1.110.10 Charges in favour of any lender under an
operating line which replaces Facility A at the expiry of
its Term, ranking pari passu with or subordinate to the
Charges described in Section 10.2; and further provided that
after giving effect to the incurrence of all Debt secured by
such Charges, all such Debt shall have been incurred within
the other applicable limitations of Section 13.11 and
Section 14.2; provided further, however, that IPG will not,
and will not permit any Restricted Subsidiary to, incur or
maintain any operating lines or short-term or revolving bank
facilities secured by Charges on any assets of any member of
the Restricted Group, except as permitted in clause 9 or 10
of this definition;
1.1.111 "PERMITTED INVESTMENTS" means all:
28
1.1.111.1 Investments by any member of the Restricted Group
in any other member of the Restricted Group, including
Investments (a) directly out of the cash proceeds to IPG of
the concurrent sale of shares of capital stock of IPG or (b)
pursuant to a direct share exchange offer by IPG;
1.1.111.2 any Investment by any member of the Restricted
Group in commercial paper maturing in 270 days or less from
the date of acquisition thereof by such member of the
Restricted Group, and which is accorded as of such date a
rating of at least A-1 by Standard & Poor's Corporation
("STANDARD & POOR'S") or at least P-1 by Xxxxx'x Investors
Service, Inc. ("MOODY'S") or their equivalent acceptable to
the Lenders;
1.1.111.3 Investments in (a) direct obligations of the
United States of America or any agency or instrumentality of
the United States of America, the payment or guarantee of
which constitutes a full faith and credit obligation of the
United States of America or (b) direct obligations of Canada
or any agency or instrumentality of Canada, the payment or
guarantee of which constitutes a full faith and credit
obligation of Canada, in either case, maturing in twelve
months or less from the date of acquisition thereof by any
member of the Restricted Group;
1.1.111.4 Investments in certificates of deposit maturing
within one year from the date of acquisition thereof by any
member of the Restricted Group, issued by a bank or trust
company organized under the laws of the United States of
America, any state thereof or Canada or any province
thereof, having capital, surplus and undivided profits
aggregating at least US $500,000,000 (or its equivalent in
Canadian currency) and whose long-term certificates of
deposit are, as of such date, rated A- or better by Standard
& Poor's or A3 or better by Moody's, or their equivalent
acceptable to the Lenders, or Investments in Eurodollar
certificates of deposit maturing within one year after the
date of acquisition thereof by any member of the Restricted
Group and issued by a bank in western Europe or England
having capital, surplus and undivided profits of at least US
$1,000,000,000 (or its equivalent in such country's local
currency); and
1.1.111.5 loans or advances to employees of IPG and its
Subsidiaries for the purchase of shares of stock of IPG by
such employees) in the usual and ordinary course of
business, and other loans and advances to officers,
directors and employees for expenses (including moving
expenses related to a transfer) incidental to carrying on
the business of any member of the Restricted Group,
29
provided that the aggregate outstanding amount of all such
loans or advances shall at no time exceed US $5,000,000;
1.1.112 "PERSON" means a company, a corporation, an entity
created pursuant to Law, a physical person, a joint venture, a
partnership, a limited liability company, a trust, an entity
without juridical personality, a government or any ministry,
organization or intermediary of such government;
1.1.113 "PLAN" means a "pension plan," as such term is defined in
section 3(2) of ERISA and which is subject to Title IV of ERISA,
established or maintained by IPG or the Borrowers or any ERISA
Affiliate, or as to which IPG or the Borrowers or any ERISA
Affiliate contributed or is a member or otherwise may have any
liability;
1.1.114 "PRIME RATE" means, on any day, the reference rate of
interest, expressed as an annual rate, publicly announced or
posted from time to time by TD as being its reference rate then
in effect for determining interest rates on demand commercial
loans granted in Canada in Canadian Dollars to clients of TD
(whether or not any such loans are actually made), rounded up, if
necessary, to the first whole multiple of 1/16th of 1%; provided
that in the event that the Prime Rate is, on any day, less than
the average one month Bankers' Acceptance rate quoted on Reuters
Service, page CDOR, as at approximately 10:00 a.m. on such day
plus 1% (the "BA RATE"), the "Prime Rate" for such day shall be
equal to the BA Rate;
1.1.115 "PRIME RATE ADVANCES" means, at any time, the part of the
Canadian Dollar Advances with respect to which a Canadian
Borrower has chosen, or, in accordance with the provisions
hereof, is obliged, to pay interest on the Prime Rate Basis;
1.1.116 "PRIME RATE BASIS" means the basis of calculation of
interest on the Prime Rate Advances, or any part thereof, as set
forth in Sections 5.1 and 5.2;
1.1.117 "PRIORITY DEBT" has the meaning ascribed to it in
subsection 14.2.1(c);
1.1.118 "PRO RATA SHARING" means the obligation of the Lenders
and the holders of Notes to share the proceeds of Mandatory
Repayments, as provided in subsection 9.2.4;
1.1.119 "QUALIFYING EU JURISDICTION" means any country (other
than Greece) which as of the Closing Date is a member of the
European Union;
1.1.120 "RENTALS" means and includes, as of the date of any
determination thereof, all fixed payments (including all such
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
any member of the Restricted Group, as lessee or sublessee under
a lease of real or personal property, but shall be exclusive of
any amounts
30
required to be paid by any member of the Restricted Group
(whether or not designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if
any, required to be paid by the lessee or sublessee regardless of
sales volume or gross revenues;
1.1.121 "REPORTABLE EVENT" means an event described in Section
4043(c) of ERISA with respect to a Plan other than those events
as to which the 30-day notice period is waived under PBGC
Regulation Section 4043;
1.1.122 "RESPONSIBLE OFFICER" means any Senior Financial Officer
and any other officer of a Borrower or IPG with responsibility
for the administration of the relevant portion of this Agreement;
1.1.123 "RESTRICTED GROUP" means, as of any date of determination
thereof, IPG and the Restricted Subsidiaries;
1.1.124 "RESTRICTED PAYMENTS" means:
1.1.124.1 the declaration or payment, directly or
indirectly, of any dividend either in cash or property, on
any shares of capital stock of any member of the Restricted
Group;
1.1.124.2 the purchase, redemption or retirement, directly
or indirectly, of any shares of capital stock or other
equity interests of any class, or of any warrants, rights or
options to purchase or acquire shares of capital stock or
other equity interests of any member of the Restricted
Group;
1.1.124.3 any payment or distribution, directly or
indirectly, by any member of the Restricted Group in respect
of its capital stock or other equity interests; and
1.1.124.4 the prepayment of any Debt (other than Debt
secured by Charges described in the subsection 7 of the
definition of "Permitted Charges"), save as provided herein;
provided, however, that "Restricted Payments" shall not include
any such dividend, purchase, redemption, retirement, payment,
distribution or prepayment by any member of the Restricted Group
to IPG or to a Wholly-owned Restricted Subsidiary;
1.1.125 "RESTRICTED SUBSIDIARY" means, as of any date of
determination, each of the Subsidiaries so described in Schedule
"D" hereto which is then a Subsidiary and any other Subsidiary
(a) which is then organized under the laws of the United States,
Puerto Rico, Canada or any Qualifying EU Jurisdiction or any
jurisdiction of
31
any of the foregoing; (b) which then conducts substantially all
of its business and has substantially all of its assets within
the Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx or any Qualifying EU
Jurisdiction; (c) of which more than 80% (by number of votes) of
the Voting Stock is then beneficially owned by IPG or any
Wholly-owned Restricted Subsidiary (or any combination thereof),
and (d) which has been designated by the board of directors of
IPG as a Restricted Subsidiary on or prior to such date in
accordance with Section 13.20;
provided that such Subsidiary has provided enforceable Security
to the extent contemplated by Article 10;
1.1.126 "ROLLOVER DATE" means, with respect to a Libor Advance or
a BA Advance, the date of any such Advance, or the first day of
any Designated Period;
1.1.127 "SECOND CURRENCY" has the meaning ascribed to it in
Section 16.1;
1.1.128 "SECURITIES" has the meaning attributed to such term in
Section 2(1) of the Securities Act of 1933, as amended or
replaced from time to time;
1.1.129 "SECURITY" means the Guarantees and Charges created by
the Security Documents;
1.1.130 "SECURITY DOCUMENTS" means all of the documents described
in Article 10, as same may be amended, supplemented or otherwise
modified or replaced hereunder from time to time;
1.1.131 "SELECTED AMOUNT" means:
1.1.131.1 with respect to a BA Advance, the amount of the
Canadian Dollar Advances which a Canadian Borrower has asked
to obtain by the issuance of Bankers' Acceptances in
accordance with Section 6.1, and
1.1.131.2 with respect to a Libor Advance, the amount of the
Advances in respect of which a Borrower has asked, in
accordance with Section 4.2, that the interest payable
thereon be calculated on the Libor Basis;
1.1.132 "SENIOR FINANCIAL OFFICER" means the chief financial
officer, principal accounting officer, treasurer or comptroller
of IPG;
1.1.133 "STAMPING FEE" means the fee indicated in the applicable
row of the first or second subsection of the definition of the
term "Margin", as the case may be;
1.1.134 "SUBSIDIARY" means any Person in respect of which the
majority of the issued and outstanding capital stock or other
ownership interests granting a right to
32
vote in all circumstances is at the relevant time owned by IPG or
one or more of its direct or indirect Subsidiaries, or a
combination of any such Persons, and includes a limited
partnership, the general partner of which is IPG or one of its
Subsidiaries;
1.1.135 "SWING LINE ADVANCES" means (i) a Prime Rate Advance
under Facility A by the Canadian Swing Line Lender to the
Canadian Swing Line Borrower in an aggregate principal amount
outstanding at any time not exceeding the Canadian Dollar
equivalent amount of US$5,000,000, and (ii) a US Prime Rate
Advance under Facility A by the American Swing Line Lender to the
American Swing Line Borrower in an aggregate principal amount
outstanding at any time not exceeding US$7,500,000. All Swing
Line Advances in Canada are available only by way of Prime Rate
Advances, and in the United States, only by way of US Prime Rate
Advances, and may not be converted into any other form of
borrowing;
1.1.136 "SWING LINE BORROWERS" means IPI (the "CANADIAN SWING
LINE BORROWER") for Advances in Cdn. Dollars, and IPC (the
"AMERICAN SWING LINE BORROWER") for Advances in US Dollars;
1.1.137 "SWING LINE LENDERS" means TD (the "CANADIAN SWING LINE
LENDER") for Advances to a Canadian Borrower in either Cdn.
Dollars or US Dollars, and Comerica (the "AMERICAN SWING LINE
LENDER") for advances to a US Borrower in US Dollars, or both of
them where the context so requires;
1.1.138 "SWING LINE LOAN" means, at any time, the aggregate of
the Swing Line Advances outstanding at any time in accordance
with the provisions hereof, together with any other amount in
interest and accessory costs payable to the Swing Line Lenders by
the Swing Line Borrowers pursuant hereto;
1.1.139 "TERM" means the period commencing on the Closing Date
and terminating on:
1.1.139.1 with respect to Facility A, the second anniversary
of the Conversion Date;
1.1.139.2 with respect to Facility B, December 31, 2003; and
1.1.139.3 with respect to Facility C, the earlier of
December 31, 2005 or the date determined pursuant to Article
9;
1.1.140 "TOTAL DEBT" means, as of any date of determination, the
sum of (i) the aggregate principal amount of all Debt of the
Restricted Group then outstanding other than Debt owing by a
member of the Restricted Group to another member thereof (and for
greater certainty, includes any Debt of an Unrestricted
Subsidiary Guaranteed by any member of the Restricted Group) on a
Consolidated basis, plus (ii) the greater of (a) the stated value
of all preferred shares, or (b) the voluntary or involuntary
liquidation value of all preferred shares, as issued by a member
of the
33
Restricted Group then outstanding (other than any such preferred
shares held by another member of the Restricted Group), less
(iii) the Available Cash as of such date;
1.1.141 "TRANSFER AGREEMENT" means the form of transfer agreement
annexed hereto as Schedule "C";
1.1.142 "UNRESTRICTED SUBSIDIARY" means any Subsidiary of IPG
which is an Inactive Subsidiary or which is not otherwise a
Restricted Subsidiary, a list of which, at the Closing Date, is
attached hereto in Schedule "J", or as may be determined by IPG
at any later date, provided the provisions of this Agreement are
respected;
1.1.143 "US AGENT" means TD Texas, in its capacity as US
administration agent for all of the Lenders, or any successor
thereof;
1.1.144 "US BASE RATE" means, on any day, the rate of interest,
expressed as an annual rate, publicly announced or posted from
time to time by TD as being its reference rate then in effect for
determining interest rates on demand commercial loans granted in
Canada in US Dollars to its clients (whether or not any such
loans are actually made); provided that if the US Base Rate is,
for any period, less than the Federal Funds Effective Rate plus
1.00% per annum, the US Base Rate for such period shall be deemed
to be equal to the Federal Funds Effective Rate plus 1.00% per
annum. If for any reason the Canadian Agent shall have determined
(which determination shall be conclusive, absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability of failure of the
Canadian Agent to obtain sufficient bid or publications in
accordance with the terms hereof, the Canadian Agent's announced
US Base Rate shall apply;
1.1.145 "US BASE RATE ADVANCE" means, at any time, the part of
the US Dollar Advances with respect to which a Canadian Borrower
has chosen, or, in accordance with the provisions hereof, is
obliged, to pay interest on the US Base Rate Basis;
1.1.146 "US BASE RATE BASIS" means the basis of calculation of
interest on the US Base Rate Advances, or any part thereof, as
set forth in Sections 5.3 and 5.4;
1.1.147 "US COLLATERAL AGENT" means State Street Bank and Trust
Company or any replacement thereof agreed upon by the Lenders;
1.1.148 "US COLLATERAL TRUSTEE" means State Street Bank and Trust
Company, in its capacity as collateral trustee, pursuant to the
Collateral Trust Indenture, or its successor duly appointed
pursuant to the terms of such indenture;
1.1.149 "US DOLLARS" or "US $" means the lawful currency of the
United States of America in same day immediately available funds
or, if such funds are not available, the form of currency of the
United States of America which is ordinarily
34
used in the settlement of international banking obligations on
the day on which any payment or any calculation must be made
pursuant to this Agreement;
1.1.150 "US DOLLAR ADVANCES" means, at any time, the total of all
Loans in US Dollars, including the face amount of all Letters of
Credit denominated in US Dollars;
1.1.151 "US ENVIRONMENTAL INDEMNIFICATION AGREEMENT" has the
meaning ascribed thereto in subsection 11.1.22 of this Agreement;
1.1.152 "US PRIME RATE" means, on any day, the rate of interest,
expressed as an annual rate, publicly announced or posted by the
US Agent as being its reference rate then in effect for
determining interest rates on demand commercial loans granted in
the United States of America in US Dollars to its clients,
whether or not such loans are actually made; provided that in the
event that the US Prime Rate is, for any period, less than the
Federal Funds Effective Rate plus .50%, the US Prime Rate for
such period shall be deemed to be equal to the Federal Funds
Effective Rate plus .50%. If for any reason the US Agent shall
have determined (which determination shall be conclusive, absent
manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability of failure
of such party to obtain sufficient bids or publications in
accordance with the terms hereof, such party's announced US Prime
Rate shall apply;
1.1.153 "US PRIME RATE ADVANCE" means, at any time, the part of
the US Dollar Advances with respect to which a US Borrower has
chosen, or, in accordance with the provisions hereof, is obliged,
to pay interest on the US Prime Rate Basis;
1.1.154 "US PRIME RATE BASIS" means the basis of calculation of
interest on the US Dollar Advances, or any part thereof, as set
forth in Sections 5.5 and 5.6;
1.1.155 "VOTING STOCK" means Securities of any class or classes,
the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions); and
1.1.156 "WHOLLY-OWNED" when used in connection with any
Subsidiary means a Subsidiary of which all of the equity and
voting interests (except directors' qualifying shares or similar
equity interests as required by law) shall be owned by a
Borrower, IPG or one or more of IPG's Wholly-owned Restricted
Subsidiaries (or a combination of any such Persons).
1.2 INTERPRETATION
Unless stipulated to the contrary, the words used herein which indicate
the singular include the plural and vice versa and the words indicating
masculine include the feminine and vice versa. In addition, (a) the
word "INCLUDES" (or "INCLUDING") shall be interpreted to mean "INCLUDES
(OR INCLUDING) WITHOUT LIMITATION", and (b) where any provision in this
35
Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by such
Person.
1.3 CURRENCY
Unless the contrary is indicated, all amounts referred to herein are
expressed in US Dollars.
1.4 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Unless the Lenders shall otherwise expressly agree or unless otherwise
expressly provided herein, all of the terms used in this Agreement
which are defined under the rules constituting Generally Accepted
Accounting Principles shall be interpreted, and all financial
statements to be prepared hereunder shall be prepared, in accordance
with Generally Accepted Accounting Principles.
1.5 DIVISION AND TITLES
The division of this Agreement into Articles, Sections and subsections
and the insertion of titles are for convenience of reference only and
shall not affect the meaning or interpretation of this Agreement.
2 THE CREDIT
2.1 THE FACILITIES
Subject to the provisions hereof, each Lender, individually and not
jointly and severally with any other Lender, agrees to make available
to the Borrowers its Commitment in the Credit, which Credit consists
of:
2.1.1 as of the date of determination thereof, for the Facility A
Borrowers, jointly and severally, a maximum amount under Facility
A equal to the least of (i) US$50,000,000, (ii) the sum obtained
in subtracting from the maximum amount of Priority Debt then
permitted to be outstanding pursuant to Section 14.2.1(c) hereof
all then existing Priority Debt other than the Loan under
Facility A, or (iii) the Borrowing Base;
2.1.2 for the Facility B/C Borrower, a maximum amount of US
$35,000,000 under Facility B; and
2.1.3 for the Facility B/C Borrower, a maximum amount of US
$60,000,000 under Facility C;
for a total of up to US $145,000,000 (the "CREDIT").
36
2.2 FACILITY A
Facility A shall be divided into two tranches, Tranche A-1 and Tranche
A-2. Tranche A-1, in a maximum amount of US$10,000,000, may be borrowed
only by the Canadian Borrowers from the Canadian Lenders; Xxxxxxx X-0,
in a maximum amount of US$40,000,000, may be borrowed by the U.S.
Borrowers from the U.S. Lenders. Provided that no Default shall have
occurred and be continuing and that no Event of Default shall have
occurred which has not been waived, IPG may, once per fiscal quarter,
by notice in writing sent to the Agent at least 30 days prior to the
effective date thereof (the "EFFECTIVE RE-ALLOCATION DATE"), request
that a different allocation, not exceeding $50,000,000 in total, be
made between Tranche A-1 and Tranche A-2 of Facility A. In such event,
such re-allocation will occur on the Effective Re-Allocation Date,
provided that, prior to the Effective Re-Allocation Date, the U.S.
Borrowers have repaid the U.S. Lenders under Tranche A-2 and the
Canadian Borrowers have repaid the Canadian Lenders under Xxxxxxx X-0,
to the extent necessary to permit such re-allocation to occur.
All Advances borrowed under Facility A may be repaid and re-borrowed by
the Facility A Borrowers at all times during the Term.
2.3 FACILITY B AND FACILITY C
Subject to the permanent reductions in the ongoing availability of
Facility B and Facility C resulting from the repayment of such
Facilities under the provisions of either Section 9.1 or 9.2, all
Advances available to the Facility B/C Borrower under Facility B and
Facility C may be repaid and re-borrowed by the Facility B/C Borrower
at all times during the Term.
2.4 EXTENSION OF TERM - FACILITY A
The Facility A Borrowers may request, by notice in writing to the Agent
given at least 60 days but not more than 90 days prior to the
Conversion Date, that the Lenders extend such Conversion Date (a
"RENEWAL REQUEST") by a period of 364 days from the Conversion Date
otherwise in effect (the "RENEWAL PERIOD").
The Agent shall promptly notify the Lenders of any such Renewal
Request, and the Lenders undertake to respond thereto no more than
thirty (30) days following the Agent's receipt of the Renewal Request.
If all of the Lenders agree to the Renewal Request during such period,
the Conversion Date shall be extended to the last day of the Renewal
Period. If any Lender fails to so respond, such Lender shall be deemed
to have refused the Renewal Request. Each of the Lenders may accept or
refuse the Renewal Request at its entire discretion or impose any
condition it sees fit. In the event of an explicit or a deemed refusal
by any of the Lenders or if the Facility A Borrowers do not accept any
conditions imposed by any of the Lenders, the Term shall be extended
for another 2 years, but the Facility A Borrowers shall no longer have
the right to forward a Renewal Request.
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3 PURPOSE
3.1 PURPOSE OF THE ADVANCES
All Advances made by the Lenders to the Borrowers in accordance with
the provisions hereof shall be used by the Borrowers (directly or
indirectly) for (a) the financing of the non-hostile acquisition of
assets, and (b) general corporate or business purposes, including the
issuance of letters of credit and the repayment and cancellation of all
Existing Credit Facilities. No proceeds of any Advance will be used (A)
to acquire any equity "security", as defined in Section 2(1) of the
Securities Act of 1933, as amended, of a class which is registered
pursuant to Section 12 of the Securities Exchange Act of 1934 or any
"margin stock", as defined in Federal Reserve System Board of Governors
Regulation U, or (B) to finance or protect against any hostile
acquisition (meaning an acquisition by or of a member of the Restricted
Group in respect of which the board of directors of the target company
or management of the target Person (if the target is not a corporation)
has not recommended acceptance of same).
4 ADVANCES, CONVERSIONS AND OPERATION OF ACCOUNTS
4.1 NOTICE OF BORROWING
Subject to the applicable provisions of this Agreement, on any Business
Day during the relevant Term, each of the Borrowers shall be entitled
to draw upon the Credit, on one or more occasions, up to the maximum
amount of the Credit, provided that at least one (1) Business Day prior
to the day on which any Prime Rate Advance, US Base Rate Advance or US
Prime Rate Advance (other than a Swing Line Advance, which shall be
made in accordance with the provisions of Section 4.4) is required,
such Borrower shall have provided to the Agent an irrevocable telephone
notice at or before 10:00 A.M., New York time, on any Business Day,
followed by the delivery on the same day of a written notice of
confirmation substantially in the form of Schedule "B". Notices in
respect of Libor Advances, Letters of Credit, Swing Line Advances and
BA Advances shall be made in accordance with the provisions of Sections
4.2, 4.3, 4.4 and 6.1 respectively.
4.2 LIBOR ADVANCES AND CONVERSIONS
On any Business Day during the Term, upon an irrevocable telephone
notice to the Agent given prior to 10:00 A.M., New York time at least
three Business Days prior to the date of a proposed Libor Advance or a
Rollover Date, followed by the delivery on the same day of a written
notice of confirmation substantially in the form annexed hereto as
Schedule "B", each of the Borrowers may request that a Libor Advance be
made, that one or more Advances not borrowed as Libor Advances be
converted into one or more Libor Advances (but subject to the other
provisions of this Agreement) or that a Libor Advance or any part
thereof be extended, as the case may be. The Agent shall determine the
LIBOR which will be in effect on the date of the Advance or the
Rollover Date, as the case may be (which in each case must be a
Business Day), with respect to the Selected Amount or to each of the
Selected Amounts, as the case may be, having a Designated Period of 1,
2, 3 or 6 months. However, if a Borrower requesting a LIBOR Advance has
not delivered a notice to the
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Agent in a timely manner in accordance with the provisions of this
Section 4.2, the relevant Borrower shall be deemed to have chosen to
have the interest on the amount of such Advance calculated in
accordance with the provisions of Section 5.11.
4.3 LETTERS OF CREDIT
As part of the Credit available hereunder and upon not less than three
(3) Business Days' prior notice to the Agent, each of the Facility A
Borrowers may cause to be issued by an Issuing Lender one or more
Letters of Credit under Facility A in a maximum aggregate amount
outstanding at any time not exceeding US $15,000,000, and for a
duration not exceeding the lesser of one (1) year from the date of
issuance or the remaining duration of the Term, subject to the
signature by the relevant Facility A Borrower of the Issuing Lender's
standard documentation then currently used in connection with letters
of credit. Such Borrower shall pay non-refundable fees in respect of
any such Letter of Credit equal to the rate per annum indicated in the
definition of "Margin" multiplied by the face amount thereof, subject
to a minimum fee for each Letter of Credit in an amount of $250,
payable in advance. The relevant Facility A Borrower shall also pay to
the Issuing Lender Letter of Credit fees in respect of any such Letters
of Credit equal to .12% per annum of the face amount thereof, payable
(i) for Letters of Credit issued at the request of a US Borrower, in
arrears at the end of each fiscal quarter of IPG, and (ii) for Letters
of Credit issued at the request of a Canadian Borrower, in advance on
the date of issuance, or on such other date as the Agent may determine
from time to time. IPG and LLC expressly acknowledge that they will
remain liable hereunder in respect of Letters of Credit irrespective of
the fact that they have not executed such standard documentation
together with the applicable Borrower. If a request for payment is made
under any Letter of Credit, the Issuing Lender will advise the Agent
and the Agent will promptly advise the relevant Facility A Borrower of
any payment made thereunder. Upon any payment by the Issuing Lender
under any Letter of Credit, each of the Lenders shall reimburse to the
Issuing Lender a portion of such payment equal to the percentage of its
respective Facility A Commitment multiplied by the amount of such
payment.
4.4 SWING LINE ADVANCES
4.4.1 Swing Line Advances. Subject to the terms and conditions of
this Agreement, the Swing Line Lenders agree to make Swing Line
Advances to the Swing Line Borrowers on any Business Day from
time to time during the Term of Facility A. Swing Line Advances
may be made or drawn by way of overdrafts on the relevant Swing
Line Borrower's account with the relevant Swing Line Lender or by
way of irrevocable same Business Day telephone notice to the
Swing Line Lender at or before 11:00 a.m. New York time followed
by the delivery on the same day of a written notice of
confirmation. Not later than the day following the Business Day
on which it requests any Swing Line Advance, the relevant Swing
Line Borrower shall advise the Agent of such Swing Line Advance
by notice in writing or, where applicable, by providing to the
Agent a copy of all relevant documentation. Such Borrower shall
advise the Agent in a similar fashion of any repayment of a Swing
Line Advance not later than the Business Day following the date
of such repayment.
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4.4.2 Use of Proceeds of Swing Line Advances. The proceeds of
Swing Line Advances may be used by the Swing Line Borrowers for
any purpose for which other Advances under Facility A may be
used.
4.4.3 Retirement and Replacement. If any Swing Line Lender no
longer wishes to act as such, it shall notify the Facility A
Borrowers, the other Facility A Lenders and the Agent not less
than ten (10) days prior to the date on which it proposes to
cease acting as a Swing Line Lender. In such event, the Facility
A Borrowers may designate a different Swing Line Lender by
sending a notice to (a) the Swing Line Lender who will no longer
act as such (the "RETIRING SWING LINE LENDER"), (b) the new Swing
Line Lender who has agreed to act as such and (c) the Agent, not
less than five (5) days prior to the date on which the
replacement is to occur. On the replacement date, the new Swing
Line Lender shall make a Prime Rate Advance or a US Prime Rate
Advance, as the case may be, available to the Agent for the
purpose of repaying the Swing Line Loans owed to the Retiring
Swing Line Lender.
4.4.4 No Replacement Possible/Events of Default. If an Event of
Default shall have occurred which has not been waived, other than
an Event of Default under subsection 15.1.3, or if no Facility A
Lender agrees to act as a replacement for the Retiring Swing Line
Lender (in such case, the affected Swing Line Lender or Swing
Line Lenders are herein referred to as the "FORMER SWING LINE
LENDER"), the Facility A Borrowers shall be deemed to have made a
request for a Prime Rate Advance or a US Prime Rate Advance, as
the case may be, under Facility A, and each Facility A Lender
shall make a Prime Rate Advance or a US Prime Rate Advance, as
the case may be, available to the Agent, on the date referred to
in the first sentence of subsection 4.4.3, for the purpose of
repaying the principal amount of the Swing Line Loans owed to the
Former Swing Line Lender, in the amount of such Facility A
Lender's Commitment percentage multiplied by the amount of the
outstanding Swing Line Loans owing to the Former Swing Line
Lender (the "LENDER SWING LINE REPAYMENTS"). From and after such
date, the Facility A Borrowers shall not have any further right
to obtain Swing Line Advances and any outstanding Swing Line
Loans will continue to form part of the Loans made under Facility
A. However, if a Default under subsection 15.1.3 shall have
occurred and be continuing, or if an Event of Default under
subsection 15.1.3 shall have occurred and not been waived, the
Facility A Lenders shall not make such Lender Swing Line
Repayments and the provisions of subsection 4.4.5 shall apply.
4.4.5 Payments Following a certain Default or Event of Default.
If, before the making of a Lender Swing Line Repayment under
subsection 4.4.4, a Default under subsection 15.1.3 shall have
occurred and be continuing or an Event of Default under
subsection 15.1.3 shall have occurred which has not been waived,
each Facility A Lender will, on the date such Lender Swing Line
Repayment was to have been made, purchase from the Former Swing
Line Lender an undivided participating interest in the Swing Line
Loans to be repaid, in an amount equal to its Commitment
percentage multiplied by the amount of the outstanding Swing Line
Loans, and immediately transfer such amount to the Agent for the
benefit of the Former Swing
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Line Lender, in immediately available funds. From and after such
date, the Facility A Borrowers shall not have any further right
to obtain Swing Line Advances and the outstanding Swing Line
Loans will continue to form part of the Loans made under Facility
A.
4.4.6 Subsequent Payments. If at any time after any Lender Swing
Line Repayment has been made, the Former Swing Line Lender
receives any payment on account of the Swing Line Loans in
respect of which such Lender Swing Line Repayment has been made
or on account of the purchase referred to in subsection 4.4.5,
the Former Swing Line Lender will distribute to the Agent for the
benefit of each Facility A Lender an amount equal to its
Commitment percentage multiplied by such amount (appropriately
adjusted, in the case of interest payments, to reflect the period
of time during which such Facility A Lender's portion was
outstanding and funded) in like funds as received; provided,
however, that if such payment received by the Former Swing Line
Lender is required to be returned, such Facility A Lender will
return to the Agent for the benefit of the Former Swing Line
Lender any portion thereof previously distributed by the Former
Swing Line Lender to the Agent for the benefit of such Facility A
Lender in like funds as such payment is required to be returned
by such Former Swing Line Lender.
4.4.7 Unconditional Obligation to Make Lender Swing Line
Repayments. Each Facility A Lender's obligation to make Lender
Swing Line Repayments or to purchase a participating interest in
Swing Line Loans in accordance with subsections 4.4.4 and 4.4.5
shall be absolute and unconditional and shall not be affected by
any circumstance, including: (1) any set-off, compensation,
counterclaim, recoupment, defence or other right which such
Facility A Lender may have against a Swing Line Lender, the
Facility A Borrowers or any other Person for any reason
whatsoever; (2) the occurrence or continuance of any Default or
Event of Default; (3) any adverse change in the condition
(financial or otherwise) of the Facility A Borrowers or any other
Person; (4) any breach of this Agreement by the Facility A
Borrowers or any other Person; (5) any inability of the Facility
A Borrowers to satisfy the conditions precedent to borrowing set
forth in this Agreement on the date upon which any such Lender
Swing Line Repayment is to be made or participating interest is
to be purchased or (6) any other circumstances, happening or
event whatsoever, whether or not similar to any of the foregoing.
If any Facility A Lender does not make available the amount
required to be funded by it under subsection 4.4.4 or 4.4.5, as
the case may be, the Former Swing Line Lender shall be entitled
to recover such amount on demand from such Facility A Lender,
together with interest thereon at the Prime Rate or the US Prime
Rate, as the case may be, from the date of non-payment until such
amount is paid in full.
4.4.8 Standby Fee not Affected. Notwithstanding the provisions of
Section 5.14, and for greater certainty, the Standby Fee
described in subsection 5.14.1 will be calculated daily and be
payable on the entire unused portion of Facility A, irrespective
of the amount of the Borrowing Base.
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4.5 CURRENCY
Subject to the provisions of Sections 2.1 and 2.2 and of Article 5 and
Section 6.1, at any time during the relevant Term, each of the Facility
A Borrowers may borrow, on one or more occasions, up to the maximum
amount of the Credit under Facility A in Canadian or US Dollars or in
any combination thereof, as such Borrowers may consider appropriate.
The Facility B/C Borrower shall borrow in US Dollars only.
4.6 OPERATION OF ACCOUNTS
The Agent shall maintain in its books at the Branch a record of the
Loan, including the Letters of Credit issued by the Issuing Lender at
the request of a Borrower, attesting as to the total of the Borrowers'
indebtedness to the Lenders in accordance with the provisions hereof.
Such record shall constitute, in the absence of manifest error, prima
facie proof of the total amount of the indebtedness of the Borrowers to
the Lenders in accordance with the provisions hereof, of the date of
any Advance made to the Borrowers and of the total of all amounts paid
by the Borrowers from time to time with respect to principal and
interest owing on the Loan and the fees and other sums payable in
accordance with the provisions hereof.
4.7 APPORTIONMENT OF ADVANCES
The amount of each Advance will be apportioned among the Lenders by the
Agent by reference to the Commitment of each Lender with respect to the
applicable Facility, as such Commitment shall be in effect immediately
prior to the making of such Advance, subject to the provisions of
Section 4.4 hereof with respect to Swing Line Advances and Section 6.9
hereof with respect to BA Advances. If any amount is not in fact made
available to the Agent by a Lender, the Agent shall be entitled to
recover such amount (together with interest thereon at the rate
reasonably determined by the Agent as being its cost of funds in the
circumstances) on demand from such Lender or, if such Lender fails to
reimburse the Agent for such amount on demand, from the Borrowers.
4.8 LIMITATIONS ON ADVANCES
Any amount of the Credit available under Facility A, Facility B and
Facility C shall cease to be available at the expiry of the applicable
Term.
4.9 NETTING
On the date of any Advance or on a Rollover Date, each of the Lenders
shall be entitled to net amounts payable on such date by such Lender to
a Borrower against amounts due and payable on such date by such
Borrower to the Lender.
4.10 NOTICES IRREVOCABLE
Any notice given to the Agent by a Borrower in accordance with Article
4 may not be revoked or withdrawn.
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5 INTEREST AND FEES
5.1 INTEREST ON THE PRIME RATE BASIS
The principal amount of the Loan which at any time and from time to
time remains outstanding and in respect of which a Canadian Borrower
has chosen or, in accordance with the provisions hereof, is obliged to
pay interest on the Prime Rate Basis, shall bear interest, calculated
daily, on the daily outstanding principal balance of such Loan, from
the date of each applicable Advance up to and including the day
preceding the date of repayment thereof in full, at the annual rate
(calculated based on a 365 or 366 day year, as the case may be)
applicable to each of such days which corresponds to the Prime Rate at
the close of business on each of such days, plus the Margin.
5.2 PAYMENT OF INTEREST ON THE PRIME RATE BASIS
The interest payable in accordance with Section 5.1 and calculated in
the manner described therein shall be payable to the Agent monthly in
arrears, on the first Business Day of each month or on such other date
as the Agent may determine and advise the Borrowers in writing from
time to time, the first payment of which shall be payable on the first
Business Day of the month immediately following the month in which the
first Prime Rate Advance was made.
5.3 INTEREST ON THE US BASE RATE BASIS
The principal amount of the Loan which at any time and from time to
time remains outstanding and in respect of which a Canadian Borrower
has chosen or, in accordance with the provisions hereof, is obliged to
pay interest on the US Base Rate Basis, shall bear interest, calculated
daily, on the daily outstanding principal balance of such Loan, from
the date of each applicable Advance up to and including the day
preceding the date of repayment thereof in full, at the annual rate
(calculated based on a 365 or 366 day year, as the case may be)
applicable to each of such days which corresponds to the US Base Rate
at the close of business on each of such days, plus the Margin.
5.4 PAYMENT OF INTEREST ON THE US BASE RATE BASIS
The interest payable in accordance with Section 5.3 and calculated in
the manner hereinabove described is payable to the Agent monthly, in
arrears, on the first Business Day of each month or on such other date
as the Agent may determine and advise the Borrowers in writing from
time to time, the first payment of which shall be payable on the first
Business Day of the month immediately following the month in which the
first US Base Rate Advance was made.
5.5 INTEREST ON THE US PRIME RATE BASIS
The principal amount of the Loan which at any time and from time to
time remains outstanding and in respect of which a US Borrower has
chosen or, in accordance with the provisions hereof, is obliged to pay
interest on the US Prime Rate Basis, shall bear interest, calculated
daily, on the daily outstanding principal balance of such Loan, from
the date of
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each applicable Advance up to and including the day
preceding the date of repayment thereof in full at the annual rate
(calculated based on a 365 or 366 day year, as the case may be)
applicable to each of such days which corresponds to the US Prime Rate
at the close of business on each of such days, plus the Margin.
5.6 PAYMENT OF INTEREST ON THE US PRIME RATE BASIS
The interest payable in accordance with Section 5.5 and calculated in
the manner hereinabove described is payable to the Agent monthly, in
arrears, on the first Business Day of each month or on such other date
as the Agent may determine and advise the Borrowers in writing from
time to time, the first payment of which shall be payable on the first
Business Day of the month immediately following the month in which the
first US Prime Rate Advance was made.
5.7 INTEREST ON THE LIBOR BASIS
The principal amount of the Loan which at any time and from time to
time remains outstanding and in respect of which a Borrower has chosen,
in accordance with the provisions hereof, to pay interest on a LIBOR
basis, shall bear interest, calculated daily, on the daily outstanding
principal balance of such Loan, from each Rollover Date up to and
including the day preceding the date of repayment thereof in full, at
the annual rate (calculated based on a 360-day year) applicable to each
of such days which corresponds to the LIBOR applicable to each
applicable Selected Amount, plus the Margin, and such rate shall be
effective with respect to each applicable Selected Amount as and from
each applicable Rollover Date up to and including the date prior to the
next such Rollover Date.
5.8 PAYMENT OF INTEREST ON THE LIBOR BASIS
The interest payable in accordance with the provisions of Section 5.7
and calculated in the manner hereinabove described is payable to the
Agent, in arrears,
5.8.1 on the last day of the Designated Period when the
Designated Period is 1, 2 or 3 months,
5.8.2 when the Designated Period exceeds 3 months, on the last
Business Day of each period of 3 months during such Designated
Period and on the last day of the Designated Period, if the
Designated Period is more than 3 months and is not a multiple of
3 months.
5.9 LIMITS TO THE DETERMINATION OF LIBOR
Nothing herein contained shall be interpreted as authorizing a
Borrower, with respect to the determination of LIBOR, to choose a
Selected Amount with respect to each Designated Period of less than US
$1,000,000 or a greater amount other than in whole multiples of US
$100,000.
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5.10 FIXING OF LIBOR
LIBOR shall be transmitted to the relevant Borrower(s) by the Agent at
approximately 11:00 A.M., New York time, two Business Days prior to:
5.10.1 the date on which the relevant Libor Advance is to be
made; or
5.10.2 the relevant Rollover Date.
5.11 INTEREST ON THE LOAN
Where no specific provision with respect to interest on an outstanding
portion of the Loan is contained in this Agreement, the interest on
such portion of the Loan shall be calculated and payable on the US
Prime Rate Basis if the amount is in US Dollars and on the Prime Rate
Basis if the amount is in Canadian Dollars.
5.12 ARREARS OF INTEREST
Any arrears of interest or principal shall bear interest at a rate that
is two percent (2%) per annum higher than the rate of interest payable
in respect of the relevant principal amount of the Loan and shall be
calculated and payable on the same basis.
5.13 MAXIMUM INTEREST RATE
The amount of the interest or fees payable in applying this Agreement
shall not exceed the maximum rate permitted by Law. Where the amount of
such interest or such fees is greater than the maximum rate, the amount
shall be reduced to the highest rate which may be recovered in
accordance with the applicable provisions of Law.
5.14 FEES
The Borrowers shall pay the following fees (the "FEES") to the Agents
in the manner directed by the Agents pursuant to the provisions of
Section 18.19:
5.14.1 for the Lenders and in respect of Facility A, at all times
during its Term, a Standby Fee equal to the percentage set out in
the definition of "Margin", in each case multiplied by an amount
equal to the unused portions of Facility A (calculated based on
the maximum principal amount that could then be outstanding under
such Facility, irrespective of the Borrowing Base), calculated
daily and payable quarterly in arrears based on a 365/366 day
year on the last day of each calendar quarter or on such other
date as the Agent may determine;
5.14.2 for the Lenders and in respect of each of Facility B and
Facility C, at all times during the term of such Facility, a
Standby Fee equal to the percentage set out in the definition of
"Margin" in each case multiplied by an amount equal to the unused
portions of each such Facility (calculated based on the maximum
principal amount that could then be outstanding under such
Facility), calculated daily and
45
payable quarterly in arrears based on a 365/366 day year on the
last day of each calendar quarter or on such other date as the
Agent may determine;
5.14.3 up-front Fees of US$225,000 to NBC, US$375,000 to Comerica
and US$800,000 to TD, payable on the Closing Date;
5.14.4 additional Fees of US$250,000 to Comerica and US$400,000
to TD, payable on the date of the first increase in the Margin on
Facility B, if any, effected pursuant to the fourth subsection of
the definition of the term "Margin";
5.14.5 structuring Fees of US$100,000 payable to the Arrangers on
the Closing Date on a pro-rata basis; and
5.14.6 for the Agent, an agency fee to be determined between the
Agent and the Borrowers.
5.15 INTEREST ACT
5.15.1 For the purposes of the Interest Act of Canada (to the
extent applicable), any amount of interest or fees calculated
herein using 360, 365 or 366 days per year and expressed as an
annual rate is equal to the said rate of interest or fees
multiplied by the actual number of days comprised within the
calendar year, divided by 360, 365 or 366, as the case may be.
5.15.2 The parties agree that all interest in this Agreement will
be calculated using the nominal rate method and not the effective
rate method, and that the deemed re-investment principle shall
not apply to such calculations. In addition, the parties
acknowledge that there is a material distinction between the
nominal and effective rates of interest and that they are capable
of making the calculations necessary to compare such rates.
6 BANKERS' ACCEPTANCES
6.1 ADVANCES BY BANKERS' ACCEPTANCES AND CONVERSIONS INTO BANKERS'
ACCEPTANCES
6.1.1 Subject to the applicable provisions of this Agreement, on
any Business Day during the relevant Term, by written Notice of
Borrowing to the Agent given at least three (3) Business Days
prior to the date of the Advance or a Rollover Date (for the
purposes of this Article 6 called the "ACCEPTANCE DATE") and
before 10:00 A.M., a Canadian Borrower may request that a BA
Advance be made, that one or more Advances not borrowed as BA
Advances be converted into one or more BA Advances or that a BA
Advance or any part thereof be extended, as the case may be (the
"BA REQUEST"). Bankers' Acceptances shall be issued on each
Acceptance Date or Rollover Date, in a minimum Selected Amount,
with respect to each Designated Period, of Cdn.$3,000,000 or such
greater amount which is an integral multiple of Cdn.$100,000,
shall have a Designated Period, as designated by the
46
relevant Canadian Borrower, of 1, 2, 3 or 6 months (or such other
period as may be available and acceptable to the Agent), subject
to availability, and shall, in no event, mature on a date after
the expiry of the Term.
6.1.2 Prior to making any BA Request, a Canadian Borrower shall
deliver:
(a) to the Canadian Lenders, in the name of each Canadian
Lender which is a bank that accepts bankers'
acceptances (a "BA LENDER"), drafts in form and
substance acceptable to the Agent and the Canadian
Lenders; and
(b) to the Canadian Lenders in the name of each Canadian
Lender which is not a bank or does not accept bankers'
acceptances (a "NON-BA LENDER"), Discount Notes;
completed and executed by its authorized signatories in
sufficient quantity for the Advance requested and in appropriate
denominations to facilitate the sale of the Bankers' Acceptances
in the financial markets. No Canadian Lender shall be responsible
or liable for its failure to accept a Bankers' Acceptance
hereunder if such failure is due, in whole or in part, to the
failure of a Canadian Borrower to give appropriate instructions
to the Agent on a timely basis, nor shall the Agent or any
Canadian Lender be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any such
instrument except a loss or improper use arising by reason of the
gross negligence or wilful misconduct of the Agent, such Canadian
Lender, or their respective employees. In order to facilitate
issuances of Bankers' Acceptances pursuant hereto, each Canadian
Borrower hereby authorizes each Canadian Lender, and for this
purpose appoints each Canadian Lender its lawful attorney, to
complete and sign Bankers' Acceptances on behalf of such
Borrower, in accordance with the instructions given from time to
time by such Borrower, in handwritten or facsimile or mechanical
signature or otherwise, and once so completed, signed and
endorsed, and following acceptance of them as Bankers'
Acceptances, to purchase, discount or negotiate such Bankers'
Acceptances in accordance with the provisions of this Article 6,
and to provide the Available Proceeds (as defined in subsection
6.2.3(d)) to the Agent in accordance with the provisions hereof.
Drafts so completed, signed, endorsed and negotiated on behalf of
a Canadian Borrower by any Canadian Lender shall bind such
Borrower as fully and effectively as if so performed by an
authorized officer of such Borrower. Each Canadian Lender shall
maintain appropriate records with respect to such instruments (i)
received by it hereunder, (ii) voided by it for any reason, (iii)
accepted by it hereunder and (iv) cancelled, whether at their
respective maturities or otherwise. Each Canadian Lender agrees
to provide such records to the Canadian Borrowers promptly upon
request and, at the request of a Canadian Borrower, to cancel
such instruments which have been completed and executed by such
Canadian Borrower pursuant to this subsection 6.1.2 and which are
held by such Canadian Lender and have not yet been issued
hereunder.
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6.2 ACCEPTANCE PROCEDURE
With respect to any BA Advance:
6.2.1 The Agent shall promptly notify in writing each Canadian
Lender of the details of the proposed BA Advance, specifying:
(a) for each BA Lender, (i) the face amount of the Bankers'
Acceptances to be accepted by such Lender, and (ii) the
Designated Period for such Bankers' Acceptances; and
(b) for each Canadian Lender which is a Non-BA Lender, (i)
the face amount of the Discount Notes to be issued to
such Lender, and (ii) the Designated Period for such
Discount Notes.
6.2.2 The Agent shall establish the Bankers' Acceptance Discount
Rate at or about 10:00 a.m. on the Acceptance Date, and the Agent
shall promptly determine the amount of the BA Proceeds.
6.2.3 Forthwith, and in any event not later than 11:30 A.M. on
the Acceptance Date, the Agent shall indicate to each Canadian
Lender, in the manner set out in Section 18.6:
(a) the Bankers' Acceptance Discount Rate;
(b) the amount of the Stamping Fee applicable to those
Bankers' Acceptances to be accepted by such Lender on
the Acceptance Date, which shall be calculated by
multiplying the appropriate annual percentage set out
in the definition of "Margin" by the face amount of
each such Bankers' Acceptance and by a fraction the
numerator of which is the number of days in the
Designated Period and the denominator of which is 365,
any such Lender being authorized by the Canadian
Borrowers to collect the Stamping Fee out of the BA
Proceeds of those Bankers' Acceptances;
(c) the BA Proceeds of the Bankers' Acceptances to be
purchased by such Lender on such Acceptance Date; and
(d) the amount obtained (the "AVAILABLE PROCEEDS") by
subtracting the Stamping Fee mentioned in subsection
6.2.3(b) from the BA Proceeds mentioned in subsection
6.2.3(c);
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6.2.4 Not later than 1:00 P.M. on the Acceptance Date, each
Canadian Lender shall make available to the Agent its Available
Proceeds.
6.2.5 Not later than 4:00 P.M. on the Acceptance Date, the Agent
shall transfer the Available Proceeds to the relevant Canadian
Borrower in accordance with Section 9.10 and shall notify the
relevant Canadian Borrower on such day either by telex, fax or
telephone (if by telephone, to be confirmed subsequently in
writing) of the details of the issue, including the information
required by subsection 6.2.3.
6.3 PURCHASE OF BANKERS' ACCEPTANCES AND DISCOUNT NOTES
Before giving value to the relevant Canadian Borrower, the Canadian
Lenders or the participants which:
6.3.1 are BA Lenders shall, on the Acceptance Date, accept the
Bankers' Acceptances by inserting the appropriate principal
amount, Acceptance Date and maturity date in accordance with the
BA Request relating thereto and affixing their acceptance stamps
thereto, and shall purchase or sell same; and
6.3.2 are Non-BA Lenders shall, on the Acceptance Date, complete
the Discount Notes by inserting the appropriate principal amount,
Acceptance Date and maturity date in accordance with the BA
Request relating thereto.
6.4 MATURITY DATE OF BANKERS' ACCEPTANCES
Subject to the applicable notice provisions, at or prior to the
maturity date of each Bankers' Acceptance, the Canadian Borrowers
shall:
6.4.1 give to the Agent a notice in the form of Schedule "B"
requesting that the Canadian Lenders convert all or any part of
the BA Advance then outstanding by way of Bankers' Acceptances
which are maturing into a Prime Rate Advance; or
6.4.2 give to the Agent a notice in the form of Schedule "B"
requesting that the Canadian Lenders extend all or any part of
the BA Advance outstanding by way of Bankers' Acceptances which
are maturing into another BA Advance by issuing new Bankers'
Acceptances, subject to compliance with the provisions of
subsection 6.1.1 with respect to the minimum Selected Amount; or
6.4.3 no later than 10:00 A.M., on the third Business Day prior
to the maturity date of each Bankers' Acceptance then outstanding
and reaching maturity, notify the Agent that it intends to
deposit in its account for the account of the Canadian Lenders on
said maturity date an amount equal to the face amount of each
such Bankers' Acceptance, less any portion of the related BA
Advance that has been converted or extended pursuant to
subsection 6.4.1 or 6.4.2 .
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6.5 DEEMED CONVERSIONS ON THE MATURITY DATE
If the Canadian Borrowers do not deliver to the Agent one or more of
the notices contemplated by subsections 6.4.1 and 6.4.2 or do not give
the notice and make the deposit contemplated by subsection 6.4.3, the
Canadian Borrowers shall be deemed to have requested that the part of
the BA Advance then outstanding by way of the Bankers' Acceptance which
is maturing be converted into a Prime Rate Advance, provided that in
such event the interest payable in respect of any such deemed Prime
Rate Advance shall be 115% of the interest otherwise payable on the
Prime Rate Basis for the three (3) day period immediately following the
maturity date of the Bankers' Acceptances in question.
6.6 CONVERSION AND EXTENSION MECHANISM
If under the conditions
6.6.1 of subsection 6.4.1 and of Section 6.5, a Canadian Borrower
requests or is deemed to have requested, as the case may be, that
the Agent convert a portion of the BA Advance which is maturing
into a Prime Rate Advance, the Canadian Lenders shall pay the
applicable Bankers' Acceptances which are outstanding and
maturing. Such payments by the Canadian Lenders will constitute a
Prime Rate Advance within the meaning of this Agreement;
6.6.2 of subsection 6.4.3, a Canadian Borrower makes a deposit in
its account, without limiting in any way the generality of
Section 19.5, such Canadian Borrower hereby expressly and
irrevocably authorizes the Agent to make any debits necessary in
its account in order to pay, to the extent contemplated by
subsection 6.4.3, the Bankers' Acceptances which are outstanding
and maturing.
6.7 AMOUNTS GIVEN TO THE CANADIAN LENDERS DO NOT CONSTITUTE A
PREPAYMENT
None of the amounts debited by the Agent from a Canadian Borrower's
account from time to time in accordance with the provisions of
subsection 6.6.2 shall constitute a prepayment in accordance with the
provisions of Section 9.3.
6.8 PREPAYMENT OF BANKERS' ACCEPTANCES
Notwithstanding any provision hereof, but subject to subsection 8.1.1,
a Canadian Borrower may not prepay any Bankers' Acceptance other than
on its maturity date; however, this provision shall not prevent such
Borrower from acquiring, in its discretion but subject to the other
provisions of this Agreement, any Bankers' Acceptance in circulation
from time to time.
6.9 APPORTIONMENT AMONGST THE CANADIAN LENDERS
The Agent is authorized by the Canadian Borrowers and each Canadian
Lender to allocate amongst the Canadian Lenders the Bankers'
Acceptances to be issued in such manner and amounts as the Agent may,
in its sole discretion, but acting reasonably, consider necessary,
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so as to ensure that no Canadian Lender is required to accept a
Bankers' Acceptance for a fraction of Cdn.$100,000, and in such event,
the Canadian Lenders' respective Commitment in any such Bankers'
Acceptances and repayments thereof shall be altered accordingly.
Further, the Agent is authorized by the Canadian Borrowers and each
Canadian Lender to cause the proportionate share of one or more
Lender's Advances (calculated based on its Commitment) to be exceeded
by no more than Cdn.$100,000 each as a result of such allocations,
provided that the principal amount of outstanding Advances, including
BA Advances outstanding by way of Bankers' Acceptances, shall not
thereby exceed the maximum amount of the respective Commitment of each
Canadian Lender. Any resulting amount by which the requested aggregate
face amount of any such Bankers' Acceptances shall have been so reduced
shall be advanced, converted or continued, as the case may be, as a
Prime Rate Advance, to be made contemporaneously with the BA Advance.
6.10 CASH DEPOSITS
Each Canadian Lender may, in its discretion, at any time, in the
absence of any demand by a Canadian Borrower to such effect, grant an
Advance to a Canadian Borrower, the amount of which shall be equivalent
to the face amount of all Bankers' Acceptances then in circulation
which have been accepted by such Canadian Lender, which Advance shall
not bear interest. The amount of the Advance shall not be taken into
account in order to calculate the amount of the Credit used pursuant
hereto. The Agent shall retain the amount of the Advance in a
non-interest bearing cash collateral account as security, for the
benefit of such Borrower, which amount may be entirely set-off against
the amount of the Advance and the amount of the Bankers' Acceptances in
circulation which such Canadian Lender has accepted and may be imputed,
in the Lender's discretion, to the payment of such Bankers' Acceptances
at their maturity. Such Borrower shall sign and remit as security with
regard thereto all appropriate documents which the Lenders might judge
necessary or desirable, including an assignment of the credit balance
of the deposit account held as security, the whole without cost to such
Borrower save (i) after the occurrence and during the continuance of a
Default or after the occurrence of an Event of Default which has not
been waived, or (ii) in the context of a prepayment under Section 9.3.
6.11 DAYS OF GRACE
The Canadian Borrowers shall not claim from the Lenders any days of
grace for the payment at maturity of any Bankers' Acceptances presented
and accepted by the Lenders pursuant to the provisions of this
Agreement. Further, each of the Canadian Borrowers waives any defence
to payment which might otherwise exist if for any reason a Bankers'
Acceptance shall be held by any Canadian Lender in its own right at the
maturity thereof.
6.12 OBLIGATIONS ABSOLUTE
The obligations of the Canadian Borrowers with respect to Bankers'
Acceptances shall be unconditional and irrevocable and shall be paid
strictly in accordance with the provisions of this Agreement under all
circumstances, including the following circumstances:
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6.12.1 any lack of validity or enforceability of any draft
accepted by any Canadian Lender as a Bankers' Acceptance; o
6.12.2 the existence of any claim, set-off, defence or other
right which any of the Canadian Borrowers may have at any time
against the holder of a Bankers' Acceptance, the Canadian
Lenders, or any other person or entity, whether in connection
with this Agreement or otherwise.
6.13 DEPOSITORY BILLS AND NOTES ACT
Bankers' Acceptances may be issued in the form of a depository xxxx and
deposited with a clearing house, both terms as defined in the
Depository Bills and Notes Act. The Agent and the Canadian Borrowers
shall agree on the procedures to be followed, acting reasonably. The
Canadian Lenders are also authorized to issue depository bills as
replacements for previously issued Bankers' Acceptances, on the same
terms as those replaced, and deposit them with a clearing house against
cancellation of the previously issued Bankers' Acceptances.
7 RESTRICTIONS, LIMITATIONS AND MARKET CONDITIONS
7.1 MARKET FOR BANKERS' ACCEPTANCES AND LIBOR ADVANCES
If at any time or from time to time: (a) there no longer exists a
market for Bankers' Acceptances, or (b) as a result of market
conditions, it is not reasonably practicable to establish LIBOR, for a
Selected Amount or a Designated Period, or (c) US Dollar deposits are
not available to any Lender in the London Interbank or any comparable
market in the ordinary course of business in amounts sufficient to
permit it to make the requested Libor Advance for a Selected Amount or
a Designated Period, such Lender shall so advise the Agent and shall
not be obliged to honour any Notices of Borrowing in connection with
any BA Advances or Libor Advances, and the Borrowers' option to request
BA Advances or Libor Advances, as the case may be, shall thereupon be
suspended upon the delivery by the Agent to the Borrowers of a notice
corresponding to the notice provided by such Lender to the Agent as
described above.
7.2 SUSPENSION OF BA ADVANCE AND LIBOR ADVANCE OPTION
If a notice has been given by the Agent in accordance with Section 7.1,
the applicable BA Advance or Libor Advance, or any part thereof, as the
case may be, shall not be made (whether as an Advance, a conversion or
an extension) by the applicable Lenders and the right of the Borrowers
to choose that Advances be made or, once made, be converted or extended
into BA Advances or Libor Advances, as the case may be, shall be
suspended until such time as the Agent has determined that the
circumstances having given rise to such suspension no longer exist, in
respect of which determination the Agent shall advise the Borrowers
within a reasonable delay.
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7.3 LIMITS ON BA ADVANCES, LETTERS OF CREDIT AND LIBOR ADVANCES
Nothing in this Agreement shall be interpreted as authorizing the
Borrowers:
7.3.1 to issue Bankers' Acceptances or to borrow by way of Libor
Advances, nor as obliging the Agent to accept Notices of
Borrowing in respect of Libor Advances, in each case for a
Designated Period that ends; nor
7.3.2 to cause to be issued Letters of Credit that mature;
on a date which results in a situation where the Credit cannot be
reduced as required by this Agreement, or on a date which is after the
expiry of the Term.
8 ILLEGALITY, INCREASED COSTS AND INDEMNIFICATION
8.1 ILLEGALITY, INCREASED COSTS
If a Lender, acting reasonably, determines (which determination shall
be attested to by a certificate submitted to the Borrowers by such
Lender with a copy to the Agent and which shall be final and binding
between the parties hereto in the absence of manifest error) that,
after the date hereof, there has occurred i) the adoption by a
governmental or international authority (including the Bank for
International Settlements (the "BIS")) of a law, directive, requirement
or guideline, whether or not having the force of law, ii) any
modification to a law, directive or guideline, whether or not having
the force of law, or to the interpretation or application of same by a
tribunal or governmental or international authority (including the BIS)
or other body charged with such interpretation or application, or iii)
any quashing by a tribunal or other governmental or international
authority or body (including the BIS) of an interpretation of any law,
directive, requirement or guideline, whether or not having the force of
law, which:
8.1.1 has rendered or will render it illegal or contrary to any
law, directive or guideline for such Lender to maintain or to
give effect to all or part of its obligations stipulated in this
Agreement, including the obligation to make or maintain all or
any part of a BA Advance or a Libor Advance pursuant to the terms
hereof, then the obligation of such Lender to maintain or to give
effect to such part of its obligations will become null and,
subject to the provisions of the particular law, directive or
guideline and of Section 8.2 with respect to losses, costs and
expenses, if the Advance affected is a BA Advance, the applicable
Borrower(s) may convert the principal amount thereof into a Prime
Rate Advance, and if a Libor Advance, the applicable Borrower(s)
may convert the principal amount thereof into a US Prime Rate
Advance or a US Base Rate Advance, and pay the interest accrued
thereon, or may reimburse the particular BA Advance or Libor
Advance in whole with interest accrued thereon.
Such conversion or reimbursement shall be made at the expiry of
the relevant Designated Period which is the last to expire prior
to the effective date of such adoption, modification or quashing,
or, if in the judgment of such Lender expressed
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to the Agent in the certificate referred to above, an immediate
conversion or reimbursement is necessary, immediately upon demand
by the Agent; or
8.1.2 i) has imposed, modified or deemed applicable any loan
ceiling with respect to such Lender, or imposed, modified or
deemed applicable any special tax, reserve, deposit, capital
adequacy or similar requirement with respect to the assets held
by, deposited at or used for the purchase of funds by, or to the
loans made by such Lender, or ii) changes the basis of taxation
on payments made to such Lender under this Agreement (other than
a change affecting Net Income Taxes), or iii) imposes upon such
Lender any other monetary conditions or restrictions with respect
to this Agreement, all or any part of the Loan, as the case may
be, or any other document contemplated hereby, and if the result
of any of the foregoing is to increase the cost to such Lender of
making or maintaining its Commitment or any Advance, or to reduce
any amount otherwise receivable by such Lender hereunder with
respect thereto, then, in any such case, the relevant Borrower(s)
shall promptly pay to such Lender, within 10 Business Days from
demand by the Agent, such additional amounts as are necessary to
compensate such Lender for such additional cost or reduced amount
receivable as determined in good faith by such Lender. The
Lenders shall use reasonable efforts to advise the Borrowers of
any event described in this Section 8.1 within a reasonable
delay. If a Lender becomes entitled to claim any additional
amounts pursuant to this Section 8.1, it shall promptly notify
the Borrowers, through the Agent, of the event by reason of which
it has become so entitled and provide reasonable particulars of
the calculation of such amount. A certificate of a Lender as to
any such additional amounts payable to it pursuant to this
Section 8.1 shall be conclusive and binding in the absence of
manifest error.
8.2 INDEMNITY
The Borrowers shall indemnify each Lender against and hold each Lender,
as well as its directors, officers or employees, harmless from any loss
or expense, including without limitation any loss or expense arising
from interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain any Advance and any loss or
expense incurred in re-deploying deposits from which such funds were
obtained, which such Lender may sustain or incur as a consequence of
any i) default by a Borrower in the payment when due of the amount of
or interest on any part of the Loan or in the payment when due of any
other amount hereunder, ii) default by a Borrower in obtaining an
Advance after such Borrower has given a Notice of Borrowing stating
that it desires to obtain such Advance, iii) default by a Borrower in
making any voluntary reduction of the outstanding amount of the Loan
after such Borrower has given notice hereunder that it desires to make
such reduction, and iv) the payment of any Bankers' Acceptance or Libor
Advance otherwise than on the maturity date thereof (including any such
payment required pursuant to Section 9.1 or upon acceleration pursuant
to Section 15.2). A certificate of the Agent providing reasonable
particulars of the calculation of any such loss or expense shall be
conclusive and binding in the absence of manifest error. If any Lender
becomes entitled to claim any amount pursuant to this Section 8.2, it
shall promptly notify the Borrowers of the event by reason of which it
has become so entitled and provide reasonable particulars of the
related loss or expense. The Borrowers shall, within ten (10) days
following receipt of a
54
notice to such effect pursuant to this Section 8.2, pay to the Agents,
for the account of the applicable Lender, the amount which such Lender
is then entitled to receive pursuant to this Section 8.2.
8.3 WITHHOLDING TAXES
All payments to be made hereunder by the Borrowers, IPG and LLC shall
be made free and clear of, and without deduction or withholding for or
on account of, any present or future tax, levy, impost, duty, charge,
assessment or fee (including interest, penalties and additions
thereto), excluding Net Income Taxes (a "RELEVANT TAX"). If any
Relevant Tax is required to be withheld from any payment due hereunder,
the Borrowers, IPG and LLC shall, subject to the next paragraph,
increase the amount of such payment so that the Lenders will receive a
net amount (after deduction and withholding of all Relevant Taxes)
equal to the amount required to be paid before giving effect to this
Section 8.3. The Borrowers, IPG and LLC shall pay such Relevant Tax to
the appropriate taxing authority for the account of applicable Lender
and, as promptly as possible thereafter, send such Lender an original
receipt showing payment thereof, together with such additional
documentary evidence as such Lender may from time to time reasonably
require.
The Borrowers, IPG and LLC shall not be obliged to increase the amount
of any payment to any non-US Lender hereunder pursuant to the preceding
paragraph as a result of a US withholding of any Relevant Tax to the
extent such withholding is imposed as a result of the failure of such
Lender to timely deliver the appropriate form or forms (or successor
form or forms) duly and properly completed establishing the Lender's
basis for exemption from such withholding (an Internal Revenue Service
Form X-0XXX, X-0 or other appropriate form), or the failure of such
form or forms to establish a complete exemption from the withholding
due to a willful error or negligent omission.
If any Lender is entitled to a refund or credit in respect of any taxes
on which increased amounts have been paid pursuant to this Section 8.3
and can easily calculate same, such Lender shall, if necessary, make
the appropriate claim for such refund or credit, and if such Lender
receives the benefit of the refund or credit, shall within 30 days
after its receipt, credit the amount of such to the relevant Borrower,
IPG or LLC, as appropriate.
8.4 SURVIVAL
Without prejudice to the survival or termination of any other agreement
of the Borrowers, IPG or LLC under this Agreement, the obligations of
the Borrowers under Sections 8.2 and 8.3 shall survive the payment in
full of all principal and interest on the Loan and the termination of
the Credit.
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9 PAYMENT, REPAYMENT AND PREPAYMENT
9.1 REPAYMENT OF THE LOAN
The relevant Borrowers hereby agree to repay the principal amount of
the Loan attributable to each Facility on the last day of the Term of
such Facility. Notwithstanding the foregoing:
9.1.1 the Credit under Facility B shall be reduced by
US$3,500,000 on each of September 30, 2002, December 31, 2002,
March 31, 2003, June 30, 2003 and September 30, 2003; and
9.1.2 the Credit under Facility C shall be reduced by
US$5,000,000 on the last day of each calendar quarter beginning
on the earlier of (i) March 31, 2004 and (ii) the last day of the
calendar quarter immediately following the calendar quarter in
which the repayment and cancellation of Facility B occurs.
In no event shall the aggregate outstanding principal amount of the
Loans attributable to Facility B or Facility C exceed the Credit under
such Facility as reduced pursuant to this Section 9.1. The Facility B/C
Borrower shall repay all amounts necessary to ensure that such
reductions do not cause the aggregate outstanding principal amount of
the Loan attributable to Facility B or Facility C to exceed the Credit
under such Facility at any time.
9.2 AMOUNT AND APPORTIONMENT OF MANDATORY REPAYMENTS
9.2.1 RESULTING FROM EQUITY OR DEBT:
If any member of the Restricted Group:
(a) issues any Equity Interests of any nature whatsoever,
other than (i) those arising out of the exercise of
employee stock options in the ordinary course at an
exercise price up to an aggregate maximum of
US$5,000,000 per fiscal year of IPG, or (ii) to another
member of the Restricted Group, or
(b) issues any Debt of the nature contemplated in the
fourth subsection of the definition of "Margin" (other
than (i) Debt owing by one member of the Restricted
Group to another member thereof, and (ii) a replacement
of Facility A after it has expired and otherwise in
accordance with the provisions hereof),
the net proceeds received by the Restricted Group from such
issuance, creation or assumption shall, within 10 days following
receipt thereof, be used to repay the Loan as follows, in each
case subject to the provisions of Section 9.2.5 and to Pro Rata
Sharing: (i) all of the net proceeds thereof shall first be
applied to repay the
56
Loan, and the Credit under Facility B will be reduced by an
amount equal to the amount of such repayment, and then (ii) once
Facility B has been repaid and the Credit thereunder cancelled,
75% of the remaining net proceeds shall be applied to repay the
Loan, and the Credit under Facility C will be reduced by an
amount equal to the amount of such repayment.
9.2.2 RESULTING FROM EXCESS CASH FLOW:
In addition to the other repayments required under this Section
9.2 and to the payments required pursuant to Section 9.1 hereof,
but subject to the next succeeding paragraph, on the 63rd day
following the end of each fiscal quarter commencing with IPG's
fiscal quarter ending March 31, 2002, the Facility B/C Borrower
shall make Mandatory Repayments equal to 75% of Excess Cash Flow
for such fiscal quarter. Notwithstanding the foregoing and
provided that each of Facility B and Facility C is fully drawn at
the time payment is due, the amount of each quarterly Mandatory
Repayment payable under this paragraph of this subsection and
after giving effect thereto shall be limited to a maximum amount
such that the principal amount of the Loan outstanding under
Facility A (net of Available Cash in the Restricted Group) will
not exceed US$35,000,000. Payment of the balance of such
Mandatory Repayment (the "DEFERRED AMOUNT") shall be deferred to
the next scheduled date for a Mandatory Repayment under this
paragraph.
Upon the repayment and cancellation of Facility B, and commencing
with the fiscal year-end of the fiscal year in which such
repayment occurs, within 120 days following the end of each
fiscal year of IPG, the Facility B/C Borrower shall make (in lieu
of the Mandatory Repayments required by the immediately preceding
paragraph) Mandatory Repayments equal to 50% of Excess Cash Flow
for such fiscal year, less, for greater certainty, Mandatory
Repayments made for the same fiscal year (or any portion thereof)
prior to the repayment and cancellation of Facility B under the
preceding paragraph, if any. Such percentage shall be reduced to
35% for any fiscal year (a) in which IPG's Total Debt to EBITDA
ratio calculated in accordance with the provisions of subsection
13.11.4 is less than 2.5:1 on the last day of such fiscal year,
or (b) IPG has obtained a credit rating in respect of its
long-term, senior unsecured Debt, of "BBB" or better by Standard
& Poor's (or an equivalent credit rating by Xxxxx'x) and such
rating is then in full force and effect, not having been
withdrawn, the whole provided that, in the case of (a) or (b)
above, no Default or Event of Default exists on the payment date.
9.2.3 RESULTING FROM INSURANCE PROCEEDS AND TAKINGS:
The Restricted Group shall make all Mandatory Repayments required
hereunder and under the Inter-Creditor Agreement with respect to
insurance proceeds and "Takings" (as such term is defined in the
Inter-Creditor Agreement), in the manner set forth in such
agreements.
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9.2.4 PRO RATA SHARING:
Subject to the provisions of the next paragraph of this
subsection 9.2.4, the proceeds representing each Mandatory
Repayment shall be shared between the Lenders and the holders of
the Notes. Such proceeds shall be allocated among such Lenders
and the holders of the Notes based on the outstanding principal
amount of the Loans under Facility B and Facility C and the
outstanding principal amount of the Notes, determined in each
case as of the date of such Mandatory Repayment. Such proceeds:
(a) shall be allocated on a pro rata basis (i.e., based on the
outstanding principal amount of the Loans under Facility B and
Facility C and the outstanding principal amount of the Notes,
respectively, to the sum total of such amounts); (b) to the
extent payable to the Lenders, shall be paid firstly to the
Facility B Lenders, secondly to the Facility C Lenders and
thirdly, to the Facility A Lenders in accordance with each
Lender's respective Commitment under the relevant Facility; and
(c) to the extent payable to the holders of the Notes, shall be
offered by IPG to all holders of Notes, on a pro rata basis (in
accordance with the respective outstanding principal amounts of
the Notes then held by each such holder) as a prepayment thereof,
in each case, as provided in the Note Agreements. Any portion of
such proceeds which is refused by a holder of Notes, or for which
no response is received within the applicable delay following the
offer to prepay, shall be re-offered on a pro rata basis to those
holders of Notes which have accepted such offer in whole or in
part, the whole in accordance with the provisions of the Note
Agreement and the Inter-Creditor Agreement. To the extent that
the remaining proceeds are not accepted for prepayment by such
holders within the applicable delay, such proceeds shall be paid
to the Lenders as provided in clause (b) above. Notwithstanding
any other provision hereof, the Borrowers shall use reasonable
efforts to maximize the amount of the Loans allocated to Facility
B and Facility C on any date on which a Mandatory Repayment is to
be made, so as to maximize the pro rata share of the Lenders with
respect to any such Mandatory Repayment.
Notwithstanding the foregoing, the first US$5,000,000 of
Mandatory Repayments arising pursuant to subsection 9.2.2 shall
be applied firstly to repay the Loan without having to share
under the preceding paragraph. In addition, to the extent that
the aggregate amount of the Equity Interests or Debt issued as
described in subsection 9.2.1 exceeds the amount of the Loan
under Facility B, such excess amount shall be paid to the Lenders
alone, without Pro Rata Sharing, provided that no Default has
occurred and is continuing and no Event of Default has occurred
and has not been waived.
9.2.5 NO REIMBURSEMENT:
In no circumstances shall any Mandatory Repayment be reimbursed
to the Facility B/C Borrower.
All Mandatory Repayments under Section 9.2: (i) shall be applied
firstly to repay the Loan under Facility B, secondly to repay the
Loan under Facility C (in each case in inverse order of the
scheduled reductions under Section 9.1), and thirdly to reduce
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the Loan under Facility A, and (ii) shall result in a
corresponding permanent reduction in the amount of the Credit
available under firstly, Facility B and secondly Facility C. No
permanent reduction of Facility A will occur as a result of any
Mandatory Repayment, including any Mandatory Repayment arising
pursuant to the provisions of subsection 9.2.3 with respect to
insurance proceeds received in relation to Operating Assets,
saving the rights of the Lenders if a Default has occurred and is
continuing or if an Event of Default has occurred and not been
waived.
The relevant Borrower(s) shall advise the Agent of its intention
to make any Mandatory Repayment by notice in writing at least 3
Business Days before the Mandatory Repayment is due.
9.3 VOLUNTARY PREPAYMENT, REDUCTION AND CANCELLATION OF THE CREDIT
On any Business Day during the Term, after having given notice to the
Agent at least five (5) days prior thereto, the Borrowers may, subject
to the provisions of Section 9.5, cancel any portion of the Credit
under Facility A, Facility B or Facility C which is not then drawn by
the Borrowers or which the Borrowers will repay prior to or
contemporaneously with such cancellation. No Standby Fee shall be
payable in respect of any portion of the Credit cancelled pursuant to
the provisions of this Article 9 as and from the effective date of its
cancellation. No Borrower shall be permitted to draw Advances in
respect of any portion of the Credit so cancelled.
In addition, on any Business Day during the Term, upon the same notice
prior to the proposed prepayment and without penalty, a Borrower may
repay or prepay in minimum amounts of US$1,000,000, or in whole
multiples of such amount, all or part of the principal amount of the
Loan, provided that in respect of any Libor Advance, no repayment may
be made on a day other than the maturity date of such Advance, save as
provided in Sections 8.2 and 9.4, and in respect of any BA Advance no
prepayment shall be made on a date other than a maturity date of the
related Bankers' Acceptances outstanding at such time, save as provided
in Sections 8.2 and 9.4, with, in each case, all interest accrued and
unpaid on the amounts so prepaid. Notwithstanding the foregoing, such
Borrower shall provide to the Lenders, contemporaneously with its
repayment and in accordance with the provisions of Section 6.10, cash
deposits in an amount equal to the Bankers Acceptances in circulation.
9.4 PAYMENT OF LOSSES RESULTING FROM A PREPAYMENT
If a prepayment or Mandatory Repayment in respect of any BA Advance or
Libor Advance is made pursuant to the provisions of this Article 9 on a
date other than the last day of the applicable Designated Period, then
the relevant Borrower(s) shall pay to the Lenders the losses, costs and
expenses suffered or incurred by the Lenders with respect to such
prepayment or Mandatory Repayment, in each case as and to the extent
required by Section 8.2 and Section 8.3, if applicable.
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9.5 VOLUNTARY REDUCTIONS OF THE CREDIT
Each partial cancellation of the Credit under Section 9.3 shall be
applied first to the scheduled reductions for Facility B, second to the
scheduled reductions for Facility C and then to Facility A, in inverse
order of maturity for Facility B and Facility C.
9.6 CURRENCY OF MANDATORY REPAYMENTS AND PAYMENTS
All payments, repayments, prepayments or Mandatory Repayments, as the
case may be:
9.6.1 of principal under the Loan, or any part thereof, shall be
made in the same currency as that in which such principal (or
part thereof) is outstanding;
9.6.2 of interest, shall be made in the same currency as the
principal amount outstanding to which they relate;
9.6.3 of Fees, shall be made in U.S. Dollars alone; and
9.6.4 of the amounts referred to in Section 8.2, shall be made in
the same currency as the losses, costs and expenses suffered or
incurred by the applicable Lender.
9.7 PAYMENTS BY THE BORROWERS TO THE AGENTS
All payments to be made by the Borrowers in connection with this
Agreement shall be made in funds having same day value to the
applicable Agent (as determined pursuant to Section 18.19) at its
Branch, or at any other office or account in Canada or the United
States of America designated by such Agent, except that payments in
respect of Swing Line Advances shall be so made to the Swing Line
Lenders as directed by them. Any such payment shall be made on the date
upon which such payment is due, in accordance with the terms hereof, no
later than 11:00 A.M., New York time.
9.8 PAYMENT ON A BUSINESS DAY
Each time a payment, repayment, prepayment or Mandatory Repayment is
due on a day which is not a Business Day, it shall be made on the
previous Business Day, except in the case of Swing Line Loans where it
shall be made on the next Business Day.
9.9 PAYMENTS BY THE LENDERS TO THE AGENTS
Any amounts payable to an Agent by a Lender shall be paid in funds
having same day value to the Agent by such Lender on a Business Day at
the applicable Branch.
9.10 PAYMENTS BY THE AGENT TO THE BORROWERS
Any amounts payable to the Borrowers by an Agent shall be paid by the
applicable Agent on a Business Day, in funds having same day value, to
the Canadian Borrowers' or the U.S. Borrowers' account, as the case may
be, located at such Agent's Branch.
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9.11 NETTING
On the date of any Advance or on a Rollover Date (a "TRANSACTION
DATE"), an Agent shall be entitled to net amounts payable on such date
by the Agent to a Lender against amounts payable in the same currency
on such date by such Lender to the Agent, for the account of the
Borrowers. Similarly, on any Transaction Date, each of the Borrowers
hereby authorizes each Lender to net amounts payable in one currency on
such date by such Lender to an Agent, for the account of such Borrower,
against amounts payable hereunder in the same currency on such date by
such Borrower to such Lender in accordance with the Agent's
calculations made in accordance with the provisions of this Agreement.
9.12 APPLICATION OF PAYMENTS
9.12.1 Except as otherwise indicated herein, all payments made to
an Agent by the Borrowers for the account of the Lenders shall be
distributed the same day by the Agent, in accordance with its
normal practice, in funds having same day value, among the
Lenders to the accounts last designated in writing by each Lender
to the Agent, pro rata in accordance with their respective
Commitments, subject to adjustment, if necessary, as a result of
any disproportion in Loans that may be owing to a Lender, whether
as a result of the Swing Line Loan or otherwise, or as a result
of the application of the other provisions of this Agreement
(including Section 8.2), and notice thereof shall be given to the
relevant Borrower(s) by the Agent within a reasonable delay.
9.12.2 Except as otherwise indicated herein or as otherwise
determined by the Lenders, all payments made to the Agent on
behalf of the Lenders by the Borrowers shall be applied by the
Lenders as follows:
(a) to the fees, costs, expenses and accessories
contemplated by Article 8, Section 15.6 and Section
19.5 or by the Security Documents;
(b) to all amounts due under Article 5 hereunder;
(c) to the repayment of the principal amount of the Loan
subject, in the case of prepayments and Mandatory
Repayments, to the imputation rules set out in Sections
9.2 and 9.5;
(d) to any other amounts due pursuant to this Agreement.
9.13 NO SET-OFF OR COUNTERCLAIM BY BORROWERS
All payments by the Borrowers shall be made free and clear of and
without any deduction for or on account of any set-off or counterclaim.
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9.14 DEBIT AUTHORIZATION
Each Agent is hereby authorized to debit each member of the Restricted
Group's account or accounts maintained from time to time at the Branch
or elsewhere, and to set off and compensate against any and all
accounts, credits and balances maintained at any time by any member of
the Restricted Group for the amount of any interest or any other
amounts due and owing hereunder from time to time payable by the
Borrowers, in order to obtain payment thereof, provided, however, that
the foregoing provision, insofar as it relates to amounts due and owing
in respect of Facility B or Facility C, and Facility A during any
Release Period arising pursuant to the provisions of the second
paragraph of Section 10.3, is subject to the applicable provisions of
the Inter-Creditor Agreement, if any. The Agent agrees to give notice
of any such debit, set off or compensation within a reasonable delay
thereafter, provided that the failure to give such notice shall not
invalidate any action taken by the Agent nor render it liable to any
member of the Restricted Group.
10 SECURITY
10.1 SECURITY FOR ADVANCES UNDER FACILITY A
As general and continuing security for the performance by the Facility
A Borrowers of their obligations to the Facility A Lenders in
connection with all Loans under Facility A in accordance with the terms
hereof and the Security Documents relating to Facility A, and of their
obligation to repay all amounts owing by them to such Lenders in
principal, interest and accessories hereunder and of their obligations
arising under any other undertaking given in connection herewith or
therewith, as any of the same are, from time to time, amended,
restated, amended and restated, extended or renewed, the Facility A
Borrowers shall:
10.1.1 execute and cause to be executed by each Restricted
Subsidiary that is not a Facility A Borrower a first-ranking
security agreement and hypothec charging Operating Assets
(subject only to Permitted Charges), in favour of, respectively,
the US Collateral Agent and the Canadian Collateral Agent, on
behalf of the Facility A Lenders, and register or publish same as
promptly as practicable thereafter wherever it would be necessary
or useful to do so in order to perfect or enforce same;
10.1.2 cause to be executed by IPG, LLC and each other Restricted
Subsidiary that is not a Facility A Borrower an unconditional
joint and several guarantee and postponement of claims, in favour
of the Agent, the US Collateral Agent and the Canadian Collateral
Agent, on behalf of the Facility A Lenders, of the obligations of
the Facility A Borrowers under this Agreement and the Security
Documents relating to Facility A;
10.1.3 [INTENTIONALLY DELETED];
10.1.4 by way of collateral security, transfer and assign and, to
the extent permitted by applicable Laws, cause to be transferred
and assigned to the Canadian Collateral Agent and the US
Collateral Agent on behalf of the Facility A Lenders, as their
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interests may appear, all right, title and interest in and to all
indemnities, proceeds, benefits and advantages arising under any
insurance policy or contract protecting the Persons mentioned in
subsection 10.1.1 and their Operating Assets, activities,
business interruption and third party liability against any form
of loss, or cause such agents on behalf of the Facility A Lenders
to be named in such policies as a named insured as their
interests may appear, and deliver to such agents certificates of
insurance with respect thereto in form and substance reasonably
satisfactory to the Agent; and
10.1.5 execute one or more promissory notes in favour of each
Lender for the full amount of its Commitment under Facility A.
10.2 SECURITY FOR ADVANCES UNDER FACILITY B AND FACILITY C
As general and continuing security for the performance by the Facility
B/C Borrower of its obligations to the Facility B and Facility C
Lenders in connection with all Loans under Facility B and Facility C in
accordance with the terms hereof and the Security Documents in relation
to Facility B and Facility C, for the performance of the Derivative
Obligations, and of the Facility B/C Borrower's obligation to repay all
amounts owing by the Facility B/C Borrower to the Facility B and
Facility C Lenders in principal, interest and accessories hereunder,
and of its obligations arising under any other undertaking given in
connection herewith or therewith, as any of the same are, from time to
time, amended, restated, amended and restated, extended or renewed, the
Facility B/C Borrower shall:
10.2.1 execute and cause to be executed by each of the Facility A
Borrowers and all other Restricted Subsidiaries, a second-ranking
security agreement and hypothec charging Operating Assets
(subject only to the interest of the Facility A Lenders and to
Permitted Charges), in favour of, respectively, the US Collateral
Trustee and the Canadian Collateral Trustee, on behalf of the
Facility B and Facility C Lenders and the holders of the Notes,
and register or publish same as promptly as practicable
thereafter wherever it would be necessary or useful to do so in
order to perfect or enforce same;
10.2.2 cause to be executed by IPG, LLC and all other Restricted
Subsidiaries other than Facility B/C Borrower an unconditional
joint and several guarantee and postponement of claims, in favour
of the US Collateral Trustee and the Canadian Collateral Trustee,
on behalf of the Facility B and Facility C Lenders, of the
obligations of the Facility B/C Borrower under this Agreement and
the Security Documents relating to Facility B and Facility C;
10.2.3 execute and cause to be executed by each other member of
the Restricted Group in favour of respectively, the Canadian
Collateral Trustee and the US Collateral Trustee, on behalf of
the Facility B and Facility C Lenders and the holders of the
Notes, a first-ranking (subject only to Permitted Charges and to
the Charges on the Operating Assets in favour of the Canadian
Collateral Agent and the US Collateral Agent on behalf of the
Facility A Lenders) hypothec, General
63
Security Agreement, debentures and, where applicable, mortgages
(except to the extent provided in the undertaking described in
subsection 11.1.21) charging all of its property and assets,
personal and real, wherever located (and/or, at the option of
such trustees or the Lenders, by way of a debenture or other
instrument containing the same Charges), except to the extent
otherwise provided therein, and cause to be registered as
promptly as practicable thereafter all appropriate financing
statements and applications for registration under the Uniform
Commercial Code provisions applicable in each State of the USA,
under the Personal Property Security Acts of each common law
province of Canada and under the Civil Code of Quebec, in each
case where it would be necessary or useful to do so in order to
perfect or enforce same, as well as all appropriate mortgage
registrations under the applicable legislation in each of such
states and provinces;
10.2.4 to the extent required by the Lenders, execute and cause
to be executed by each other member of the Restricted Group a
first-ranking assignment (subject only to Permitted Charges), by
way of collateral security, of the contracts governing or
evidencing intellectual property rights (to the extent that such
assignment is not prohibited by the terms of the agreements
governing such rights) in favour of, respectively, the US
Collateral Trustee and the Canadian Collateral Trustee on behalf
of the Facility B and Facility C Lenders and the holders of the
Notes and provide notification thereunder and register same as
promptly as practicable thereafter wherever it would be necessary
or useful to do so in order to perfect or enforce same;
10.2.5 [INTENTIONALLY DELETED]
10.2.6 by way of collateral security, transfer and assign and, to
the extent permitted by applicable Laws, cause to be transferred
and assigned to the Canadian Collateral Trustee and the US
Collateral Trustee on behalf of the Facility B and Facility C
Lenders and the holders of the Notes, as their interests may
appear, all right, title and interest in and to all indemnities,
proceeds, benefits and advantages arising under any insurance
policy or contract protecting the members of the Restricted Group
and their property, activities, business interruption and third
party liability against any form of loss, or cause such trustees
on behalf of the Facility B and Facility C Lenders and the
holders of the Notes to be named in such policies as a named
insured as their interests may appear, and deliver to such
trustees certificates of insurance with respect thereto in form
and substance reasonably satisfactory to the Agent. The interest
of such trustees in all proceeds of the insurance covering
Operating Assets shall be subordinated to the interests of the
Canadian Collateral Agent and the US Collateral Agent to the
extent provided in the Inter-Creditor Agreement;
10.2.7 execute and cause to be executed by IPG and each other
relevant Restricted Subsidiary a first ranking pledge of (i) the
shares or other Equity Interests of each Restricted Subsidiary
and (ii) all instruments evidencing Debt owing to such Person
from another member of the Restricted Group (in each case subject
only to
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Permitted Charges), in favour of the Canadian Collateral Trustee
and the US Collateral Trustee, as the case may be, on behalf of
the Facility B and Facility C Lenders and the holders of the
Notes, and register or publish same as promptly as practicable
thereafter whenever it would be necessary or useful to do so in
order to perfect or enforce same. In the case of a pledge by a
member of the Restricted Group organized under the laws of a
state of the United States of the shares or other Equity
Interests of another member of the Restricted Group organized
under the laws of Canada or any province thereof, such pledge
shall be limited to less than 662/3% of such shares or other
Equity Interests;
10.2.8 execute promissory notes in favour of each Lender for the
full amount of its Commitment under Facility B and Facility C;
and
10.2.9 execute and cause to be executed by all members of the
Restricted Group the Inter-Creditor Agreement and (in the case of
members of the Restricted Group organized under the laws of a
state of the United States) the Collateral Trust Indenture.
The Security described in this Section 10.2 shall rank pari passu
in the manner provided in the Inter-Creditor Agreement and the
other Security Documents with the security granted in favour of
the holders of the Notes. All hypothecs shall be granted for an
amount of Cdn.$1,000,000,000. Notwithstanding anything else to
the contrary herein, the Security under Facility B and Facility C
shall also secure all of the obligations of the Facility A
Borrowers during any Release Period arising pursuant to the
second paragraph of Section 10.3.
10.3 RELEASE PERIODS
At any time when IPG's ratio of Total Debt, determined as at the end of
each of the four most recently ended fiscal quarters of IPG, is less
than or equal to 250% of IPG's EBITDA for the period of four
consecutive fiscal quarters ended at the end of each of such four most
recently ended fiscal quarters of IPG, and it has maintained a credit
rating for each of its two previous fiscal quarters with respect to its
long-term, senior unsecured Debt of "BBB" or better by Standard &
Poor's or an equivalent credit rating by Xxxxx'x or an equivalent
agency acceptable to the Lenders (for the purpose of this paragraph,
the "CONDITIONS"), the Borrowers may send to the Agent a notice (the
"RELEASE NOTICE") requesting that, commencing on a date that is not
less than 10 Business Days after the date of the Release Notice (the
"RELEASE DATE"), the Lenders direct the Canadian Collateral Agent, the
US Collateral Agent, the Canadian Collateral Trustee and the US
Collateral Trustee not to enforce the Security described in subsections
10.1.1, 10.1.4, 10.2.1, 10.2.3, 10.2.4, 10.2.6 and 10.2.7 during the
Release Period (the "DIRECTION"). Upon receipt of all evidence that the
Agent or the Lenders may reasonably require to substantiate (i) the
validity of the Release Notice, and (ii) that the holders of the Notes
have agreed not to enforce any of the security granted in their favor
by the Restricted Group during the applicable Release Period, and
provided that the provisions of Section 10.3.6 have been met to the
Agent's and the Lenders' reasonable satisfaction, the Agent shall
forthwith notify the Borrowers, IPG and
65
the Lenders (the "AGENT'S NOTICE") that such is the case and the
Lenders shall issue the Direction. Thereafter, if either Condition is
not being met, the Agent shall send to the Borrowers a notice to that
effect (the date of such notice is herein referred to as the "RELEASE
TERMINATION DATE") and the Direction shall be deemed to no longer
apply. "RELEASE PERIOD" shall mean the period commencing on the Release
Date and terminating on the Release Termination Date.
In addition to the foregoing, at any time when IPG's ratio of (a) Total
Debt (determined as at the end of each of the four most recently ended
fiscal quarters of IPG) is less than or equal to 275% of IPG's EBITDA
for the period of four consecutive fiscal quarters ended at the end of
each of such four most recently ended fiscal quarters of IPG, and (b)
Total Debt to Total Capitalization is less than or equal to 40% as of
the end of the four most recently ended fiscal quarters, and IPG has
maintained a credit rating for each of its two previous fiscal quarters
with respect to its long-term, senior unsecured Debt of "BBB -" or
better by Standard & Poor's or an equivalent credit rating by Xxxxx'x
(for the purpose of this paragraph, the "CONDITIONS"), the Facility A
Borrowers may send to the Agent a Release Notice requesting that,
commencing on the Release Date, the Security described in subsections
10.1.1 and 10.1.4 shall rank pari passu with the Security granted
pursuant to Section 10.2 in favor of the Lenders under Facility B and
Facility C and in favor of the holders of the Notes, the whole as set
forth in the Inter-Creditor Agreement. The second, third and fourth
sentences of the preceding paragraph shall apply to this paragraph
mutatis mutandis. For greater clarity, the Security under Facility A
described in Section 10.1 may be enforced during the Release Period
under this paragraph, provided that no Release Period under the
preceding paragraph shall be in effect, but such enforcement shall be
subject to the applicable provisions of the Inter-Creditor Agreement.
Notwithstanding the preceding paragraphs, it is agreed that:
10.3.1 the registrations of the Security shall not be affected
during any Release Period;
10.3.2 the Margins, Stamping Fees and Letter of Credit fees shall
be negotiated between the parties as provided in the third
subsection of the term "Margin" and upon the expiry of any
Release Period, the original Margins, Stamping Fees and Letter of
Credit fees shall once again apply;
10.3.3 the conditions of subsection 13.14 hereof shall be met at
all times during any Release Period;
10.3.4 the percentage limitation on Priority Debt provided for in
subsection 14.2.1(c) shall become 12.5% during the Release Period
only;
10.3.5 each credit rating shall also be in full force and effect
at the time a Release Notice is given, not having been withdrawn
or placed on a credit watch or negative implication; and
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10.3.6 the Lenders shall not be obliged to send the Direction if
a Default or Event of Default existed on the date of the Release
Note or exists on the Release Date.
11 CONDITIONS PRECEDENT
11.1 INITIAL ADVANCE UNDER THE CREDIT
The obligation of the Lenders to make an initial Advance under the
Credit is conditional upon each of the following conditions having been
satisfied, together with the conditions set out in Section 11.2, to the
entire satisfaction of the Lenders and their legal counsel:
11.1.1 certified copies of all of the organizational documents,
by-laws and authorizing resolutions of each member of the
Restricted Group shall have been provided to the Canadian
Collateral Trustee and the US Collateral Trustee;
11.1.2 except as otherwise provided in the undertaking
contemplated by Section 11.1.21, all Charges on the property of
the Restricted Group, other than Permitted Charges, shall have
been discharged;
11.1.3 each of this Credit Agreement and the Security Documents
shall have been executed, delivered, issued or assigned and
registered or published, as the case may be, wherever required by
the Lenders;
11.1.4 all of the certificates or other instruments representing
the Securities and the debt instruments to be pledged pursuant to
the pledge agreements described in subsection 10.2.7 shall have
been remitted to the Canadian Collateral Trustee or the US
Collateral Trustee;
11.1.5 a confirmation shall have been received from IPG that,
with the exception of the Unrestricted Subsidiaries, all of IPG's
Subsidiaries (including Central Products Company and all the
companies mentioned in the first paragraph of subsection 11.1.13
hereof) as of the date hereof are and shall remain Restricted
Subsidiaries unless such Restricted Subsidiaries are sold,
transferred or dissolved as permitted in accordance with the
terms hereof;
11.1.6 IPG and the Restricted Subsidiaries shall have obtained
all necessary governmental, regulatory and other approvals and
all Laws, including Environmental Laws, shall have been complied
with in all material respects;
11.1.7 each member of the Restricted Group shall hold all
material permits and licences necessary to operate their
businesses and all of same shall be in good standing, including
all material environmental permits;
67
11.1.8 the December 31, 2000 year-end Consolidated financial
statements of IPG and its 4 year financial projections, including
projected financial statements and IPG's proposed capital
expenditure program, shall have been delivered to the Agent, and
shall be satisfactory to the Lenders;
11.1.9 the results of the due diligence conducted by the Agent
concerning the Restricted Group's operations, projections,
assets, legal situation and organizational structure, financial
and commercial status, environmental liability and compliance and
accounting systems and methods, shall be completely satisfactory
to the Lenders, acting reasonably;
11.1.10 the Agent shall have received copies of all title
opinions and title insurance and all environmental and search
reports it may reasonably require;
11.1.11 no Law shall be in effect that would materially adversely
affect the ability of any member of the Restricted Group to
perform its obligations under this Agreement and the Security
Documents or to provide the Security;
11.1.12 each of IPG and the Borrowers shall have delivered to the
Agent a certificate in the form of Schedule "E" signed by a
Responsible Officer stipulating and certifying that:
(a) such officer has taken cognizance of all the terms and
conditions of this Agreement, the Security Documents
and of all contracts, agreements and deeds pertaining
hereto;
(b) (i) nothing has come to such officer's attention, after
due inquiry, that would cause him/her to believe that
the financial results and statements contained in the
issued financial statements of IPG, as delivered, are
materially inaccurate or false in any manner
whatsoever, and (ii) any projected financial
information provided to the Agent is (a) based on
reasonable, good faith assumptions on the part of IPG
and (b) has been prepared in accordance with GAAP as in
effect at the date of the certificate;
(c) all representations and warranties contained in this
Agreement continue to be true and correct in all
material respects (except where stated to be made as of
one specific date alone);
(d) no Default has occurred and is continuing and no Event
of Default has occurred which has not been waived; and
(e) each member of the Restricted Group holds the permits,
licences and authorizations required in order to permit
it to
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possess its property and its real estate and to carry
on its business in the manner in which it is being
carried on at present;
11.1.13 there shall have been delivered to the Agent a written
undertaking from the Facility B/C Borrower and each of the
Facility B/C Borrower's Subsidiaries, including LLC and Canco,
pursuant to which each of them undertakes that for so long as any
of the Borrowers or IPG has any obligations to the Agent and the
Lenders hereunder:
(a) it shall not carry on any business, except as provided
in Section 14.3;
(b) it shall not, individually or collectively, incur or
have at any time any Indebtedness, except to a
Wholly-owned Restricted Subsidiary, and Indebtedness
constituting Guarantees in respect of the Loan, the
Notes or any facility which replaces Facility A upon
the expiry of its Term, in excess of an aggregate
amount of US $100,000, and, in the case of the Facility
B/C Borrower, any Indebtedness permitted hereunder;
(c) LLC shall not assign or transfer its rights against any
Restricted Subsidiary with respect to amounts owed to
it by such Restricted Subsidiary to any Person other
than a member of the Restricted Group, except as
provided in the pledge agreements described in
subsection 10.2.7 or as security for its Guarantee in
respect of any facility which replaces Facility A upon
expiry of its Term;
11.1.14 the Collateral Trust Indenture and the Inter-Creditor
Agreement shall have been entered into, in form and substance
satisfactory to the Agent, the Lenders, the holders of the Notes
and the other parties thereto;
11.1.15 the Note Agreements shall have been amended and restated
as contemplated by the definition thereof to ensure that the Loan
under Facility A forms part of Priority Debt and in form and
substance otherwise reasonably acceptable to the Lenders;
11.1.16 evidence shall have been provided to the Agent that on
September 30, 0000, XXX had a ratio of Total Debt to EBITDA (for
the four fiscal quarters ended September 30, 2001, treated as a
single accounting period) not exceeding 5.8:1;
11.1.17 a Responsible Officer of LLC shall have certified in
writing that LLC has not made any loans or advances to any Person
other than to IPG (US) Inc.;
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11.1.18 the Borrowers shall have delivered to the Agent the
favourable legal opinion of the counsel to the Restricted Group,
addressed to the Lenders and the Agent, in form and substance
satisfactory to the Agent, covering such matters pertaining to
the transactions contemplated hereunder as are required by the
Agent, acting reasonably;
11.1.19 each of the Existing Credit Facilities and the existing
Creditor Agreement dated as of June 10, 1999, as amended, shall
have been cancelled;
11.1.20 the Borrowers and the Agent shall have executed a fee
letter, satisfactory to the Agent, with respect to the agency fee
described in subsection 5.14.6;
11.1.21 the Borrowers shall have delivered to the Agent an
undertaking in form and in substance satisfactory to the Agent,
which undertaking shall relate to, without limitation, the
registration of the Security (including any registrations
specific to intellectual property), environmental matters, the
discharge of Charges for which no Debt is outstanding, and the
delivery of certain leasehold mortgages, lease amendments,
landlord consents and title commitments; and
11.1.22 the Restricted Group shall have executed a US
environmental indemnification agreement (the "US ENVIRONMENTAL
INDEMNIFICATION AGREEMENT") and a Canadian environmental
indemnification agreement (the "CANADIAN ENVIRONMENTAL
INDEMNIFICATION AGREEMENT") satisfactory to the Lenders.
11.2 CONDITIONS PRECEDENT TO ANY ADVANCE
The obligation of the Lenders to make any Advance under the Credit is
conditional upon each of the following conditions having been
satisfied:
11.2.1 the representations and warranties contained in this
Agreement shall continue to be true and correct in all material
respects (except where stated to be made as at a particular
date);
11.2.2 the Borrowers shall have paid all amounts due to the
Agent, the Arrangers and the Lenders up to the date of such
proposed Advance, whether on account of Fees, disbursements or
related matters;
11.2.3 subject to the provisions of Section 4.4, the relevant
Borrower(s) shall have delivered to the Agent a completed Notice
of Borrowing;
11.2.4 nothing shall have occurred since December 31, 2000 which
would constitute a Material Adverse Change, except as set forth
in Schedule "M" hereto; and
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11.2.5 no Default shall have occurred and be continuing and no
Event of Default shall have occurred which has not been waived.
Notwithstanding the provisions of paragraphs 11.2.4 and 11.2.5 hereof the
Lenders accept the Material Adverse Changes and the Defaults and Events of
Default that have occurred prior to the date hereof, as described in Schedule
"M" hereto, and waive their right to invoke same, provided that such waiver
shall have no effect on any Default or Event of Default occurring during the
Term, whether or not similar in nature.
12 REPRESENTATIONS AND WARRANTIES
For so long as the Loan or any other amounts payable to the Lenders and the
Agent hereunder remain outstanding and unpaid, or any of the Borrowers is
entitled to borrow hereunder (whether or not the conditions precedent to such
borrowing have or may be satisfied), each of IPG, LLC and the Borrowers hereby
represents and warrants to the Lenders that:
12.1 INCORPORATION
Each member of the Restricted Group is a corporation duly incorporated
or a limited partnership or limited liability company duly constituted,
and is organized, validly existing and in good standing under the Laws
of its jurisdiction of incorporation or constitution and of all
jurisdictions in which it carries on business or is otherwise required
to be so qualified. Each member of the Restricted Group has the
capacity and power, whether corporate or otherwise, to hold its assets
and carry on the business presently carried on by it or which it
proposes to carry on hereafter in each jurisdiction where such business
is carried on.
12.2 AUTHORIZATION
Each member of the Restricted Group has the power and has taken all
necessary steps under the Law in order to be authorized to borrow
hereunder (if such Person is a Borrower), to provide the Security to be
provided by such Person under the relevant Security Documents, and to
execute and deliver and perform its obligations under this Agreement
and each of the Security Documents to which it is a party in accordance
with the terms and conditions thereof and to complete the transactions
contemplated herein and in such Security Documents. This Agreement has
been duly executed and delivered by duly authorized officers of each of
the Borrowers, IPG and LLC and is, and each of the Security Documents
to which each member of the Restricted Group is a party is, a legal,
valid and binding obligation of such member of the Restricted Group,
enforceable in accordance with its terms.
12.3 COMPLIANCE OF THIS AGREEMENT
Except for the consents and approvals to be obtained pursuant to the
undertaking referred to in subsection 11.1.21, the execution and
delivery of and performance of the obligations under this Agreement and
each of the Security Documents in accordance with their respective
terms and the completion of the transactions contemplated therein and
herein do
71
not require any consents or approvals which have not been obtained, do
not violate any Laws, do not conflict with, violate or constitute a
breach under the documents of incorporation or by-laws of any member of
the Restricted Group or under any agreements, contracts or deeds to
which any member of the Restricted Group is a party or binding upon it
or its assets and do not result in or require the creation or
imposition of any Charge whatsoever on the assets of any member of the
Restricted Group, whether presently owned or hereafter acquired, save
for Permitted Charges.
12.4 BUSINESS
IPG and its Subsidiaries develop, manufacture, distribute and sell, to
retail, wholesale and other end-users, a variety of plastic packaging
products, tape, acrylic coatings, woven products, flexible intermediate
bulk containers and machines that apply xxxx.Xx member of the
Restricted Group is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock, and no proceeds of any
Advances will be used to purchase or carry any equity "security" (as
defined in Section 3.1) of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended, or any
"margin stock", as defined in Federal Reserve System Board of Governors
Regulation U, or for a purpose which violates, or would be inconsistent
with, Federal Reserve System Board of Governors Regulation T, U or X.
Terms used in this paragraph for which meanings are provided in Federal
Reserve System Board of Governors Regulation T, U or X or any
regulations substituted therefor, as from time to time in effect, have
the meaning so provided.
No member of the Restricted Group 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, as amended (15 U.S.C. ss. 80a-1 et seq.). The
application of the proceeds of the Advances and repayment of the Loans
by the Borrowers and the performance by the Restricted Group of the
transactions contemplated hereunder and under the Security Documents
will not violate any provision of the said Act, or any rule, regulation
or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof. No member of the
Restricted Group is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Interstate
Commerce Act, or under any other Law which may limit its ability to
incur Debt or which may otherwise render its obligations hereunder or
under the Security Documents unenforceable, except that its ability to
incur Debt other than the Loan may be limited by fraudulent conveyance
Laws and other Laws of a similar nature.
12.5 FINANCIAL STATEMENTS
The Consolidated financial statements dated December 31, 2000, March
31, 2001, June 30, 2001 and September 30, 2001 and those delivered from
time to time in accordance with the provisions hereof have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods specified (except as noted thereon) and are an
accurate representation of the financial position of the members of the
Restricted Group to which they relate as of the respective dates
specified and the results of their operations and changes in financial
position for the respective periods specified.
72
12.6 CONTINGENT LIABILITIES AND INDEBTEDNESS
No member of the Restricted Group has (a) any material contingent
liabilities known to it which are not disclosed or referred to in the
most recent financial statements delivered to the Agent in accordance
with the provisions of Section 13.16 or otherwise disclosed to the
Agent in writing, or (b) incurred any Indebtedness, which is not
disclosed in or reflected in such financial statements, or otherwise
disclosed to the Agent in writing, other than Indebtedness incurred in
the ordinary course of business and Debt permitted hereunder.
12.7 TITLE TO ASSETS
Each member of the Restricted Group has good, valid and marketable
title to all of its owned real property and valid title to all of its
other material properties and assets, free and clear of any Charges
other than Permitted Charges.
12.8 LITIGATION
Except as set out in Schedule "H" annexed hereto, on the date hereof,
there are no actions, suits or legal proceedings instituted or pending
nor, to the knowledge of the Restricted Group, threatened, against any
member of the Restricted Group or its property before any court or
arbitrator or any governmental body or instituted by any governmental
body which, if decided against any member of the Restricted Group,
could, individually or in the aggregate, constitute a Material Adverse
Change.
12.9 TAXES
Each member of the Restricted Group has filed within the prescribed
delays all material federal, state, provincial or other tax returns
which it is required by Law to file and all material taxes, assessments
and other duties levied by the various governmental authorities with
respect to each member of the Restricted Group have been paid when due,
except to the extent that (a) payment thereof is being contested in
good faith by the Restricted Group in accordance with the appropriate
procedures, for which adequate reserves have been established in the
books of the Restricted Group, and (b) the outcome of such
contestation, if decided against the Restricted Group, could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change. The tax identification numbers of each of the
Borrowers is set forth in Schedule "N".
12.10 INSURANCE
Each member of the Restricted Group has contracted for the insurance
coverage described in Section 13.6.
12.11 NO ADVERSE CHANGE
Except as disclosed in Schedule "M", no Material Adverse Change,
considered on a Consolidated basis, has occurred since December 31,
2000.
73
12.12 REGULATORY APPROVALS
No member of the Restricted Group is required to obtain any consent,
approval, authorization, permit or licence from, nor to effect any
filing or registration with, any federal, provincial or other
regulatory authority in connection with the execution, delivery or
performance, in accordance with their respective terms, of this
Agreement or the Security Documents, any borrowings hereunder and the
granting of the Security, save with respect to the registration,
publication or recording of certain of the Security Documents and the
filing of financing statements and other documents in connection
therewith.
12.13 COMPLIANCE WITH LAWS
Each member of the Restricted Group is in material compliance with all
requirements of applicable Laws (including Environmental Laws) and with
all of the material conditions attaching to its permits,
authorizations, licenses, certificates and approvals, including without
limitation its articles of incorporation and by-laws.
12.14 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the transactions contemplated hereby nor the use of the
proceeds of any Advances hereunder will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter
V, as amended) or any enabling legislation or executive order relating
thereto. IPG and the Restricted Subsidiaries are in compliance with the
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act, 22 U.S.C. ss.
6021 et seq.
12.15 PENSION AND EMPLOYMENT LIABILITIES, COMPLIANCE WITH ERISA
12.15.1 Except as would not result in a liability in excess of
US$3,000,000, all past and current compensation obligations
(including wages, salaries, commissions and vacation pay) to
current and former employees of the Restricted Group have been
paid or accrued in full.
12.15.2 Each Plan (other than a Multiemployer Plan) has been
operated and administered in compliance with all applicable Laws
except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a liability
in excess of US $3,000,000. Neither IPG nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA
(other than normal funding obligations and PBGC premiums) or
Chapter 43 of the Code, and no event, transaction or condition
has occurred or exists that could reasonably be expected to
result in the incurrence of any such liability by IPG or any
ERISA Affiliate, or in the imposition of any Charge on any of the
rights, properties or assets of IPG or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or Chapter 43 or
Section 401(a)(29) or 412 of the Code, other than such
liabilities or Charges as would not, individually or in the
aggregate, be expected to result in a liability in excess of US
$3,000,000.
74
12.15.3 Except as disclosed on Schedule "H" hereto, neither IPG
nor any ERISA Affiliate has incurred any accumulated funding
deficiency (within the meaning of Section 412 of the Code).
Except as disclosed on Schedule "H" hereto, the present value of
the aggregate benefit liabilities under each of the Plans (other
than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such
Plan's most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such Plan allocable to
such benefit liabilities. Thereafter, the present value of the
aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan's
most recently ended plan year on the basis of the actuarial
valuation report, will not exceed the aggregate current value of
the assets of such Plan allocable to such benefit liabilities by
an amount in excess of $3,000,000. The term "BENEFIT LIABILITIES"
has the meaning specified in Section 4001 of ERISA and the terms
"CURRENT VALUE" and "PRESENT VALUE" have the meaning specified in
Section 3 of ERISA.
12.15.4 The expected post-retirement benefit obligation
(determined as of the last day of IPG's and its Subsidiaries'
most recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by
Section 4980B of the Code) of IPG and its Subsidiaries has been
disclosed in the appropriate financial statements and, in any
event, would not be expected to result in a liability in excess
of US $3,000,000.
12.15.5 Assuming none of the Lenders is using the assets of any
employee benefit plan subject to Title I of ERISA or any "plan"
(within the meaning of Section 4975(e) of the Code), to make the
Loan, the execution and delivery of this Agreement and the
borrowings hereunder will not involve any transaction that is
subject to the prohibitions of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section
4975 of the Code with respect to the employee benefit plans of
IPG or any ERISA Affiliate.
12.15.6 Notwithstanding anything in this Section 12.15 to the
contrary, the liabilities and other items that are subject to a
$3,000,000 limit under this Section 12.15 shall not exceed
$3,500,000 in the aggregate. Further, as of January 1, 2003, (a)
any reference in this Section 12.15, subsection 13.17.2 and
Section 14.8 to "$3,000,000" shall be deleted and replaced by a
reference to "$2,500,000", and (b) the reference in this Section
12.15 to "$3,500,000" shall be deleted and replaced by a
reference to "$3,000,000".
12.16 PRIORITY
The Security Documents bind each member of the Restricted Group which
is a party thereto, and the Charges created thereby are valid and
subject to no Charge, other than Permitted Charges, and are enforceable
against such member of the Restricted Group, as
75
security for the performance of its obligations secured thereby, in
accordance with the respective terms of such Security Documents.
The Loan under Facility A constitutes Priority Debt and the Charges
created, evidenced or constituted by or under the Security Documents in
relation to Facility A constitute first ranking Charges on Operating
Assets of the Facility A Borrowers and the other Restricted
Subsidiaries, subject to Permitted Charges. The right of the Lenders
hereunder and under the Security Documents in relation to Facility B
and Facility C shall rank, at all times, at least pari passu with all
the senior, secured Indebtedness of the Restricted Group, save and
except as permitted pursuant to Section 10.3 or subsection 14.2.1(c),
subject to Permitted Charges.
Notwithstanding the foregoing and with respect to Facility A only,
during any applicable Release Period, the rights of the Lenders
hereunder and the Guarantees shall rank, at all times, at least pari
passu with all of the senior Indebtedness (including the Loans under
Facility B and Facility C) of the Restricted Group, save and except as
permitted pursuant to Section 10.3 or subsection 14.2.1(c), subject to
Permitted Charges.
As of November 30, 2001, the aggregate principal amount of Priority
Debt (other than Priority Debt attributable to Facility A, Debt owing
under the Existing Credit Facilities and Debt owed to the holders of
the Notes) is US$2,836,200.
12.17 COMPLETE AND ACCURATE INFORMATION
All of the information, reports and other documents and all data, as
well as the amendments thereto, provided to the Agent by or on behalf
of the Restricted Group were, at the time same were provided, and if
the same were provided prior to the Closing Date, are at the Closing
Date (except to the extent that such information, reports, other
documents and data relate to an earlier date), complete, true and
accurate in all material respects to the extent necessary to provide
the Lenders with a true and accurate understanding of their effect.
12.18 EVENT OF DEFAULT
No Default has occurred and is continuing, and no Event of Default has
occurred which has not been waived, in each case, save as provided in
the last paragraph of Section 11.2.
12.19 AGREEMENTS WITH THIRD PARTIES
Each member of the Restricted Group is in compliance in all material
respects with each and every one of its obligations under agreements
with third parties to which it is a party or by which it is bound, the
breach of which could reasonably be expected to result in a Material
Adverse Change.
12.20 ENVIRONMENT
12.20.1 Except as disclosed in Schedule "P" hereto, there are no
existing claims, demands, damages, expenses, suits, proceedings,
actions, negotiations or causes of action of any nature
whatsoever, whether threatened in writing or pending, against
76
any member of the Restricted Group arising out of the presence on
any property owned or controlled by the Restricted Group, either
past or present, of any Hazardous Substance, or out of any past
or present activity conducted on any property now owned by the
Restricted Group, whether or not conducted by the Restricted
Group, involving Hazardous Substances which would reasonably be
expected to result in a Material Adverse Change;
12.20.2 To the best of the knowledge of the Borrowers, LLC and
IPG and except as disclosed in Schedule "P" hereto, after due
enquiry:
(a) there is no Hazardous Substance existing on or under any
property of the Restricted Group which constitutes a
violation of any Environmental Law for which an owner or
person in control of a property may be held liable and which
could reasonably be expected to result in a Material Adverse
Change;
(b) the business of the Restricted Group is being carried on so
as to be in compliance in all material ways with all
Environmental Laws and all Laws applicable to health and
safety matters;
(c) no Hazardous Substance has been spilled or emitted in
reportable quantities into the environment from any property
owned or controlled by any member of the Restricted Group
which could reasonably be expected to result in a Material
Adverse Change;
(d) there are no pending or proposed changes to the
Environmental Laws which would render illegal or restrict
the manufacture or sale of any products manufactured or sold
or services provided by the Restricted Group which would
reasonably be expected to result in a Material Adverse
Change;
(e) compliance by the members of the Restricted Group with all
current Environmental Laws would not reasonably be expected
to result in a Material Adverse Change;
(f) no member of the Restricted Group is in default in filing
any material report or information with any governmental
authority as required pursuant to Environmental Laws; and
(g) each member of the Restricted Group has maintained, in all
material respects, all environmental and operating documents
77
and records substantially in the manner required by all
Environmental Laws.
As at the Closing Date, none of the facts described in Schedule
"P" would, in the opinion of the Restricted Group, reasonably be
expected to result in a Material Adverse Change.
12.21 SOLVENCY
The Restricted Group is, in the aggregate, solvent and will continue to
be solvent after the creation of its obligations hereunder and under
the Security Documents, is able to pay its debts as they mature and has
(and has reason to believe it will continue to have) sufficient capital
to pay its debts as they mature and to carry on all businesses in which
it shall engage.
12.22 EXISTING SUBSIDIARIES
As of the Closing Date, the Restricted Subsidiaries are listed in
Schedule "D" (which include all of the Subsidiaries described as such
under the amended and restated credit agreement dated as of September
15, 2000 among TD and certain members of the Restricted Group, except
for Drumheath, Intertape Polymer Exports Inc. and certain entities no
longer in existence) and the only Unrestricted Subsidiaries are listed
in Schedule "J". All manufacturing operations of the Restricted Group
are conducted by Central Products Company and Intertape Inc., Intertape
Polymer Inc., International Container Systems, Inc. and Cajun Bag &
Supply Corp.
12.23 LOCATION OF ASSETS AND HEAD OFFICES
The jurisdiction of incorporation and the location of the assets and
head offices of each member of the Restricted Group is as set forth in
Schedule "N" hereto.
12.24 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the statements contained in any certificate, attestation,
financial statements, reports, statements, data or other documents
delivered to the Lenders by or on behalf of the Restricted Group,
including under or pertaining to this Agreement, the Security Documents
or any other document contemplated hereby, and any amendments thereto,
or pertaining to any transactions contemplated therein or hereby,
constitute representations and warranties made hereunder, subject to
the limits and restrictions stipulated herein or in such documents. All
of the representations and warranties made hereunder are true and
correct at the date hereof and shall be true and correct at the date of
any Advance hereunder (except in each case where stated to be made
solely at a particular date), shall survive the execution and delivery
of this Agreement, any investigation by or on behalf of the Agent or
the Lenders or the making of any Advance hereunder and none of same are
nor shall be waived, except in writing.
78
13 POSITIVE COVENANTS
For so long as the Loan remains outstanding and unpaid, or any Borrower
is entitled to borrow hereunder (whether or not the conditions
precedent to such borrowing have or may be satisfied) and unless the
Lenders, acting through the Agent, shall otherwise agree in writing,
each of the Borrowers, LLC and IPG, for itself and each member of the
Restricted Group and with respect to itself and each member of the
Restricted Group, agrees as follows:
13.1 PRESERVATION OF JURIDICAL PERSONALITY
It shall do or cause to be done all things necessary to preserve and
maintain its existence in full force and effect, provided, however,
that the foregoing shall not prevent any transaction permitted by
Section 14.1.
13.2 PRESERVATION OF LICENSES
It shall maintain in effect and obtain, where necessary, all such
authorizations, approvals, permits, licences or consents of such
governmental agencies, whether federal, state, provincial or local,
which may be or become necessary or required for each member of the
Restricted Group to satisfy its obligations hereunder and under the
Security Documents.
13.3 COMPLIANCE WITH APPLICABLE LAWS
It shall conduct its business in a proper and efficient manner and
shall keep or cause to be kept appropriate books and records of
account, in compliance with the Law, and shall record or cause to be
recorded faithfully and accurately all transactions with respect to its
business in accordance with GAAP applied on a consistent basis, and
shall comply with all material requirements of Law and with all the
conditions attaching to its permits, authorizations, licences,
certificates and approvals including the Occupational Safety and Health
Act of 1970, as amended and ERISA.
13.4 MAINTENANCE OF ASSETS
It shall maintain or cause to be maintained in good operating condition
all of its assets used or useful in the conduct of its business
(ordinary wear and tear excepted), as would a prudent owner of similar
property, whether same are held under lease or under any agreement
providing for the retention of ownership, and shall from time to time
make or cause to be made thereto all necessary and appropriate repairs,
renewals, replacements, additions, improvements and other works. It
shall inform the Agent of any change required to Schedule "N" hereto.
13.5 BUSINESS
It will continue to carry on substantially the same type of business
currently carried on and activities which are ancillary, incidental or
necessary to its ongoing business as presently conducted, and will not
change the nature of its business activities as described in Section
12.4 without the prior written consent of the Agent on behalf of the
Lenders.
79
13.6 INSURANCE
It will maintain insurance coverage by financially sound and reputable
insurers in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the
same or a similar business and owning and operating similar properties
in accordance with good business practice and, in any event, in amounts
and against risks acceptable to the Agent on behalf of the Lenders,
acting reasonably. All relevant policies of insurance will name the
Canadian Collateral Agent, the US Collateral Agent, the Canadian
Collateral Trustee and the US Collateral Trustee as a named insured (as
applicable), as their interests may appear, and contain a standard
"mortgage clause" acceptable to the Agent providing that no such policy
may be cancelled or modified without the insurer providing not less
than 30 days' prior written notice to the Agent. The insurance policies
confirming the insurance required hereunder shall not contain any
co-insurance provisions except to the extent such co-insurance
provisions would normally appear in policies covering other Persons
engaged in similar businesses and owning similar properties as the
Restricted Group, and consistent with prudent business practices.
If any proceeds of such insurance policies become payable at any time,
such insurance proceeds shall be disbursed in accordance with the
provisions of the Inter-Creditor Agreement.
Any proceeds to be paid to the Agent for the benefit of the Lenders as
a Mandatory Repayment shall be applied to repay the Loan, and the
Credit under Facility B will first be reduced by an amount equal to the
amount of such Mandatory Repayment and then, once Facility B has been
repaid and the Credit thereunder cancelled, the Credit under Facility C
will be reduced by an amount equal to the remainder of such Mandatory
Repayment, except, in all cases, for such proceeds arising in relation
to Operating Assets, which shall be so paid as a Mandatory Repayment of
Facility A.
13.7 PAYMENT OF TAXES AND DUTIES
It shall pay all taxes, assessments and other governmental duties which
are imposed on it or on its income or profits or its assets, when due
and payable, provided that no such tax, assessment or duty need be paid
if (a) it is being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted and (b) such reserves or
other appropriate provision, if any, as shall be required by GAAP shall
have been made therefor, and (c) the outcome of such contestation, if
decided adversely to any member of the Restricted Group, would not
reasonably be expected to result in a Material Adverse Change,
considered on a Consolidated basis.
13.8 ACCESS AND INSPECTION
It shall allow, at its own expense, the employees and representatives
of the Agent, during normal business hours, to have access to and
inspect, in conjunction with IPG, the assets of the Restricted Group,
to inspect and take extracts from or copies of the books and records of
the Restricted Group and to discuss the business, assets, liabilities,
financial position, operating results or business prospects of the
Restricted Group with the principal officers of
80
the Restricted Group and, after obtaining the approval of the Borrowers
which shall not be unreasonably withheld, with the auditors of the
Restricted Group.
13.9 MAINTENANCE OF ACCOUNT
It shall maintain an operating account at the Branch of the Agent at
all times during the Term, as well as an account with each Swing Line
Lender at all times during the Term of Facility A.
13.10 PERFORMANCE OF OBLIGATIONS
It shall perform all obligations in accordance with usual and customary
business terms, except to the extent that the non-fulfilment of same
would not reasonably be expected to result in a Material Adverse
Change, considered on a Consolidated basis, and except where the same
are being contested in good faith, if the outcome of such contestation,
if decided adversely to any member of the Restricted Group, would not
reasonably be expected to result in a Material Adverse Change,
considered on a Consolidated basis. Notwithstanding the foregoing
contained in this Section 13.10, it shall punctually pay all amounts
due or to become due under this Agreement.
13.11 MAINTENANCE OF RATIOS
IPG shall maintain:
13.11.1 at all times during the Term, a ratio of Total Debt to
Consolidated Total Capitalization not exceeding the following:
81
Period Ratio
------ -----
On or prior to March 30, 2002: 0.59:1
-------
From March 31, 2002 to June 29
2002: 0.585:1
-------
From June 30, 2002 to September
29, 2002: 0.58:1
-------
From September 30, 2002 to
December 30, 2002: 0.575:1
-------
From December 31, 2002 to March
30, 2003: 0.57:1
-------
From March 31, 2003 to June 29
2003: 0.565:1
-------
From June 30, 2003 to September
29, 2003: 0.56:1
-------
On September 30, 2003 and
thereafter during the Term: 0.55:1
-------
13.11.2 at the end of each fiscal quarter of IPG during the Term,
a Consolidated ratio of Net Income Available for Fixed Charges to
Fixed Charges for the immediately preceding period of four
consecutive fiscal quarters including the fiscal quarter ending
on the calculation date (taken as a single accounting period) of
not less than:
Period Ratio
------- -----
On or prior to September 30, 2002: 1.75:1
------
On December 31, 2002 and March
31, 2003 1.85:1
------
On June 30, 2003 and thereafter: 2.00:1
------
13.11.3 at all times during the Term, a minimum Consolidated Net
Worth equal to the sum total of US $275,000,000 and (i) 50% of
positive Consolidated Net Income for the period commencing
October 1, 2001 through the end of IPG's most
82
recently ended fiscal quarter (i.e. without any deduction for net
losses) plus (ii) an amount equal to the aggregate net proceeds
of any issuance of equity Securities during the Term to any
Person other than a member of the Restricted Group;
13.11.4 at the end of each fiscal quarter of IPG during the Term,
a ratio of Total Debt to EBITDA for the immediately preceding
period of four consecutive fiscal quarters including the fiscal
quarter ending on the calculation date (taken as a single
accounting period) not exceeding the lesser of:
(a)
Period Ratio
------ ------
On December 31, 2001: 6.00:1
------
On March 31, 2002: 5.75:1
------
On June 30, 2002: 5.50:1
------
On September 30, 2002: 5.25:1
------
On December 31, 2002: 5.00:1
------
On March 31, 2003: 4.75:1
------
On June 30, 2003: 4.50:1
------
On September 30, 2003: 4.25:1
------
On December 31, 2003, March 31,
2004 and June 30, 2004: 4.00:1
------
On September 30, 2004, December
31, 2004, March 31, 2005 and June
30, 2005: 3.50:1
------
On September 30, 2005 and
December 31, 2005 3.25:1
------
or
(b) beginning with the March 31, 2002 results (i.e.
commencing with the ratio to be applicable in respect of the
period ending June 30, 2002), the actual ratio of Total Debt
to EBITDA reported to the Agent in respect of the previous
fiscal quarter, plus 0.25, with equal step down as per the
above grid to apply to the following quarters,
83
provided that such revised ratio shall not be less than
3.25:1. For example, if the applicable ratio in respect of
the period ending March 31, 2002 was 4.25:1, the applicable
ratio in respect of the period ending June 30, 2002 would be
4.50:1 rather than 5.50:1; and
13.11.5 at the end of each fiscal quarter of IPG during the Term
until such time as Facility B is fully repaid and cancelled, a
Consolidated ratio of (i) EBITDA less capital expenditures paid
in cash, to (ii) the sum total of Fixed Charges on all
Indebtedness and all scheduled repayments of Debt, excluding
Mandatory Repayments under Section 9.2, for the immediately
preceding period of two consecutive fiscal quarters including the
fiscal quarter ending on the calculation date (taken as a single
accounting period), of not less than 1.20:1. For the avoidance of
doubt, scheduled repayments of Debt for the fiscal quarter ending
September 30, 2001 shall not include the US$8,000,000 repayment
made in the second quarter of fiscal year 2001 in respect of an
agreement entered into by IPG dated as of January 1, 1996 with
respect to the issuance and sale of three series of senior notes
in an aggregate amount of US$33,000,000.
In calculating EBITDA for the purposes of this Section 13.11 or any
other provision of this Agreement, (1) the Consolidated non-recurring
expenses incurred by IPG and its Restricted Subsidiaries during the
last quarter of fiscal year 2000, (2) the Consolidated severance
expenses and other unusual non-recurring expenses accrued or otherwise
incurred by IPG and its Restricted Subsidiaries during the fiscal year
2001 prior to October 1, 2001, and (3) any charge to earnings resulting
from the re-pricing of stock options as may be applicable under GAAP,
shall all be added to the EBITDA for the relevant period (including on
a trailing 4 quarter basis or trailing 2 quarter basis as required).
For greater certainty and without limiting any provision of this
Agreement, each of the Borrowers, LLC and IPG acknowledge that the
failure to respect any of the foregoing financial ratios at any time
during the Term constitutes a material breach of this Agreement.
13.12 MANDATORY REPAYMENTS
It shall pay to the Agent when due any amounts required to be paid by
it in accordance with Section 9.2 or the Inter-Creditor Agreement.
13.13 MAINTENANCE OF SECURITY
It shall take all necessary steps to preserve and maintain in effect
the rights of the Agent and the Lenders pursuant to the Security
Documents, together with any renewals thereof or additional documents
creating Charges which may be required from time to time hereunder or
under the Security Documents, including those to be executed by any new
Restricted Subsidiary designated by IPG pursuant to the provisions of
Section 13.20, which shall be substantially in the form of the Security
Documents in effect at the time of such execution (except as otherwise
approved by the Lenders).
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13.14 PRIORITY OF DEBT
It shall ensure that the representations and warranties stipulated in
Section 12.16 are true and correct at all times. It shall also ensure
that all Debt owing by members of the Restricted Group to other members
of the Restricted Group and all Charges in relation thereto are
subordinated to the Loan and the Security, in form and in substance
satisfactory to the Lenders. Notwithstanding the foregoing, the members
of the Restricted Group may pay such Debt to the extent required in
order for all scheduled repayments and Mandatory Repayments hereunder
to be paid when due, and otherwise in the ordinary course provided that
no Default shall have occurred and be continuing and no Event of
Default shall have occurred and not been waived. The Lenders hereby
acknowledge that the manner in which such Debt has been subordinated in
the notes subject to the pledge agreements dated as of the Closing Date
is satisfactory to them.
13.15 PAYMENT OF LEGAL FEES AND OTHER EXPENSES
Whether the transactions contemplated by this Agreement are concluded
or not and whether or not any part of the Credit is actually advanced,
in whole or in part, the Borrowers shall pay all reasonable costs
relating to the Credit, including in particular:
13.15.1 the reasonable legal fees and costs incurred by the Agent
and the Lenders for the negotiation, drafting, signing,
registration, publication and/or service of this Agreement and
the Security Documents as well as any amendments, waivers,
consents or examinations pertaining to this Agreement and the
Security Documents; and
13.15.2 all reasonable fees, including reasonable legal fees and
costs, incurred by the Agent and the Lenders to preserve, enforce
or exercise its or their rights hereunder or under the Security
Documents.
All amounts due to the Agent and the Lenders pursuant hereto shall bear
interest on the US Prime Rate Basis from the date of their disbursement
by the Lenders or from the date of their undertaking until the
Borrowers have repaid same in full, with interest on unpaid interest,
as in the case of the US Prime Rate Advances. The obligations of the
Borrowers under this Section 13.15 shall subsist notwithstanding the
full repayment of the Loan under the provisions hereof.
13.16 FINANCIAL REPORTING
For so long as the Loan or any other amounts payable to the Lenders
hereunder remain outstanding and unpaid, or any Borrower is entitled to
borrow hereunder (whether or not the conditions precedent to such
borrowing have or may be satisfied), and unless the Lenders shall
otherwise agree in writing, each of IPG, LLC and the Borrowers agrees
to provide or cause to be provided to the Agent, with sufficient copies
for the Agent and each Lender, and all in form and in scope reasonably
acceptable to the Lenders:
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13.16.1 QUARTERLY STATEMENTS
Within 60 days after the end of each fiscal quarter of each
fiscal year of IPG (other than the last quarter of such fiscal
year), the unaudited Consolidated and, in the event that the
total EBITDA of the Unrestricted Subsidiaries is in the aggregate
greater than 5% of EBITDA for the period of four consecutive
fiscal quarters ending on the last day of such quarter (taken as
a single accounting period), Adjusted Consolidated balance sheets
of IPG and each other member of the Restricted Group, as at the
end of such quarter and the related Consolidated and, if
applicable, Adjusted Consolidated, statements of earnings and
changes in financial position, prepared in accordance with GAAP,
for the period then ended, along with IPG's calculation of Excess
Cash Flow (if required by Section 9.2 for any period ending on
the last day of such quarter), in each case with comparative
figures for the same period for the immediately preceding fiscal
year, accompanied by a certificate of the Senior Financial
Officer of IPG and setting forth the information necessary to
determine whether IPG has complied with the covenants contained
in Section 13.11 and setting forth the ratio of Total Debt to
EBITDA for all purposes required hereunder, certifying that each
of IPG, LLC and the Borrowers is in compliance with all of its
covenants hereunder and that no Default or Event of Default has
come to the attention of such Senior Financial Officer of IPG
signing the certificate, after due inquiry, or if a Default or
Event of Default has occurred or is continuing, setting out the
relevant particulars thereof, the period of existence thereof and
what action IPG has taken or proposes to take with respect
thereto, and as to certain other matters set forth in Schedule
"Q" hereto, the whole substantially in the form set out in
Schedule "Q" hereto.
13.16.2 ANNUAL STATEMENTS
Within 120 days following the end of each fiscal year of IPG:
(a) the audited Consolidated and, in the event that the
total EBITDA of the Unrestricted Subsidiaries is in the
aggregate greater than 5% of the EBITDA for such fiscal
year, Adjusted Consolidated balance sheets of IPG and
each other member of the Restricted Group, as at the
end of such year and the related Consolidated and, if
applicable, Adjusted Consolidated, statements of
earnings and changes in financial position for such
fiscal year, along with IPG's calculation of Excess
Cash Flow (if required by Section 9.2 for such fiscal
year), together with comparative figures for the
immediately preceding year, the whole as certified
without qualification by a reputable firm of
independent chartered accountants acceptable to the
Agent, together with comparative figures for the
immediately preceding year, and any audited statements
of any Restricted Subsidiary which may be prepared; and
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(b) a certificate of a Senior Financial Officer setting
forth the information necessary to determine whether
IPG has complied with the covenants contained in
Section 13.11, and certifying, among other matters set
forth in Schedule "Q" hereto, that each of IPG, LLC and
the Borrowers is in compliance with all of its
covenants hereunder and that no Default or Event of
Default has come to the attention of the Senior
Financial Officer of IPG signing the certificate, after
due inquiry, or if a Default has occurred and is
continuing, or if an Event of Default has occurred,
setting out the relevant particulars thereof, the
period of existence thereof and what action IPG has
taken or proposes to take with respect thereto, and as
to certain other matters set forth in Schedule "Q"
hereto, the whole substantially in the form set out in
Schedule "Q" hereto.
13.16.3 OTHER INFORMATION
(a) Financial Forecast: Within 60 days following the end of
each fiscal year of IPG, the annual Consolidated
pre-tax operating forecast of IPG, including balance
sheet and statements of income, retained earnings and
cash flow, and the Consolidated capital expenditures
budget of IPG;
(b) Audit Reports: Promptly upon receipt thereof, one copy
of each interim or special audit made by independent
accountants of the books of IPG or any other member of
the Restricted Group and any management letter received
from such accountants;
(c) Governmental and Other Reports: Promptly upon their
becoming available, one copy of each financial
statement, report, notice or proxy statement sent by
IPG to stockholders generally and of each regular or
periodic report, registration statement or prospectus
filed by IPG or any Subsidiary with any securities
exchange or any governmental regulatory body including
IPG's Form 20F, 10Q and 10K and unaudited quarterly
reports, and copies of any orders in any proceedings to
which IPG or any of its Subsidiaries is a party, issued
by any governmental agency having jurisdiction over IPG
or any of its Subsidiaries;
(d) Borrowing Base Information: Within 10 days following
the end of each month or at any other time upon request
by and reasonable notice from the Agent, a monthly
summary listing of aged accounts receivable in respect
of the previous month
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or in respect of such other period as may be requested
by the Agent, acting reasonably, including a breakdown
showing Eligible Trade Receivables and inventory
divided into raw materials, work in process and
finished products, including a breakdown showing
Eligible Inventory and Eligible Raw Materials, the
whole in the form set forth in Schedule "O";
(e) Acquisitions: The Borrowers shall advise the Agent
forthwith of, and in any event not less than 15
Business Days prior to, the consummation of any
proposed Acquisition as to which the purchase price is
(in cash, assumed Debt or otherwise) $2,500,000 or
more, and shall provide to the Agent in sufficient
quantities for the Lenders:
(i) notice of the Acquisition, and material
information with respect to the nature thereof and
the proposed purchase price;
(ii) such historical audited and unaudited financial
statements of the target of the Acquisition (the
"TARGET") as the Target has made available to the
Restricted Group and any other financial
statements contained in any information that has
been reviewed and confirmed by a nationally
recognized accounting firm or that has been
submitted to and approved by IPG's board of
directors;
(iii) a pro forma balance sheet and income statement of
the Target and the Restricted Group on a
consolidated basis following the Acquisition,
showing the projected impact of the Acquisition
both for the current fiscal year and the
immediately succeeding fiscal year;
(iv) a written confirmation of a Senior Financial
Officer that IPG is satisfied, based on its due
diligence, that the Acquisition of the Target will
not result in the assumption by any member of the
Restricted Group of material liabilities which
have not been fully disclosed to the Agent in the
materials provided in connection with the
Acquisition or otherwise in writing;
(v) a certificate of a Senior Financial Officer that,
on a Consolidated basis following the Acquisition,
as of the date of the Acquisition after giving
effect thereto, no Default shall have occurred and
be continuing and no
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Event of Default shall have occurred which has not
been waived;
(f) Environmental Reports:
(i) Within 10 days following the end of each fiscal
quarter of each fiscal year of IPG, one copy of
each environmental report submitted to the board
of directors of IPG during such fiscal quarter;
(ii) to the Collateral Trustees (as defined in the
Inter-Creditor Agreement), promptly after
obtaining knowledge thereof, written notice of (A)
any material governmental or regulatory actions
instituted or threatened in writing under any
Environmental Law affecting any of the real
property subject to Charges or the matters
indemnified under the U.S. Environmental
Indemnification Agreement or the Canadian
Environmental Indemnification Agreement,
including, without limitation, any material notice
of inspection, abatement or noncompliance; (B) all
claims made, or material claims threatened in
writing, by any third party against any member of
the Restricted Group or any of the real property
subject to Charges relating to damage,
contribution, cost recovery, compensation, loss or
injury resulting from the presence, release or
discharge on or from any of the properties owned
by any member of the Restricted Group of any
Hazardous Substances; and (C) any member of the
Restricted Group's discovery of any occurrence or
condition on any of the real property subject to
Charges or any real property adjoining or in the
vicinity of any real property subject to Charges
which is reasonably likely to subject any member
of the Restricted Group to a material claim under
any Environmental Law or to any restrictions on
the ownership, occupancy, transferability or use
of said property under any Environmental Law; and
(iii) to the U.S. Collateral Trustee or the Canadian
Collateral Trustee, any non-privileged
documentation or records that such Collateral
Trustee may request at the direction of the
Majority Lenders, acting reasonably, with respect
to any of the matters described in clause (ii) of
this subsection 13.16.3(f);
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(g) Other Information: From time to time and upon demand by
and reasonable notice from the Agent, the data,
reports, statements, documents or other additional
information pertaining to the business, assets,
liabilities, financial position, operating results or
business prospects of IPG or any other member of the
Restricted Group, as well as any documents, writings or
books of account in connection therewith, as the Agent
may request, acting reasonably.
13.17 NOTICE OF CERTAIN EVENTS
The Borrowers, LLC or IPG shall advise the Agent forthwith upon the
occurrence of any of the following events:
13.17.1 The commencement of any proceeding or investigation by or
before any governmental body and any action or proceeding before
any court or arbitrator against any member of the Restricted
Group, or any of its property, assets or activities which, in the
event that a decision is rendered which is adverse to it, could
constitute a Material Adverse Change;
13.17.2 Promptly upon the occurrence thereof, written notice of
(a) a Reportable Event with respect to any Plan (other than a
Multiemployer Plan); (b) the institution of any steps by IPG, the
Borrowers, any ERISA Affiliate, the PBGC or any other Person to
terminate any Plan; (c) the institution of any steps by IPG or
any ERISA Affiliate to withdraw from any Multimemployer Plan; (d)
a non-exempt "prohibited transaction" within the meaning of
Section 406 of the ERISA in connection with any Plan which could,
either individually or in the aggregate with any other prohibited
transaction(s), reasonably be expected to result in any liability
to the Restricted Group in excess of $3,000,000 (subject to the
decrease provided for in subsection 12.15.6); (e) any material
increase in the contingent liability of IPG or any Subsidiary
with respect to any post-retirement welfare liability; or (f) the
taking of any action by, or the threatening of the taking of any
action by, the Internal Revenue Service, the Department of Labour
or the PBGC with respect to any of the foregoing;
13.17.3 The occurrence of any Material Adverse Change (considered
on a Consolidated basis) which is known to the Borrowers, LLC or
IPG, acting reasonably;
13.17.4 Any Default or Event of Default, specifying in each case
the relevant details and the action contemplated in this respect.
13.18 ACCURACY OF REPORTS
All information, reports, statements and other documents and data
provided to the Agent or the Lenders, whether pursuant to this
Article or any other provisions of this Agreement
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shall, at the time same shall be provided, be true, complete and
accurate in all material respects to the extent necessary to provide
the Lenders with a true and accurate understanding of their effect.
13.19 LENDERS' OPTION TO OBTAIN IMPROVED TERMS AND CONDITIONS
The Agent shall immediately be notified of the terms and conditions of
any Debt of the nature described in the first paragraph of the
definition of "Debt" (other than Priority Debt) to be created by any
member of the Restricted Group. The Lenders shall have the option to
require the Borrowers and the Guarantors to amend this Agreement to
incorporate the provisions of any agreement relating to such Debt if
the Lenders so wish, it being understood that the provisions which may
be so incorporated shall not extend to pricing or Margins or, in the
case of an operating credit which replaces Facility A after it has been
repaid at the expiry of its Term, the security provided therefor.
13.20 DESIGNATION OF RESTRICTED SUBSIDIARIES
IPG may designate any Subsidiary a Restricted Subsidiary by giving
written notice to the Agent that the Board of Directors of IPG has made
such designation, provided that (i) no Subsidiary may be designated a
Restricted Subsidiary unless, at the time of such designation and after
giving effect thereto, no Default shall have occurred and be
continuing, and no Event of Default shall have occurred which has not
been waived, and (ii) such Subsidiary is also being designated as a
"Restricted Subsidiary" under the Note Agreements. Any such designation
shall be irrevocable. No Unrestricted Subsidiary may own any shares of
a Restricted Subsidiary.
13.21 UNDERTAKING WITH REGARD TO OPERATING ASSETS
It shall ensure that:
13.21.1 all manufacturing operations of the Restricted Group are
conducted by the companies listed in Section 12.22; all U.S.-based
finished goods inventory shall be shipped, delivered and
maintained by IPC at all times; all Canadian-based finished goods
inventory shall be shipped, delivered and maintained by IPI at all
times;
13.21.2 all U.S.-based accounts receivable, other than those
arising between members of the Restricted Group, shall be
generated from, maintained in and collected by IPC; all
Canadian-based accounts receivable, other than those arising
between members of the Restricted Group, shall be generated from,
maintained in and collected by IPI; and
13.21.3 each U.S.-based Restricted Subsidiary shall in no
circumstance, including in connection with a default or an event
of default under any agreement, (i) discontinue the shipment and
delivery of all finished goods inventory to IPC, or (ii) generate
any accounts receivable of its own; each Canadian-based Restricted
Subsidiary shall in no circumstance, including in connection with
a default or an
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event of default under any agreement, (i) discontinue the shipment
and delivery of all finished goods inventory to IPI, or (ii)
generate any accounts receivable of its own,
save and except that IPG shall only ensure that subsections
13.21.2 and 13.21.3 apply to Central Products Company's United
Tape division starting March 31, 2002.
13.22 ADDITIONAL UNDERTAKINGS
IPG shall:
13.22.1 provide, at its expense and prior to June 30, 2002, an
accounts receivable and inventory audit of its Restricted
Subsidiaries, which audit shall have been performed by an
independent third party acceptable to the Lenders; and
13.22.2 in the event the ratio of Total Debt to EBITDA (for the
period of four consecutive fiscal quarters including the fiscal
quarter ending on the calculation date, taken as a single
accounting period) is not less than or equal to 5.0:1 as of June
30, 2002, provide an appraisal of the Restricted Subsidiaries'
equipment and inventory, such appraisal to be performed by an
independent third party acceptable to the Lenders.
13.23 INTELLECTUAL PROPERTY
Subject to Section 14.12, it shall ensure that all intellectual
property (as described in the Security Documents) shall continue to be
owned by the Person identified as the owner thereof in the Security
Documents at all times during the Term; provided that, on 20 days prior
notice to the Agent, the US Collateral Trustee and the Canadian
Collateral Trustee, any member of the Restricted Group may sell or
otherwise transfer any interest that it has in such intellectual
property to IPG Technologies Inc. at any time.
14 NEGATIVE COVENANTS
For so long as the Loan or any other amounts payable hereunder to the
Agent or the Lenders remain outstanding and unpaid, or any of the
Borrowers is entitled to borrow hereunder (whether or not the
conditions precedent to such borrowing have or may be satisfied), each
of the Borrowers, LLC and IPG, for itself and each member of the
Restricted Group and with respect to itself and each member of the
Restricted Group, agrees that it shall not do any of the following:
14.1 LIQUIDATION, AMALGAMATION, MERGER, CONSOLIDATION AND SALE OF
ASSETS
14.1.1 Consolidate or amalgamate with or be a party to a merger
with any other corporation, or sell, lease or otherwise dispose of
all or any substantial part (as defined in subsection 14.1.4) of
Consolidated Assets; notwithstanding the foregoing:
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(a) any Restricted Subsidiary may merge or amalgamate or
consolidate with or into IPG or any Wholly-owned
Restricted Subsidiary so long as in any merger or
consolidation involving IPG, IPG shall be the surviving
or continuing corporation;
(b) IPG may consolidate or amalgamate or merge with any
other corporation if (i) in the case of any
consolidation or merger, the purchasing, surviving or
continuing corporation shall be IPG, or in the case of
any amalgamation, IPG's existence shall continue with
the amalgamation and all of IPG's obligations hereunder
and under the Security Documents shall constitute
obligations of the amalgamated entity and (ii) at the
time of such amalgamation, consolidation or merger after
giving effect thereto, no Default or Event of Default
shall have occurred and be continuing and (iii) the
Majority Lenders agree to such merger, consolidation or
amalgamation, acting reasonably;
(c) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or any substantial part of its assets to
IPG or any Wholly-owned Restricted Subsidiary;
the whole provided that as a result of same, the Security is not
adversely affected (or, if it is, the required Mandatory Repayment
has been made) and none of the Persons granting such Security
changes its name without prior notice of at least 20 Business Days
to the Agent. Notwithstanding the foregoing, no member of the
Restricted Group shall become party to any receivables
securitization program.
14.1.2 Permit any Restricted Subsidiary to issue or sell any
shares of stock of any class of such Restricted Subsidiary
(including as "stock" for the purposes of this Section 14.1, any
warrants, rights or options to purchase or otherwise acquire stock
or other Securities exchangeable for or convertible into stock,
any membership interests of any limited liability company and any
similar equity interest) to any Person other than IPG or a
Wholly-owned Restricted Subsidiary, except for the purpose of
qualifying directors, or except in satisfaction of the validly
pre-existing preemptive rights of minority shareholders in
connection with the simultaneous issuance of stock to IPG and/or a
Restricted Subsidiary whereby IPG and/or such Restricted
Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
14.1.3 Sell, transfer or otherwise dispose of any shares of stock
of any class of any Restricted Subsidiary (except to IPG or a
Wholly-owned Restricted Subsidiary provided that the Security is
not adversely affected or for the purpose of qualifying
directors), unless:
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(a) simultaneously with such sale, transfer, or disposition,
all shares of stock of such Restricted Subsidiary at the
time owned by IPG and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as
an entirety; and
(b) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets
of the Restricted Group;
provided, however, that nothing in subsections 14.1.3 and 14.1.4
shall permit any disposition by IPG of any of the shares, limited
partnership units or other equity interests in any of the
Borrowers, the disposition by the Facility B/C Borrower of the
shares of Canco, any disposition of the equity interests in LLC by
Canco, or any disposition of the shares of IPG (US) Holdings Inc.
or IPG (US) Inc.
14.1.4 As used in this Section 14.1, a sale, lease or other
disposition of assets (including Securities) shall (unless
consisting of sales of inventory made in the ordinary course of
business) be deemed to be a "substantial part" of Consolidated
Assets if the book value of such assets, when added to the book
value of all other assets sold, leased or otherwise disposed of by
the Restricted Group (other than in the ordinary course of
business) during the 12-month period ending with the date of such
sale, lease or other disposition, exceeds, in the aggregate, 10%
of Consolidated Assets, determined as of the end of the
immediately preceding fiscal quarter.
For the purpose of making any determination of "substantial part",
any sale, lease or other dispositions of assets of the Restricted
Group shall not be included if and to the extent the net proceeds
are segregated from the general accounts of the Restricted Group,
invested in Available Cash until applied in accordance with
clauses (1) or (2) below, and either (1) within 6 months after
such sale, lease or other disposition, are used to acquire Like
Assets, or (2) within 6 months after such sale, lease or
disposition, are applied to the prepayment of the Loan in
accordance with the provisions of Section 8.2 of the
Inter-Creditor Agreement. Any such prepayment shall be applied
first to repay the Loan and the Notes, and the Credit under
Facility B will be reduced by an amount equal to the amount of
such repayment of the Loan and then, once Facility B has been
repaid in full and the Credit the Credit under Facility C shall be
reduced by an amount equal to the remainder of such repayment, in
inverse order of the scheduled reductions under Section 9.1.
14.2 LIMITATIONS ON DEBT
14.2.1 Create, assume or incur or in any manner become liable in
respect of any Debt, except:
(a) Debt of the Restricted Group permitted by subsection
13.11.1 and 13.11.4;
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(b) Debt of IPG or a Restricted Subsidiary owed to IPG or to
a Wholly-owned Restricted Subsidiary; and
(c) unsecured Debt of any Restricted Subsidiary ("SUBSIDIARY
PRIORITY DEBT") and Debt of the Restricted Group secured
by Permitted Charges ("SECURED PRIORITY DEBT", and,
collectively with the Subsidiary Priority Debt being
herein called "PRIORITY DEBT"), provided that, at the
time of issuance of any such Priority Debt and after
giving effect thereto and to the application of the
proceeds thereof, (x) the aggregate principal amount of
Priority Debt (including Facility A) shall not exceed
20%, or 12.5% during any Release Period under the first
paragraph of Section 10.3, of Consolidated Net Worth and
(y) all such Priority Debt shall have been incurred
within the other applicable limitations of this Section
14.2, and provided further that, for the purposes of
this Agreement and the Security Documents, Debt under or
in respect of Facility B, Facility C and the Notes, and
Debt permitted by clause (b) above, shall not constitute
Priority Debt. For the purposes of this clause (c),
Facility A shall be deemed to be fully utilized at all
times until it is repaid and cancelled.
14.2.2 Any Person which becomes a Restricted Subsidiary after the
date hereof shall, for all purposes of this Section 14.2, be
deemed to have created, assumed or incurred at the time it becomes
a Restricted Subsidiary all Debt of such Person existing
immediately after it becomes a Restricted Subsidiary.
14.2.3 If any member of the Restricted Group incurs additional
Debt, other than Debt secured by Charges described in subsection 7
of the definition of "Permitted Charges", such Debt shall be
subject to terms and conditions no more restrictive than those
contained herein and in the Note Agreements, excluding terms and
conditions relating to pricing, collateral (in the case of
Priority Debt alone) and Margins.
14.2.4 Neither LLC nor Canco shall incur or have at any time any
Indebtedness in excess of an aggregate amount of US $100,000, save
as provided in the undertakings contemplated in subsection
11.1.13(b).
14.3 FACILITY B/C BORROWER BUSINESS
Permit any of the Facility B/C Borrower or any of its Subsidiaries,
including Canco and LLC, to carry on any business, other than (i)
taking such steps as may be necessary to maintain its existence or to
hold Securities of Restricted Subsidiaries, (ii) provided no Default
shall have occurred and be continuing and that no Event of Default
shall have occurred which has not been waived, LLC may lend money to
IPG (US) Inc., (iii) performing any action required hereunder or in
respect hereof or under or in respect of any
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of the Security Documents, the Note Agreements or the Notes; and (iv)
the incurrence of any Indebtedness permitted by subsection 14.2.4, and,
with respect to the Facility B/C Borrower, Indebtedness permitted
hereunder.
14.4 CHARGES
Create, incur, assume, enter into or permit to subsist, directly or
indirectly, any Charge on its or their property or assets, whether now
owned or hereafter acquired, or upon any income or profits therefrom,
except Permitted Charges, and only to the extent that (a) no Material
Adverse Change occurs as a result and (b) the aggregate amount of
Priority Debt (as defined in subsection 14.2.1 (c)) does not exceed 20%
of Consolidated Net Worth, or, during any Release Period referred to in
the first paragraph of Section 10.3, 12.5% of Consolidated Net Worth.
14.5 INVESTMENTS AND RESTRICTED PAYMENTS
14.5.1 Until such time as Facility B is fully repaid and
cancelled, make any Restricted Payment. Until such time as
Facility B is fully repaid and cancelled, make any Investment
(other than a Permitted Investment), unless after giving effect to
such Investment, (i) the ratio of Total Debt to EBITDA calculated
on a quarterly basis as set out in subsection 13.11.4 is less than
or equal to 3.25:1 for the two previous fiscal quarters and the
two subsequent fiscal quarters on a pro forma basis, and (ii) the
aggregate amount of all Investments (other than Permitted
Investments) made by the Restricted Group up to such date would
not exceed 10% of Consolidated Net Worth as of the end of the most
recently ended fiscal quarter. The amount of Investments (other
than Permitted Investments) as of the Closing Date is deemed to be
US$11,176,870, comprised of the Investments described in Schedule
"R" hereto.
Once Facility B is fully repaid and cancelled, the Restricted Group
shall not make:
(a) any Investment (other than Permitted Investments), if,
after giving effect thereto, the aggregate amount of all
such Investments made by the Restricted Group up to such
date would exceed 10% of Consolidated Net Worth as of
the end of the most recently ended fiscal quarter; or
(b) any Restricted Payments in excess of US$5,000,000 per
fiscal year of IPG.
14.5.2 In addition to and not in limitation of the foregoing
restrictions, IPG will not, and will not permit any Restricted
Subsidiary to, make any Investment in any Unrestricted Subsidiary
not engaged in a business substantially related to the business of
the Restricted Group.
14.5.3 Furthermore, LLC shall not make any Investment other than
Permitted Investments described in the second, third and fourth
paragraphs of the definition
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thereof and Permitted Investments in IPG (US) Inc. The latter
shall not make any Investment other than Permitted Investments
described in such paragraphs and Permitted Investments in any
Restricted Subsidiary that has executed the required Security
Documents.
14.5.4 The following restrictions shall apply in connection with
any and all payments to Drumheath by any member of the Restricted
Group:
(a) until such time as Facility B has been repaid in full
and the Credit thereunder cancelled, all payments to
Drumheath must be on account of premiums payable for the
insurance policies issued by Drumheath. After Facility B
has been repaid and the Credit thereunder cancelled,
such payments may be paid partly as premiums and partly
on account of Investments, as determined by the
Restricted Group. Notwithstanding the foregoing, the sum
total of payments to Drumheath may not exceed
US$3,000,000 in any fiscal year of IPG;
(b) no Investments in or payments or Restricted Payments to
Drumheath may be made while a Default has occurred or is
continuing or following the occurrence of an Event of
Default which has not been waived;
(c) until Facility B has been repaid in full and the Credit
thereunder cancelled, Drumheath may not enter into any
insurance contracts in respect of any other kinds of
insurance other than the types of insurance it is
currently underwriting, consisting of workers'
compensation;
(d) all of Drumheath's liability in connection with workers'
compensation policies shall be reinsured by reputable
reinsurance companies, which reinsurance policies shall
remain in effect at all times;
(e) Drumheath may not carry on any new line of business, not
currently conducted by Drumheath as of the Closing Date,
during the Term other than, subject to subsection
14.5.4(c), an insurance business, as defined under
applicable Law;
(f) prior to the occurrence of any Event of Default which
has not been waived, any monies coming from Drumheath
including dividends, distributions and related proceeds
(other than payment of claims under valid policies of
insurance and other expenses to be paid in the ordinary
course of business) must be paid directly to a member of
the Restricted Group. Following the occurrence of an
Event of Default which has
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not been waived, at the request of the Agent on behalf
of the Lenders, the Borrowers and the Guarantors shall
cancel all insurance policies contracted with Drumheath
in accordance with the terms of any such policy, other
than those in respect of workers' compensation, cause
Drumheath to cease carrying on business, and shall cause
the net amount of all sums left in Drumheath (following
the payment by Drumheath of, or reservation for, all
claims (including those incurred but not reported) in
respect of policies outstanding, in accordance with
applicable Law) to be paid to a member of the Restricted
Group to be paid to the Agent for the Lenders to reduce
the Credit under Facilities B and C, in that order,
subject to Pro Rata Sharing; and
(g) each of the Borrowers and the Guarantors confirms that
it has not guaranteed any of the liabilities of
Drumheath under any of its insurance policies, nor has
any of them provided any other guarantee of any
liability of Drumheath of any nature whatsoever.
Notwithstanding the provisions of subsection 14.5.1, the
US$3,000,000 annual Restricted Payments to and/or Investments in
Drumheath may be made even where the restrictions set out in
clause (i) of subsection 14.5.1 have not been met.
All payments to Drumheath shall be deemed "Investments" for the
purposes of subsection 14.5.1.
14.5.5 In addition to the foregoing restrictions, IPG will not
make any Restricted Payments or any Investment if, at the time
thereof or after giving effect thereto, any Default shall have
occurred and be continuing or Event of Default shall have occurred
which has not been waived.
14.5.6 IPG will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after the date of
declaration thereof.
14.5.7 For the purposes of this Section 14.5, the amount of any
Restricted Payment declared, paid or distributed in property shall
be deemed to be the greater of the book value or fair market value
(as determined in good faith by the Board of Directors of IPG) of
such property at the time of the making of the Restricted Payment
in question.
14.5.8 In valuing any Investments for the purpose of applying the
limitations set forth in this Section 14.5, such Investments shall
be taken at the original cost thereof, without allowance for any
subsequent write-offs or appreciation or depreciation therein, but
less any amount repaid or recovered on account of capital or
principal.
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14.5.9 For the purposes of this Section 14.5, at any time when a
Person becomes a Restricted Subsidiary, all Investments of such
Person at such time shall be deemed to have been made by such
Person, as a Restricted Subsidiary, at such time.
14.6 RESTRICTIONS ON CAPITAL EXPENDITURES
Until such time as Facility B is fully repaid and cancelled, make any
capital expenditures exceeding US$20,000,000 in any fiscal year of IPG
unless the ratio of Total Debt to EBITDA set forth in subsection
13.11.4 has been less than or equal to 3.25:1 for a period of four
consecutive quarters. The foregoing restriction shall apply again if,
at the end of any fiscal quarter, such ratio exceeds 3.25:1, unless
Facility B has theretofore been fully repaid and cancelled.
Once Facility B is fully repaid and cancelled or the ratio of Total
Debt to EBITDA referred to in the preceding paragraph is met (for the
purposes of this paragraph, the "CONDITIONS"), the Restricted Group
shall not make capital expenditures exceeding an amount equal to 10% of
Consolidated Net Worth in any fiscal year of IPG without the consent of
the Lenders, acting reasonably. If either of the Conditions occurs on a
date other than the last day of a fiscal year of IPG, the Restricted
Group shall be permitted in such fiscal year to make the capital
expenditures allowed in this paragraph rather than those permitted by
the previous paragraph. Such amount shall be increased to 20% for any
fiscal year in which the ratio of Total Debt to EBITDA set forth in
subsection 13.11.4 has not exceeded 3.0:1 for a period of four
consecutive quarters and IPG has maintained a credit rating for each of
its two previous fiscal quarters with respect to its long-term, senior
unsecured Debt of "BBB" or better by Standard & Poor's (or an
equivalent credit rating by Xxxxx'x or an equivalent agency acceptable
to the Lenders); provided that if at any time thereafter, the aforesaid
(a) ratio in respect of the immediately preceding four quarters, or (b)
Debt rating, no longer meets the applicable tests described above, the
applicable percentage shall once again be 10% for the fiscal year in
which such condition is no longer met.
14.7 TRANSACTIONS WITH AFFILIATES
Enter into or be a party to any transaction or arrangement with any
Affiliate (including, without limitation, the purchase from, sale to or
exchange of property with, or the rendering of any service by or for,
any Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of any member of the Restricted Group's
business and upon fair and reasonable terms no less favourable to such
member of the Restricted Group than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
14.8 TERMINATION OF PENSION PLANS
Withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan or permit any Plan (other than a Multiemployer Plan)
to be terminated if such withdrawal or termination could result in
withdrawal liability (as described in Part 1 of Subtitle B of Title IV
of ERISA) of the Restricted Group or the imposition of a Charge on any
property of IPG
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or any Subsidiary pursuant to Section 4068 of ERISA in excess of
$3,000,000 (subject to reduction in accordance with the provisions of
subsection 12.15.6).
14.9 OWNERSHIP OF SUBSIDIARIES
Permit each of LP, LLC, Canco, IPI, IPC and all Operating Restricted
Subsidiaries to be other than Wholly-owned Subsidiaries, or at any time
own (either directly or through the Restricted Subsidiaries) less than
80% of the Voting Stock of its other Restricted Subsidiaries, together
with such securities of such other Restricted Subsidiaries as are
necessary to provide IPG with a direct or indirect economic interest of
not less than 80% of each such other Restricted Subsidiary.
14.10 NO RESTRICTIONS ON DISTRIBUTIONS
Restrict in any way the ability of the Restricted Subsidiaries to
declare or make any payment contemplated in the first, second and third
subsections of the definition of the term "Restricted Payments" to its
shareholder(s) or other equity owners, except for such restrictions
arising under applicable law in relation to the solvency of the
Restricted Subsidiaries.
14.11 NO AMENDMENTS TO NOTE AGREEMENTS
Allow any provision of the Note Agreements in relation to repayments,
prepayments, pricing or financial covenants to be amended, replaced or
deleted in any manner that would be adverse to the Lenders without the
prior written consent of the Agent. This negative covenant is
supplemental to the covenant set forth in Section 10.5 of the
Inter-Creditor Agreement.
14.12 INTELLECTUAL PROPERTY
Except as permitted by Section 14.1, IPG shall not, and shall not
permit any member of the Restricted Group to, sell or transfer any
portion of such Person's ownership interest in any intellectual
property (as described in the Security Documents); provided, that any
member of the Restricted Group may sell or transfer any such
intellectual property to IPG Technologies Inc. at any time, subject to
any notice requirements set forth in Section 13.23.
15 EVENTS OF DEFAULT AND REALIZATION
15.1 EVENT OF DEFAULT
The occurrence of any of the following events during the Term shall
constitute an Event of Default unless remedied within the prescribed
delays or renounced to in writing:
15.1.1 If any of the Borrowers fails to make any payment of
interest or principal with respect to the Loan when due, or fails
to pay any other amount due to the Agent or the Lenders within two
(2) Business Days after notice thereof; or
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15.1.2 If any member of the Restricted Group fails to respect any
of its other obligations and undertakings hereunder or under the
Security Documents (including during any Release Period) or
another undertaking of such member of the Restricted Group with
respect to the Loan (including the undertakings described in
Section 11.1) not otherwise contemplated by this Section 15.1 and
has not remedied the Default within ten (10) days following the
date on which the Agent has given written notice to the relevant
Borrower(s); or
15.1.3 If (a) a court having jurisdiction shall enter a decree or
order for relief in respect of any member of the Restricted Group
in an involuntary case under the United States Bankruptcy Code of
1978 (11 U.S.C. et. seq.) (the "BANKRUPTCY CODE"), or under any
other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal
or state law; or (b) an involuntary case shall be commenced
against any member of the Restricted Group under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over any member of the Restricted
Group, or over all or a substantial part of its property, shall
have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of
any member of the Restricted Group for all or a substantial part
of its property; or (c) any member of the Restricted Group shall
have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law nor or hereafter
in effect, or shall consent to the entry of an order for relief in
an involuntary case, or to the conversion of an involuntary case
to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or
any member of the Restricted Group shall make any assignment for
the benefit of creditors; or (d) any member of the Restricted
Group shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due;
or the board of directors (or similar governing body) of any
member of the Restricted Group (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in clause (c) above or this clause
(d) (each of the events described in clauses (a) and (b) above are
hereinafter in this subsection 15.1.3 called a "PROCEEDING");
provided that, if a Proceeding is commenced against any member of
the Restricted Group, the Restricted Group shall have the right to
contest the Proceeding in good faith, if the Agent is absolutely
satisfied, in its complete discretion, that the repayment of the
Loan and the ability of each of the Borrowers and IPG to service
their Debt shall not be compromised; or
15.1.4 If property of any member of the Restricted Group having a
total value of more than US $2,500,000 is the object of a seizure
or of a taking of possession or other Proceeding by a creditor,
provided that if such legal proceedings are
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commenced against any member of the Restricted Group, such member
shall have the right to contest same in good faith, if the Agent
is absolutely satisfied, in its complete discretion, that the
repayment of the Loan and the ability of each of the Borrowers and
IPG to service its Debt will not be compromised; or
15.1.5 If any statement, attestation, financial statement, report,
data, representation or warranty which was given by, for the
account of or in the name of any member of the Restricted Group to
the Agent or the Lenders, with respect to this Agreement or the
Security Documents, is revealed to be false, misleading or
incomplete in any material respect at any time, or if the auditors
certifying the financial statements in accordance with subsection
13.16.2 insert a material qualification in their opinion; or
15.1.6 If any member of the Restricted Group is in default with
respect to any Material Debt (other than amounts due to the
Lenders hereunder), if:
(a) such default was caused by the failure to make any
payment of an amount in excess of US $5,000,000 when
due, and such default is not remedied within ten (10)
days of its occurrence; or
(b) such default could permit the creditor of such Material
Debt to cause an amount in excess of US $5,000,000 to
become due and payable prior to its stated maturity or
scheduled payment date; or
15.1.7 If a judgment is rendered by a competent tribunal against
any member of the Restricted Group in an aggregate amount in
excess of US $2,500,000 (net of applicable insurance coverage
pursuant to which liability is acknowledged in writing by the
insurer to the Agent on behalf of the Lenders) and remains
undischarged for a period ending not more than five (5) Business
Days before the date on which such judgment becomes enforceable;
or
15.1.8 If LLC assigns or transfers any of its rights against any
Restricted Subsidiary with respect to amounts owed to it by such
Restricted Subsidiary, except as permitted by the provisions
hereof or of the undertaking delivered pursuant to subsection
11.1.13; or
15.1.9 If any of the Notes become payable in advance following a
Change in Control, as defined in the Note Agreements; or
15.1.10 If in the opinion of the Lenders, acting in good faith, a
Material Adverse Change has occurred since December 31, 2000,
except as set forth in Schedule "M" hereto, and the Agent has
given written notice to the Borrowers to such effect; or
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15.1.11 If PBGC has registered or recorded any Charge securing an
amount greater than $1,000,000 against the property of the
Restricted Group.
15.2 REMEDIES
If an Event of Default occurs under subsection 15.1.3, the Loans shall
immediately become due and payable, without presentation, demand,
protest or other notice of any nature, to which the Borrowers hereby
expressly renounce. If any other Event of Default occurs and is
continuing, the Agent may, at its option, and shall if required to do
so by the Lenders, declare immediately due and payable, without
presentation, demand, protest or other notice of any nature, to which
the Borrowers hereby expressly renounce, notwithstanding any provision
to the contrary effect in this Agreement or in the Security Documents:
15.2.1 the entire amount of the Loan, including the amount
corresponding to the face amount of all Letters of Credit then
outstanding and the principal amount of the BA Advances then
outstanding, in principal and interest, notwithstanding the fact
that one or more of the holders of the Bankers' Acceptances or the
Letters of Credit issued pursuant to the provisions hereof have
not demanded payment in whole or in part or have demanded only
partial payment from the Lenders. Neither IPG, LLC nor the
Borrowers shall have the right to invoke against the Lenders any
defence or right of action, indemnification or compensation of any
nature or kind whatsoever that the Borrowers may at any time have
or have had with respect to any holder of one or more of the
Letters of Credit or Bankers' Acceptances issued in accordance
with the provisions hereof. Any amounts paid to the Lenders in
respect of any outstanding Letters of Credit shall be retained by
the Lenders to be applied against such Letters of Credit when
payment thereon is requested, with any balance, after payment of
all Loans, to be returned to the relevant Borrower(s); and
15.2.2 an amount equal to the amount of losses, costs and expenses
suffered or incurred by the Lenders, in each case as and to the
extent required by Section 8.2 and Section 8.3, if applicable; and
the Credit shall cease and as and from such time shall be annulled, and
the Lenders may exercise all of their rights and recourses under the
provisions of this Agreement and the Security Documents. For greater
certainty, from and after the occurrence and during the continuance of
any Default or from and after the occurrence of an Event of Default
which has not been waived, the Lenders shall not be obliged to make any
further Advances under the Credit.
15.3 BANKRUPTCY AND INSOLVENCY
If any member of the Restricted Group files a notice of intention to
file a proposal, or files a proposal under the Bankruptcy and
Insolvency Act, or files a petition under the US Bankruptcy Code, or if
IPG or any of the Restricted Subsidiaries obtains the permission of a
Canadian court to file a Plan of Arrangement under the Companies'
Creditors Arrangements Act, and if a stay of proceedings is obtained or
ordered under the provisions of any such statute, without prejudice to
the Lenders' rights to contest such stay of proceedings, each of
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the Borrowers, LLC and IPG covenants and agrees to continue to pay
interest on all amounts due to the Lenders. In this regard, each of the
Borrowers, LLC and IPG acknowledges that permitting the Borrowers to
continue to use the proceeds of the Loan constitutes valuable
consideration provided after the filing of any such proceeding in the
same way that permitting the Borrowers to use leased premises
constitutes such valuable consideration.
15.4 APPLICATION OF PROCEEDS
Subject to the provisions of the Inter-Creditor Agreement, the Agent
may apply the proceeds of realization of the property contemplated by
the Security Documents and of any credit or compensating balance, in
reduction of the part of the Indebtedness of the Borrowers to the
Lenders (in principal, interest or accessories) which is then due and
payable hereunder. Notwithstanding the foregoing and except during any
Release Period arising under the provisions of the second paragraph of
Section 10.3 hereof, the proceeds of any such realization of the
Operating Assets received by the Agent shall be applied first to
Facility A, second to Facility B and then to Facility C.
15.5 NOTICE
Except where otherwise expressly provided herein or in any Security
Document, no notice or demand of any nature is required to be given to
the Borrowers or the Guarantors by the Agent in order to put the
Borrowers and the Guarantors in default, which shall occur by the
simple lapse of time granted to execute an obligation or by the simple
occurrence of a Default.
15.6 COSTS
If an Event of Default occurs which has not been waived, and within the
limits contemplated by Section 13.15, the Agent may impute to the
account of the Lenders and pay to other persons reasonable sums for
services rendered with respect to the realization, recovery, sale,
transfer, delivery and obtention of payment with respect to the
Security, and may deduct the amount of such costs and payments from the
proceeds which it receives therefrom. The balance of such proceeds may
be held by the Agent in the place of such Security and, when the Agent
decides it is opportune, acting reasonably, may be applied to the
account of the part of the Indebtedness of the Restricted Group to the
Lenders which the Agent deems preferable, without prejudice to the
rights of the Lenders against the Restricted Group for any loss of
profit. This Section is subject to the provisions of the Inter-Creditor
Agreement.
15.7 RELATIONS WITH THE RESTRICTED GROUP
The Agent may grant delays, take security or renounce thereto, accept
compromises, grant acquittances and releases and otherwise negotiate
with the Restricted Group as it deems advisable without in any way
diminishing the liability of the Restricted Group nor prejudicing the
rights of the Agent or the Lenders with respect to the Security.
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16 JUDGMENT CURRENCY
16.1 RULES OF CONVERSION
If for the purpose of obtaining judgment in any court or for any other
purpose hereunder, it is necessary to convert an amount due, advanced
or to be advanced hereunder from the currency in which it is due (the
"FIRST CURRENCY") into another currency (the "SECOND CURRENCY") the
rate of exchange used shall be that at which, in accordance with normal
banking procedures, the Agent could purchase, in the Canadian money
market or the Canadian exchange market, as the case may be, the First
Currency with the Second Currency on the date on which the judgment is
rendered, the sum is payable or advanced or to be advanced, as the case
may be. Each of the Borrowers, IPG and LLC agrees that its obligations
in respect of any First Currency due from it to the Lenders in
accordance with the provisions hereof shall, notwithstanding any
judgment rendered or payment made in the Second Currency, be discharged
by a payment made to the Agent on account thereof in the Second
Currency only to the extent that, on the Business Day following receipt
of such payment in the Second Currency, the Agent may, in accordance
with normal banking procedures, purchase on the Canadian money market
or the Canadian foreign exchange market, as the case may be, the First
Currency with the amount of the Second Currency so paid or which a
judgment rendered payable; and if the amount of the First Currency
which may be so purchased is less than the amount originally due in the
First Currency, each of the Borrowers, IPG and LLC agrees as a separate
and independent obligation and notwithstanding any such payment or
judgment to indemnify the Lenders against such deficiency.
16.2 DETERMINATION OF AN EQUIVALENT CURRENCY
If, in their discretion, the Lenders or the Agent choose or, pursuant
to the terms of this Agreement, are obliged to choose the equivalent in
Canadian Dollars of any securities or amounts expressed in US Dollars
or the equivalent in US Dollars of any securities or amounts expressed
in Canadian Dollars, the Agent, in accordance with the conversion rules
as stipulated in Section 16.1:
16.2.1 on the date indicated in the Notice of Borrowing as the
date of a request for an Advance; and
16.2.2 at any other time which in the opinion of the Lenders is
desirable;
may, using the spot rate of the Agent on such date, determine the
equivalent in Canadian Dollars or in US Dollars, as the case may be, of
any security or amount expressed in the other currency pursuant to the
terms hereof. Immediately following such determination, the Agent shall
inform the Borrowers and IPG of the conclusion which the Lenders have
reached.
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17 ASSIGNMENT
17.1 ASSIGNMENT BY THE BORROWERS
The rights of the Borrowers under the provisions hereof are purely
personal and may not be transferred or assigned, and the Borrowers may
not transfer or assign any of their obligations hereunder, such
assignment being null and of no effect opposite the Lenders and
rendering any balance outstanding of the amounts referred to in Section
l5.2 immediately due and payable at the option of the Lenders and
further releasing the Lenders from any obligation to make any further
Advances under the provisions hereof.
17.2 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
17.2.1 Each Lender may, at its own cost, assign or transfer to a
financial institution entitled to lend money in the United States
of America or Canada (the "ASSIGNEE") in accordance with this
Article 17 any or all of its rights, benefits and obligations
under Facility A and/or Facility B and/or Facility C hereunder
with the prior consent of the relevant Borrower(s), which will not
be unreasonably withheld or delayed. After the occurrence and
during the continuance of a Default or after the occurrence of an
Event of Default and unless and until same has been waived, any
Lender may transfer all or any part of its rights, benefits and
obligations hereunder to any Person, without the consent of any of
the Borrowers, but upon notice to the relevant Borrower(s). The
prior written consent of the Issuing Lender (as defined in Section
4.3) shall be required in the case of assignment in relation to
Facility A.
17.2.2 Any such assignment or transfer shall be for a minimum
amount of US $5,000,000 and in multiples of US $1,000,000
thereafter, of any Commitment.
17.2.3 Notwithstanding subsection 17.2.1, each Lender shall be
entitled to assign or transfer, at its own cost, in accordance
with the other provisions of this Section 17 (including 17.5), its
rights, benefits and obligations hereunder, in whole or in part,
to a parent, a subsidiary or an affiliate of such Lender, provided
that such Lender has taken all reasonable measures to avoid any
resulting adverse tax consequences, including increases in respect
of withholding, for any of the Borrowers.
17.3 TRANSFER AGREEMENT
If a Lender wishes to assign or transfer all or any of its rights,
benefits and obligations hereunder in accordance with Section 17.2,
then such assignment or transfer shall be effected by the execution and
delivery by such Lender to the Agent of a duly completed and executed
Transfer Agreement whereupon, to the extent that in such Transfer
Agreement the Lender seeks to assign or transfer its rights and
obligations hereunder:
17.3.1 such Lender shall be released from further obligations to
the Borrowers with respect to the portion of the obligations of
such Lender assumed by the Assignee;
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17.3.2 the Assignee shall assume the obligations of such Lender
and acquire the rights of such Lender in respect of the Borrowers,
LLC, IPG and the other Guarantors, without novation of the
Borrowers' obligations;
17.3.3 the Agent, such Lender and the Assignee shall acquire the
same rights and assume the same obligations between themselves as
they would have acquired and assumed had the Assignee been an
original party hereto with the obligations assumed and the rights
acquired by it as a result of such assignment or transfer; and
17.3.4 such Lender, the Agent, the Borrowers, LLC, IPG and the
other Guarantors shall execute such documents and perform such
acts as may be required to give effect to the transfer or
assignment.
17.4 NOTICE
The Agent shall promptly deliver a copy of any Transfer Agreement to
each party thereto.
17.5 SUB-COMMITMENTS
A Lender may, at its own cost, grant one or more sub-participations in
its rights, benefits and obligations hereunder, provided that,
notwithstanding any such sub-participation, such Lender shall remain,
insofar as the Borrowers and the Agent are concerned, as the Lender
responsible hereunder, and the Borrowers shall not be obliged to
recognize any such sub-participant as having the rights against it
which it would have if it had been a party hereto.
17.6 GENERAL
Notwithstanding anything contained in this Article:
17.6.1 the Agent shall act as agent (the "AGENT") for each
Assignee and, in this connection, with respect to all decisions,
notices and other matters relating to anything referred to in this
Agreement, the Borrowers shall only be obliged to give notice to
or request consents from the Agent; and
17.6.2 provided no Default shall have occurred and be continuing
and no Event of Default has occurred which has not been waived,
the Lenders shall use reasonable efforts to ensure that the
amounts payable by the Borrowers under this Agreement will not
increase, whether in respect of withholding on account of taxes or
otherwise, as a result of any such assignment or transfer to an
Assignee which is organized under the laws of a jurisdiction
outside of the United States of America. In this regard, Comerica
shall use reasonable efforts to maintain its existing arrangements
with the Borrowers on account of withholding taxes.
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18 THE AGENT AND THE LENDERS
18.1 AUTHORIZATION OF AGENT
Each Lender hereby irrevocably appoints and authorizes the Agent to act
for all purposes as its agent hereunder and under the Security
Documents to which it is a secured party with such powers as are
expressly delegated to the Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto,
and undertakes not to take any action on its own. Notwithstanding the
provisions of any Law relating to contracts generally or to agency
arrangements, the Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement. As to any matters not
expressly provided for by this Agreement, the Agent shall act hereunder
or in connection herewith in accordance with the instructions of the
Lenders in accordance with the provisions of this Article 18, but, in
the absence of any such instructions, the Agent may (but shall not be
obliged to) act as it shall deem fit in the best interests of the
Lenders, and any such instructions and any action taken by the Agent in
accordance herewith shall be binding upon each Lender. The Agent shall
not, by reason of this Agreement, be deemed to be a trustee for the
benefit of any Lender, the Borrowers or any other Person. Neither the
Agent nor any of its directors, officers, employees or agents shall be
responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any
certificate or other document referred to, or provided for in, or
received by any of them under, this Agreement, for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other document referred to or provided for herein or
any collateral provided for hereby or for any failure by the Borrowers,
LLC or IPG to perform its or their obligations hereunder. The Agent may
employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither the Agent nor any of its
directors, officers, employees or agents shall be responsible for any
action taken or omitted to be taken by it or them under or in
connection herewith, except for its or their own gross negligence or
wilful misconduct.
18.2 POWER OF ATTORNEY FOR QUEBEC PURPOSES
For greater certainty, and without limiting the powers of the Agent
hereunder or the powers of the Agent, the Canadian Collateral Agent,
the Canadian Collateral Trustee, the US Collateral Agent or the US
Collateral Trustee under the Security Documents, each of the Lenders
hereby acknowledges that the Canadian Collateral Agent and the Canadian
Collateral Trustee (collectively, the "PARTIES") shall, for the
purposes of holding any security granted under the Security Documents
pursuant to the laws of the Province of Quebec to secure payment of
debentures (or any similar instruments), each be the holder of an
irrevocable power of attorney (fonde de pouvoir) (within the meaning of
Article 2692 of the Civil Code of Quebec) for all present and future
Lenders and holders of such debentures, in respect of the Security
described in Section 10.2, all present and future holders of the Notes
and the holders of such debentures. Each of the Lenders and TD, as
holder of said debentures, hereby constitutes, to the extent necessary,
each of the Parties as the holder of such irrevocable power of attorney
(fonde de pouvoir) in order to hold security granted under the Security
Documents in the Province of Quebec to secure the debentures (or any
similar instrument). Each assignee Lender shall be deemed to have
confirmed and ratified the constitution of each of the Parties as the
holder of such irrevocable power of attorney (fonde de pouvoir) by
execution of the relevant Transfer Agreement. Notwithstanding the
provisions of Section 32 of the Special Powers of Legal Persons Act
(Quebec), each of the Parties may acquire and be the holder of a
debenture (or any
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similar instrument). Each member of the Restricted Group hereby
acknowledges that each of the debentures executed in connection
herewith constitutes a title of indebtedness, as such term is used in
Article 2692 of the Civil Code of Quebec. The Canadian Collateral Agent
hereby acknowledges and accepts the Quebec deeds of hypothec granted
pursuant to Section 10.1 forming part of the Security Documents and
agrees to be bound by the provisions thereof.
Notwithstanding Section 19.8 hereof, the provisions of this Section
18.2 shall be governed by the laws of Quebec and the federal laws of
Canada applicable therein.
18.3 AGENT'S RESPONSIBILITY
18.3.1 The Agent shall be entitled to rely upon any certificate,
notice or other document (including any cable, telegram, telex or
telecopy) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper person or
persons, and upon advice and statements of legal advisers,
independent accountants and other experts selected by the Agent.
The Agent may deem and treat each Lender as the holder of the
Commitment in the Loan made by such Lender for all purposes hereof
unless and until an Assignment has been completed in accordance
with Section 17.2.
18.3.2 The Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default unless the Agent has
received notice from a Lender or a Borrower describing such a
Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default or Event of Default or
otherwise becomes aware that a Default or Event of Default has
occurred, the Agent shall promptly give notice thereof to the
Lenders. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the
Lenders in accordance with the provisions of this Article 18
provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obliged to) take such
action, or refrain from taking such action, with respect to such a
Default or Event of Default as it shall deem advisable in the best
interest of the Lenders.
18.3.3 The Agent shall have no responsibility, (a) to the
Borrowers, LLC or IPG on account of the failure of any Lender to
perform its obligations hereunder, or (b) to any Lender on account
of the failure of the Borrowers, LLC or IPG to perform their
obligations hereunder.
18.3.4 Each Lender severally represents and warrants to the Agent
that it has made its own independent investigation of the
financial condition and affairs of the Restricted Group in
connection with the making and continuation of its
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Commitment in the Loan hereunder and has not relied on any
information provided to such Lender by the Agent in connection
herewith, and each Lender represents and warrants to the Agent
that it shall continue to make its own independent appraisal of
the creditworthiness of the Restricted Group while the Loan is
outstanding or the Lenders have any obligations hereunder.
18.4 RIGHTS OF AGENT AS LENDER
The provisions of this Article 18 shall apply to the Agent solely in
its capacity as such, except to the extent expressly stated otherwise.
With respect to its Commitment in the Loan, the Agent in its capacity
as a Lender shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as
the Agent and the term "Lender" shall, unless the context otherwise
indicates, include the Agent in its capacity as a Lender. The Agent may
(without having to account therefor to any Lender) accept deposits
from, lend money to and generally engage in any kind of banking or
other business with the Restricted Group as if it were not acting as
the Agent and may accept fees and other consideration from the
Restricted Group for customary services in connection with this
Agreement and the Loan and otherwise without having to account for the
same to the Lenders. Any reference in this Agreement to the Agent
means, where the Agent is also a Lender, the agency department of such
Lender specifically responsible for acting as Agent under and in
connection with this Agreement. In acting as Agent, the agency
department will be treated as a separate entity from any other
department or division of the Lender in question. Without limiting the
foregoing, the Agent shall not be deemed to have notice of a document
or information received by any other department or division of that
Lender, nor will the Lender concerned be deemed to have notice of a
document or information received by any other department or division of
the Agent.
18.5 INDEMNITY
Each Lender agrees to indemnify the Agent, to the extent not otherwise
reimbursed by the Restricted Group, rateably in accordance with its
respective Commitment in the Loan, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgements, suits,
costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against, the Agent in
any way relating to or arising out of this Agreement, the Security
Documents or any other documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby
(excluding, unless a Default or Event of Default has occurred and is
continuing, normal administrative costs and expenses incidental to the
performance of its agency duties hereunder) or the enforcement of any
of the terms hereof or of any such other documents, provided that no
Lender shall be liable for any of the foregoing to the extent they
arise from the Agent's gross negligence or wilful misconduct.
18.6 NOTICE BY AGENT TO LENDERS
As soon as practicable after its receipt thereof, the Agent will
forward to each Lender a copy of each report, notice or other document
required by this Agreement to be delivered to the Agent for such
Lender.
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18.7 PROTECTION OF AGENT
18.7.1 The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrowers, LLC or IPG of
this Agreement or any other document referred to or provided for
herein or therein or to inspect the properties or books of the
Restricted Group. Except for notices, reports and other documents
and information expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other
information concerning the affairs or financial condition of the
Restricted Group which may come to the attention of the Agent,
except where provided to the Agent for the Lenders, provided that
such information does not confer any advantage to the Agent, in
its capacity as a Lender, over the other Lenders. Nothing in this
Agreement shall oblige the Agent to disclose any information
relating to the Restricted Group if such disclosure would or
might, in the opinion of the Agent, constitute a breach of any
Laws or duty of secrecy or confidence.
18.7.2 Unless the Agent shall have been notified in writing by any
Lender prior to the date of an Advance requested hereunder that
such Lender does not intend to make available to the Agent such
Lender's Commitment in such Advance, the Agent may assume that
such Lender has made such Lender's Commitment in such Advance
available to the Agent on the date of such Advance and the Agent
may, in reliance upon such assumption, make available to the
relevant Borrower(s) a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Lender,
the Agent shall be entitled to recover such amount (together with
interest thereon at the rate determined by the Agent as being its
cost of funds in the circumstances) on demand from such Lender or,
if such Lender fails to reimburse the Agent for such amount on
demand, from the Borrowers.
18.7.3 Unless the Agent shall have been notified in writing by a
Borrower prior to the date on which any payment is due hereunder
that a Borrower does not intend to make such payment, the Agent
may assume that a Borrower has made such payment when due and the
Agent may, in reliance upon such assumption, make available to
each Lender on such payment date an amount equal to such Lender's
pro rata share of such assumed payment. If it is established that
a Borrower has not in fact made such payment to the Agent, each
Lender shall forthwith on demand repay to the Agent the amount
made available to such Lender (together with interest at the rate
determined by the Agent as being its cost of funds in the
circumstances).
18.8 NOTICE BY LENDERS TO AGENT
Each Lender shall endeavour to use its best efforts to notify the Agent
of the occurrence of any Default or Event of Default forthwith upon
becoming aware of such event, but no Lender shall be liable if it fails
to give such notice to the Agent.
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18.9 SHARING AMONG THE LENDERS
Each Lender agrees that as amongst themselves, except as otherwise
provided for by the provisions of this Agreement, all amounts received
by the Agent, in its capacity as agent of the Lenders pursuant to this
Agreement or any other document contemplated hereby (whether received
by voluntary payment, by the exercise of the right of set-off or
compensation or by counterclaim, cross-claim, separate action or as
proceeds of realization of any Security, other than agency fees and
arrangement fees and as provided in the third paragraph of this Section
18.9), shall be shared by each Lender pro rata, in accordance with
their respective Commitment and each Lender undertakes to do all such
things as may be reasonably required to give full effect to this
Section 18.9. If any amount which is so shared is later recovered from
the Lender who originally received it, each other Lender shall restore
its proportionate share of such amount to such Lender, without
interest.
As a necessary consequence of the foregoing, each Lender shall share,
in a percentage equal to its Commitment, any losses incurred as a
result of any Default or Event of Default, and shall pay to the Agent,
within two (2) Business Days following a request by the Agent, any
amount required to ensure that such Lender bears its pro rata share of
such losses, if any, including any amounts required to be paid to any
Lender in respect of any Bankers' Acceptances or Letters of Credit.
Such obligation to share losses shall be absolute and unconditional and
shall not be affected by any circumstance, including (1) any set-off,
compensation, counterclaim, recoupment, defence or other right which
such Lender may have against the Agent, any member of the Restricted
Group or any other Person for any reason whatsoever; (2) the occurrence
or continuance of any Default or Event of Default; (3) any adverse
change in the condition (financial or otherwise) of the Restricted
Group or any other Person; (4) any breach of this Agreement by the
Borrowers, IPG, LLC or any other Person; or (5) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing. If any Lender does not make available the amount required
hereunder, the Agent shall be entitled to recover such amount on demand
from such Lender, together with interest thereon at the US Prime Rate
from the date of non-payment until such amount is paid in full.
Subject to the provisions of Section 10.3, the Lenders acknowledge and
agree that the Facility A Lenders have Charges on the Operating Assets
ranking prior to the Charges thereon held for the benefit of the
Facility B and Facility C Lenders. The Lenders further acknowledge that
any proceeds obtained by the Agent arising out of deposits made by or
for the account of the Facility A Borrowers in their operating accounts
may be used firstly to set off or compensate Loans under Facility A,
second to set off or compensate Loans owing under Facility B and then
to Loans under Facility C. Finally, the Lenders acknowledge and agree
that the relative priorities of the Facility A Lenders and the Facility
B and Facility C Lenders in the event of realization upon the Security
will be governed by the provisions of Section 15.4.
This Section shall be subject to the provisions of the Inter-Creditor
Agreement.
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18.10 DERIVATIVE OBLIGATIONS
18.10.1 The Derivative Obligations shall be secured by the
Security granted under Section 10.2 provided that the related
Derivative Instruments:
(a) are governed by the ISDA Master Agreement (1992 Version)
of the International Swaps and Derivatives Association,
Inc.;
(b) provide that bankruptcy or insolvency constitutes an
event of default thereunder; and
(c) provide that for the purposes of Section 6(e) of the
ISDA Master Agreement (1992 Version) of the
International Swaps and Derivatives Association, Inc.,
the "Market Quotation" and the "Second Method" methods
of calculation apply.
18.10.2 Each Lender shall confirm to the Agent the details of each
Derivative Instrument executed by it by or for the benefit of a
Borrower within thirty (30) days of such execution.
18.10.3 Each Lender shall also confirm to the Agent and to the
Borrowers, quarterly on or about the last day of March, June,
September and December of each fiscal year, the Negative Value of
the Derivative Instruments issued by it or contracted through it,
calculated on a net as well as on a gross basis where several
Derivative Instruments are governed by the same Master Agreement,
as well as the Facility in respect of which such Derivative
Instruments apply. The Agent shall then confirm to each Lender the
total amount of the Negative Value of Derivative Instruments
entered into with each Lender.
18.11 PROCEDURE WITH RESPECT TO ADVANCES
Subject to the provisions of this Agreement, including those with
respect to Swing Line Advances, upon receipt of a Notice of Borrowing
from a Borrower, the Agent shall, without delay, advise each Lender of
the receipt of such notice, and of its proportionate share of the
amount of each Advance and of the relevant details of the Agent's
account(s). Each Lender shall disburse its proportionate share of each
Advance, taking into account its Commitment, and shall make it
available to the Agent (no later than 10:00 a.m.) on the date of the
Advance fixed by such Borrower, by depositing its proportionate share
of the Advance in the Agent's account in Canadian Dollars or US
Dollars, as the case may be. Once such Borrower has fulfilled the
conditions stipulated in this Agreement, the Agent will make such
amounts available to such Borrower on the date of the Advance, at the
Branch, and, in the absence of other arrangements made in writing
between the Agent and such Borrower, by transferring or causing to be
transferred an equivalent amount in the case of a Loan, and the
Available Proceeds (as defined in subsection 6.2.3(d)) in the case of
Bankers' Acceptances, in accordance with the instructions of such
Borrower which appear in the Notice of Borrowing with respect to the
Advance; however, the obligation of the Agent
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with respect hereto is limited to taking the steps judged commercially
reasonable in order to follow such instructions, and once undertaken,
such steps shall constitute conclusive evidence that the amounts have
been disbursed in accordance with the applicable provisions. In the
absence of its gross negligence or willful misconduct, the Agent shall
not be liable for damages, claims or costs imputed to such Borrower and
resulting from the fact that the amount of an Advance did not arrive at
its agreed-upon destination.
18.12 ACCOUNTS KEPT BY EACH LENDER
Each Lender shall keep in its books, in respect of its Commitment,
accounts for the Libor Advances, Prime Rate Advances, US Prime Rate
Advances, US Base Rate Advances, Bankers' Acceptances and other amounts
payable by the Borrowers to such Lender under this Agreement. Each
Lender shall make appropriate entries showing, as debits, the amount of
the Debt of the Borrowers to it in respect of the Libor Advances, Prime
Rate Advances, US Prime Rate Advances and US Base Rate Advances and BA
Advances, as the case may be, the amount of all accrued interest and
any other amount due to such Lender pursuant hereto and, as credits,
each payment or repayment of principal and interest made in respect of
such indebtedness as well as any other amount paid to such Lender
pursuant hereto. These accounts shall constitute (in the absence of
manifest error or of contradictory entries in the accounts of the Agent
referred to in Section 18.11) prima facie evidence of their content
against the Borrowers.
The accounts which are maintained by the Agent shall constitute, except
in the case of manifest error, prima facie proof of the amounts
advanced and the Bankers' Acceptances accepted by each Lender, the
interest and other amounts due to them and the payments of principal,
interest or other amounts made to or for the account of the Lenders
pursuant hereto.
18.13 BINDING DETERMINATIONS
The Agent shall proceed in good faith to make any determination which
is required in order to apply this Agreement and, once made, such
determination shall be final and binding upon all Lenders, except in
the case of manifest error.
18.14 AMENDMENT OF ARTICLE 18
The provisions of this Article 18 relating to the rights and
obligations of the Lenders and the Agent inter se may be amended or
added to, from time to time, by the execution by the Agent and the
Lenders of an instrument in writing and such instrument in writing
shall validly and effectively amend or add to any or all of the
provisions of this Article 18 affecting the Lenders without requiring
the execution of such instrument in writing by the Borrowers.
18.15 DECISIONS, AMENDMENTS AND WAIVERS OF THE LENDERS
When the Lenders may or must consent to an action or to anything or to
accomplish another act in applying this Agreement, the Agent shall
request that each Lender give its consent in this regard. Subject to
the provisions of Section 18.16, all decisions taken by the Lenders
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shall be taken by the Majority Lenders. The Agent shall confirm such
consent to each Lender and to the Borrowers.
18.16 AUTHORIZED WAIVERS, VARIATIONS AND OMISSIONS
If so authorized in writing by the Lenders, the Agent, on behalf of the
Lenders, may grant waivers, consents, vary the terms of this Agreement
and, subject to the provisions of the Inter-Creditor Agreement and the
Collateral Trust Indenture, the Security Documents and do or omit to do
all acts and things in connection herewith or therewith.
Notwithstanding the foregoing, except with the prior written agreement
of each of the Lenders, nothing in Section 18.15 or this Section 18.16
shall authorize (i) any extension of the date for, or alteration in the
amount, currency or mode of calculation or computation of, any payment
of principal or interest or other amount, (ii) any increase in the
Commitment of a Lender, (iii) any extension of any maturity date, (iv)
any change in the terms of Article 18, (v) any change in the manner of
making decisions among the Lenders, or in the definition of Majority
Lenders, (vi) the release of any Borrower or any Guarantor, (vii) the
release, in whole or in part, of any of the Security Documents, or
(viii) any change in or any waiver of the conditions precedent provided
for in Article 11.
18.17 PROVISIONS FOR THE BENEFIT OF LENDERS ONLY
The provisions of this Article 18 relating to the rights and
obligations of the Lenders and Agent inter se shall be operative as
between the Lenders and Agent only, and the Borrowers shall not have
any rights or obligations under or be entitled to rely for any purposes
upon such provisions. However, the provisions of subsection 18.3.3
shall be applicable as between the Borrowers, IPG, LLC and the Agent
and the provisions of Sections 18.2 and 18.9 shall be applicable as
between the Borrowers, IPG, LLC, the Agent, the Lenders and (in the
case of Section 18.2) the other Parties referred to therein.
18.18 RESIGNATION OF AGENT
18.18.1 Notwithstanding the irrevocable appointment of the Agent,
the Majority Lenders may (with the consent of the Borrowers), upon
giving the Agent ninety (90) days prior written notice to such
effect, terminate the Agent's appointment hereunder provided that
a successor Agent has been appointed at or prior to the expiry of
such notice.
18.18.2 The Agent may resign its appointment hereunder at any time
without giving any reason therefor by giving written notice to
such effect to each of the other parties hereto. Such resignation
shall not be effective until a successor Agent has been appointed.
18.18.3 In the event of any such termination or resignation, the
Lenders shall appoint a successor Agent acceptable to the
Borrowers and deliver copies of all accounts to such successor,
and the retiring Agent shall be discharged from any further
obligations hereunder but shall remain entitled to the benefit of
the provisions of this Article 18 and the Agent's successor, and
each of the other parties
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hereto shall have the same rights and obligations among themselves
as they would have had if such successor originally had been a
party hereto as Agent.
18.19 CANADIAN AGENT AND US AGENT
Notwithstanding any other provision hereof, and unless otherwise
directed by the Agent, Notices of Borrowing and other matters hereunder
(collectively, the "MATTERS") concerning the US Borrowers and US
Lenders shall be dealt with by and addressed to the US Agent, and
Matters concerning the Canadian Borrower and the Canadian Lenders shall
be dealt with by and addressed to the Canadian Agent. Where such Matter
relates to both Canadian and US parties (for example, the notice
described in Section 2.2), such Matter shall be dealt with by and
addressed to both the US Agent and the Canadian Agent. The payment of
Fees and the repayment of the Loans shall be made as follows or
otherwise as directed by the Agents:
18.19.1 the US Borrowers shall make such payments and repayments
to the US Agent; and
18.19.2 the Canadian Borrowers shall make such payments and
repayments to the Canadian Agent.
19 MISCELLANEOUS
19.1 NOTICES
Except where otherwise specified herein, all notices, requests, demands
or other communications between the parties hereto shall be in writing
and shall be deemed to have been duly given or made to the party to
whom such notice, request, demand or other communication is given or
permitted to be given or made hereunder, when delivered to the party
(by certified or registered mail, postage prepaid, or by telegraph,
telex, facsimile or by courier or physical delivery) to the address of
such party and to the attention indicated under the signature of such
party or to any other address which such party may subsequently
communicate to each other party hereto in writing. Any notice given by
mail is deemed to have been received on the second Business Day
following the day on which the envelope containing the notice has been
deposited in a post office or in a mail box in the United States of
America or Canada. If normal postal or telegraph service is interrupted
by strike, work slow-down, fortuitous event or other cause, the party
sending the notice shall use such services which have not been
interrupted or shall deliver such notice in any other manner permitted
by this Section 19 in order to ensure its prompt receipt by the other
party.
19.2 AMENDMENT AND WAIVER
The rights and recourses of the Agent and the Lenders under this
Agreement and the Security Documents are cumulative and do not exclude
any other rights and recourses which the Agent or the Lenders might
have, and no omission or delay on the part of the Agent or the Lenders
in the exercise of any right shall have the effect of operating as a
waiver of such right, and the partial or sole exercise of a right or
power will not prevent the
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Agent and the Lenders from exercising thereafter any other right or
power. The provisions of this Agreement may only be amended or waived
by an instrument in writing (and not orally) in each case signed by the
members of the Restricted Group party hereto and by the Agent with the
approval of the requisite Lenders.
19.3 DETERMINATIONS FINAL
In the absence of any manifest error, any determinations to be made by
the Agent or the Lenders in accordance with the provisions hereof, when
made, are final and irrevocable for all parties.
19.4 ENTIRE AGREEMENT
The entire agreement between the parties is expressed herein, and no
variation or modification of its terms shall be valid unless expressed
in writing and signed by the requisite parties in accordance with
Section 19.2. All previous agreements, promises, proposals,
representations, understandings and negotiations between the parties
hereto which relate in any way to the subject matter of this Agreement
are hereby deemed to be null.
19.5 INDEMNIFICATION AND COMPENSATION
In addition to the other rights now or hereafter conferred by law and
those described in subsection 6.6.2 and Section 9.14, and without
limiting such rights, if a Default should occur and is continuing or an
Event of Default has occurred which has not been waived, each Lender
and the Agent is hereby authorized by the Borrowers, LLC and IPG, at
any time and from time to time, subject to the obligation to give
notice to the Borrowers, LLC and IPG subsequently and within a
reasonable delay, to indemnify, compensate, use and allocate any
deposit (general or special, term or demand, including, without
limitation, any debt evidenced by certificates of deposit, whether or
not matured) and any other debt at any time held or due by the Lenders
to any member of the Restricted Group or to its or their credit or its
or their account, with respect to and on account of any obligation and
Debt of the Borrowers, LLC and IPG to the Lenders in accordance with
the provisions hereof or the Security Documents, including, without
limitation, the accounts of any nature or kind which flow from or
relate to this Agreement, whether or not the Agent has made demand
under the terms hereof or has declared the amounts referred to in
Section 15.2 as payable in accordance with the provisions of that
Section and even if such obligation and Debt or either of them is a
future or unmatured Debt.
19.6 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its successors and permitted assigns.
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19.7 COUNTERPARTS
This Agreement may be signed in any number of counterparts, each of
which shall be deemed to constitute an original, but all of the
separate counterparts shall constitute one single document.
19.8 APPLICABLE LAW
This Agreement, its interpretation and its application shall be
governed by the Laws of the State of New York.
19.9 SEVERABILITY
Each provision of this Agreement is separate and distinct from the
others, such that any decision of a court or tribunal to the effect
that any provision of this Agreement is null or unenforceable shall in
no way affect the validity of the other provisions of this Agreement or
the enforceability thereof. Any provision of this agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable Laws, each of the
Borrowers, LLC and IPG hereby waives any provision of any Laws which
renders any provision hereof prohibited or unenforceable in any
respect.
19.10 FURTHER ASSURANCES
IPG covenants and agrees on its own behalf and on behalf of each member
of the Restricted Group that, at the request of the Agent, IPG and each
member of the Restricted Group will at any time and from time to time
execute and deliver such further and other documents and instruments
and do all acts and things as the Agent in its reasonable discretion
requires in order to evidence the indebtedness of the Restricted Group
under this Agreement, under the Security Documents, or otherwise as
contemplated herein, and to confirm and perfect, and maintain
perfection of, the Security.
19.11 GOOD FAITH AND FAIR CONSIDERATION
Each of the Borrowers, LLC and IPG acknowledges and declares that it
has entered into this Agreement freely and of its own will. In
particular, each of the Borrowers, LLC and IPG acknowledges that the
Agreement was negotiated by it and by the Lenders in good faith, and
that there was no exploitation of the Borrowers, LLC or IPG by the
Lenders, nor is there any serious disproportion between the
consideration provided by the Lenders and that provided by the
Borrowers, LLC and IPG.
19.12 EXCESS RESULTING FROM EXCHANGE RATE CHANGE
19.12.1 Subject to Section 19.12.2, if on any Rollover Date,
following one or more fluctuations in the exchange rate of the
Canadian Dollar against the US Dollar, the sum of:
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(a) the equivalent amount in US Dollars of Loans in Canadian
Dollars; and
(b) the Loans in US Dollars;
exceeds the amount of the Credit then available, the relevant
Borrower(s) shall immediately either (i) make the necessary
payments or repayments to the Agent to reduce the Loans to an
amount equal to or less than the available amount of the Credit or
(ii) maintain or cause to be maintained with the Agent, deposits
of US Dollars in an amount equal to or greater than the amount by
which the Loans exceed the available amount of the Credit, such
deposits to be maintained in such form and upon such terms as are
acceptable to the Agent. Without in any way limiting the foregoing
provisions, the Agent shall, on the date of each request for an
Advance or on the date of any interest payment or on each Rollover
Date, make the necessary exchange rate calculations to determine
whether any such excess exists on such date and, if there is an
excess, it shall so notify the relevant Borrower(s).
19.12.2 Notwithstanding subsection 19.12.1, the Agent shall be
entitled, in its sole discretion, to require that the Borrowers
(a) make the payments or repayments or maintain the deposits
required to be made or maintained under Section 19.12.1; or (b)
fully hedge, to the reasonable satisfaction of the Agent, the
excess hereinafter referred to in this subsection 19.12.2 and
assign the benefit of all hedging contracts to the Agent in any
case where the sum of (i) the equivalent amount in US Dollars of
Loans in Canadian Dollars and (ii) the Loans in US Dollars,
exceeds the available amount of the Credit.
19.13 RESPONSIBILITY OF THE LENDERS
Each Lender shall be solely responsible for the performance of its own
obligations hereunder. Accordingly, no Lender is in any way jointly and
severally or solidarily responsible for the performance of the
obligations of any other Lender.
19.14 INDEMNITY
In addition to the Canadian Environmental Indemnity Agreement and the
US Environmental Indemnity Agreement, each of IPG, LLC and the
Borrowers agrees to indemnify and defend the Agent, each Lender and
their respective directors, officers, agents and employees from, and
hold each of them harmless against, any and all losses, liabilities,
claims, damages or expenses of any kind which at any time or from time
to time may be asserted against or incurred or paid by any of them for
or in connection with: (i) the participation of the Agent or of any of
the Lenders in the transactions contemplated by this Agreement, (ii)
the role of the Agent or the Lenders in any investigation, litigation
or other proceeding brought or threatened relating to the Credit,
and/or (iii) the compliance with or enforcement of any of their rights
or obligations hereunder, including:
19.14.1 the reasonable fees and disbursements of counsel; and
119
19.14.2 the costs of defending, counterclaiming or claiming over
against third parties in respect of any action or matter and any
cost, liability or damage arising out of any settlement;
other than losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the indemnified
party, as determined by a final judgment of a court of competent
jurisdiction.
19.15 JURISDICTION AND SERVICE IN RESPECT OF IPG, LLC AND THE BORROWERS
Any legal action or proceeding with respect to this Agreement or any
document related thereto may be brought in the courts of the State of
New York or of the United States of America for the Southern District
of New York, and, by execution and delivery of this Agreement, each of
the Borrowers, LLC and IPG hereby accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each of the Borrowers, LLC and IPG hereby irrevocably
and unconditionally waives any objection, including, any objection to
the laying of venue or based on the grounds of forum non conveniens,
which it may now or hereafter have to the bringing of any such action
or proceeding in such respective jurisdictions. Each of the Borrowers,
LLC, IPG, the Agent and Lenders hereby irrevocably and unconditionally
waives trial by jury.
Each of the Borrowers, LLC and IPG further consents that all service of
process in any such action or proceeding may be made by delivery to it
at the address of the Borrowers, LLC or IPG, as the case may be, set
forth on the signature page hereof or to its agent referred to below at
such agent's address set forth below and that service so made shall be
deemed to be completed upon actual receipt. Each of the Borrowers, LLC
and IPG for itself hereby irrevocably appoints CT Corporation System
with an office on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, as its agent for the purpose of receiving service of any process
within the State of New York. Nothing contained in this Section 19.15
shall affect the right of the Agent or the Lenders to serve legal
process in any other manner permitted by Law or to bring any action or
proceeding in the courts of any jurisdiction against the Borrowers, LLC
or IPG or to enforce a judgment obtained in the courts of any other
jurisdiction.
19.16 UNDERTAKING AND REPRESENTATION OF THE LENDERS
Subject to the provisions of Section 17.6, each of the Lenders shall
provide the Borrowers with an IRS Form W-8ECI certifying that, and
represents to the Borrowers, LLC and IPG that, the interest paid to it
hereunder is in connection with a U.S. trade or business conducted by
it and therefore exempt from U.S. withholding taxes.
19.17 LANGUAGE
The parties acknowledge that they have required that the present
agreement, as well as all documents, notices and legal proceedings
entered into, given or instituted pursuant hereto or relating directly
or indirectly hereto be drawn up in English. Les parties reconnaissent
avoir exige la redaction en anglais de la presente convention ainsi que
de tous documents
120
executes, xxxx xxxxxx et procedures judiciaires intentees, directement
ou indirectement, relativement ou a la suite de la presente convention.
20 FORMAL DATE
20.1 FORMAL DATE
For the purposes of convenience, this Credit Agreement may be referred
to as bearing formal date of December 20, 2001, notwithstanding its
actual date of signature.
[Signature Page Follows]
121
IN WITNESS WHEREOF THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE AND
AT THE PLACE FIRST HEREIN ABOVE MENTIONED.
INTERTAPE POLYMER INC. INTERTAPE POLYMER CORP.
Per: /s/ Xxx Xxx Xxxxxxxxx Per: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ---------------------------
President Vice President
Address: 110E Xxxxxx xx Xxxxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xx. Xxxxxxx, Xxxxxx Bradenton, FL 34210
X0X 0X0 Attention: President
Attention: Chief Financial Officer Telephone: (000) 000-0000
Telephone: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
IPG (US) HOLDINGS INC. IPG (US) INC.
Per: /s/ Xxxxxxx X. Xxxxxxxx Per: /s/ Xxx Xxx Xxxxxxxxx
----------------------------- ---------------------------
Vice President President
Address: 0000 Xxxxxx Xxxx Xxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
IPG ADMINISTRATIVE SERVICES INC. CENTRAL PRODUCTS COMPANY
Per: /s/ Xxxxxxx X. Xxxxxxxx Per: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ---------------------------
Vice President Administration Vice President
Address: 0000 Xxxxxx Xxxx Xxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
122
INTERTAPE INC. INTERTAPE POLYMER
MANAGEMENT CORP.
Per: /s/ Xxxxxxx X. Xxxxxxxx Per: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ---------------------------
Vice President Manufacturing Vice President
Address: 0000 Xxxxxx Xxxx Xxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
POLYMER INTERNATIONAL CORP. INTERNATIONAL CONTAINER SYSTEMS, INC.
Per: /s/ Xxxxxxx X. Xxxxxxxx Per: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ---------------------------
President Vice President
Address: 0000 Xxxxxx Xxxx Xxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
UTC ACQUISITION CORP. INTERTAPE INTERNATIONAL CORP.
Per: /s/ Xxxxxxx X. Xxxxxxxx Per: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ---------------------------
President President
Address: 0000 Xxxxxx Xxxx Xxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
COIF HOLDING INC. FIBC HOLDING INC.
Per: /s/ Xxxxxxx X. Xxxxxxxx Per: /s/ Xxx Xxx Xxxxxxxxx
----------------------------- ---------------------------
Secretary President
Address: 0000 Xxxxxx Xxxx Xxxx Address: 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
123
CAJUN BAG & SUPPLY CORP. INTERPACK MACHINERY INC.
Per: /s/ Xxx Xxx Xxxxxxxxx Per: /s/ Xxxxxxxxx Xxxxxx
--------------------------- ---------------------------
President Vice President Finance
Address: 0000 Xxxxxx Xxxx West Address: 110E Xxxxxx xx Xxxxxx
Xxxxxxxxx, XX 00000 Xx. Xxxxxxx, Xxxxxx
Xxxxxxxxx: Xxxxxxxxx X0X 0X0
Telephone: (000) 000-0000 Attention: President
Fax: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000
SPUNTECH FABRICS INC. IPG HOLDING COMPANY OF NOVA SCOTIA
Per: /s/ Xxxxxxxxx Xxxxxx Per: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------- ---------------------------
President Vice President Finance
Address: 110E Xxxxxx xx Xxxxxx Address: 110E Xxxxxx xx Xxxxxx
St. Laurent, Quebec St. Laurent, Quebec
H4T 1N4 X0X 0X0
Attention: President Attention: President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
IPG HOLDINGS LP, represented by its INTERTAPE POLYMER GROUP INC.
General Partner, INTERTAPE POLYMER INC
Per: /s/ Xxx Xxx Xxxxxxxxx Per: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------- ---------------------------
President CFO, Vice President Administration
Address: 110E Xxxxxx xx Xxxxxx Address: 110E Xxxxxx xx Xxxxxx
St. Laurent, Quebec St. Laurent, Quebec
H4T 1N4 X0X 0X0
Attention: General Partner Attention: Chief Financial Officer
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
IPG FINANCE LLC
Per: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
President
Address: 0000 Xxxxx Xxxx, Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
000
XXX TECHNOLOGIES INC.
Per: /s/ Xxxx Xxxxx
-----------------------------
President
Address: 0000 Xxxxx Xxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Fax: (000) 000-0000
000
XXX XXXXXXX-XXXXXXXX BANK, AS CANADIAN AGENT THE TORONTO-DOMINION BANK, AS LENDER
Per: /s/ Xxxxx Xxxxxxxx Per: /s/ Xxxx Xxxxxxxx
------------------------------ ------------------------------
/s/ Xxxx-Xxxxxxxx Xxxxx
------------------------------
Address: 00 Xxxxxxxxxx Xxxxxx Xxxx Address: 000 Xx. Xxxxxxx Xxxxxx West
38th Floor 9th Floor
Toronto, Ontario Xxxxxxxx, Xxxxxx
X0X 0X0 X0X 0X0
Attention: VP Loan, Syndications, Agency Attention: Xxxx-Xxxxxxxx Xxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
THE TORONTO-DOMINION BANK, INTERNATIONAL BANKING TORONTO DOMINION (TEXAS), INC., AS US AGENT
FACILITY, New York Branch, AS LENDER
Per: /s/ Xxxx Xxxxxx Per: /s/ Xxxx Xxxxxx
------------------------------ -------------------------------
Manager Vice President
Address: 00 Xxxx 00xx Xxxxxx Address: 000 Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000-0000 Xxxxxxx, Xxxxx, 00000
Attention: Xxxx Xxxxxx Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
COMERICA BANK, A MICHIGAN BANKING NATIONAL BANK OF CANADA, AS LENDER
CORPORATION AS LENDER
Per: /s/ Xxxxxxx X. Persons Per: /s/ Xxxxx Xxxxxxxx
------------------------------ -------------------------------
/s/ Xxxxxx Xxxxx
-------------------------------
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 00xx Xxxxx Xxxxxxx: 0000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx, 00000 Xxxxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxxxxx X. Persons Attention: Xxxxx Xxxxx
Telephone: 000-000-0000 Telephone: (000) 000-0000
Fax: 000-000-0000 Fax: (000) 000-0000
000
XXXXXXXX XXXX XX XXXXXX, XXX XXXX BRANCH, AS LENDER COMERICA BANK CANADA BRANCH, AS LENDER
Per: /s/ Auggie Marehetti Per: /s/ Xxxxxx Xxxxx
------------------------------- -----------------------------
/s/ Xxxx XxXxxxxx
-------------------------------
Address: 000 Xxxx 00xx Xxxxxx, 00xx Floor Address: Xxxxx 0000, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000 Royal Bank Plaza
Attention: Xxxxxx Xxxxxxxxx, Vice-President 000 Xxx Xxxxxx, X.X. Xxx 00
Telephone: (000) 000-0000 Xxxxxxx, Xxxxxxx, X0X 0X0
Fax: (000) 000-0000 Attention:Xxx Xxxxx
Telephone: (000) 000-0000 #000
Fax: (416_ 000-0000
127
TABLE OF CONTENTS
1 INTERPRETATION................................................................................................3
1.1 Definitions.............................................................................................3
1.2 Interpretation.........................................................................................34
1.3 Currency...............................................................................................35
1.4 Generally Accepted Accounting Principles...............................................................35
1.5 Division and Titles....................................................................................35
2 THE CREDIT...................................................................................................35
2.1 The Facilities.........................................................................................35
2.2 Facility A.............................................................................................36
2.3 Facility B and Facility C..............................................................................36
2.4 Extension of Term - Facility A.........................................................................36
3 PURPOSE......................................................................................................37
3.1 Purpose of the Advances................................................................................37
4 ADVANCES, CONVERSIONS AND OPERATION OF ACCOUNTS..............................................................37
4.1 Notice of Borrowing....................................................................................37
4.2 LIBOR Advances and Conversions.........................................................................37
4.3 Letters of Credit......................................................................................38
4.4 Swing Line Advances....................................................................................38
4.5 Currency...............................................................................................41
4.6 Operation of Accounts..................................................................................41
4.7 Apportionment of Advances..............................................................................41
4.8 Limitations on Advances................................................................................41
4.9 Netting................................................................................................41
4.10 Notices Irrevocable....................................................................................41
5 INTEREST AND FEES............................................................................................42
5.1 Interest on the Prime Rate Basis.......................................................................42
5.2 Payment of Interest on the Prime Rate Basis............................................................42
5.3 Interest on the US Base Rate Basis.....................................................................42
5.4 Payment of Interest on the US Base Rate Basis..........................................................42
5.5 Interest on the US Prime Rate Basis....................................................................42
5.6 Payment of Interest on the US Prime Rate Basis.........................................................43
5.7 Interest on the Libor Basis............................................................................43
5.8 Payment of Interest on the Libor Basis.................................................................43
5.9 Limits to the Determination of LIBOR...................................................................43
5.10 Fixing of LIBOR........................................................................................44
5.11 Interest on the Loan...................................................................................44
5.12 Arrears of Interest....................................................................................44
5.13 Maximum Interest Rate..................................................................................44
128
5.14 Fees 44
5.15 Interest Act...........................................................................................45
6 BANKERS' ACCEPTANCES..........................................................................................45
6.1 Advances by Bankers' Acceptances and Conversions into Bankers' Acceptances.............................45
6.2 Acceptance Procedure...................................................................................47
6.3 Purchase of Bankers' Acceptances and Discount Notes....................................................48
6.4 Maturity Date of Bankers' Acceptances..................................................................48
6.5 Deemed Conversions on the Maturity Date................................................................49
6.6 Conversion and Extension Mechanism.....................................................................49
6.7 Amounts Given to the Canadian Lenders do not Constitute a Prepayment...................................49
6.8 Prepayment of Bankers' Acceptances.....................................................................49
6.9 Apportionment Amongst the Canadian Lenders.............................................................49
6.10 Cash Deposits..........................................................................................50
6.11 Days of Grace..........................................................................................50
6.12 Obligations Absolute...................................................................................50
6.13 Depository Bills and Notes Act.........................................................................51
7 RESTRICTIONS, LIMITATIONS AND MARKET CONDITIONS...............................................................51
7.1 Market for Bankers' Acceptances and Libor Advances.....................................................51
7.2 Suspension of BA Advance and Libor Advance Option......................................................51
7.3 Limits on BA Advances, Letters of Credit and Libor Advances............................................52
8 ILLEGALITY, INCREASED COSTS AND INDEMNIFICATION...............................................................52
8.1 Illegality, Increased ..Costs..........................................................................52
8.2 Indemnity..............................................................................................53
8.3 Withholding Taxes......................................................................................54
8.4 Survival...............................................................................................54
9 PAYMENT, REPAYMENT AND PREPAYMENT.............................................................................55
9.1 Repayment of the Loan..................................................................................55
9.2 Amount and Apportionment of Mandatory Repayments.......................................................55
9.3 Voluntary Prepayment, Reduction and Cancellation of the Credit.........................................58
9.4 Payment of Losses Resulting From a Prepayment..........................................................58
9.5 Voluntary Reductions of the Credit.....................................................................59
9.6 Currency of Mandatory Repayments and Payments..........................................................59
9.7 Payments by the Borrowers to the Agents................................................................59
9.8 Payment on a Business Day..............................................................................59
9.9 Payments by the Lenders to the Agents..................................................................59
9.10 Payments by the Agent to the Borrowers.................................................................59
9.11 Netting................................................................................................60
9.12 Application of Payments................................................................................60
9.13 No Set-Off or Counterclaim by Borrowers................................................................60
9.14 Debit Authorization....................................................................................61
10 SECURITY......................................................................................................61
10.1 Security for Advances under Facility A.................................................................61
129
10.2 Security for Advances Under Facility B and Facility C..................................................62
10.3 Release Periods........................................................................................64
11 CONDITIONS PRECEDENT..........................................................................................66
11.1 Initial Advance under the Credit.......................................................................66
11.2 Conditions Precedent to any Advance....................................................................69
12 REPRESENTATIONS AND WARRANTIES................................................................................70
12.1 Incorporation..........................................................................................70
12.2 Authorization..........................................................................................70
12.3 Compliance of this Agreement...........................................................................70
12.4 Business...............................................................................................71
12.5 Financial Statements...................................................................................71
12.6 Contingent Liabilities and Indebtedness................................................................72
12.7 Title to Assets........................................................................................72
12.8 Litigation.............................................................................................72
12.9 Taxes 72
12.10 Insurance..............................................................................................72
12.11 No Adverse Change......................................................................................72
12.12 Regulatory Approvals...................................................................................73
12.13 Compliance with Laws...................................................................................73
12.14 Foreign Assets Control Regulations, etc................................................................73
12.15 Pension and Employment Liabilities, Compliance with ERISA..............................................73
12.16 Priority...............................................................................................74
12.17 Complete and Accurate Information......................................................................75
12.18 Event of Default.......................................................................................75
12.19 Agreements with Third Parties..........................................................................75
12.20 Environment............................................................................................75
12.21 Solvency...............................................................................................77
12.22 Existing Subsidiaries..................................................................................77
12.23 Location of Assets and Head Offices....................................................................77
12.24 Survival of Representations and Warranties.............................................................77
13 POSITIVE COVENANTS............................................................................................78
13.1 Preservation of Juridical Personality..................................................................78
13.2 Preservation of Licenses...............................................................................78
13.3 Compliance with Applicable Laws........................................................................78
13.4 Maintenance of Assets..................................................................................78
13.5 Business...............................................................................................78
13.6 Insurance..............................................................................................79
13.7 Payment of Taxes and Duties............................................................................79
13.8 Access and Inspection..................................................................................79
13.9 Maintenance of Account.................................................................................80
13.10 Performance of Obligations.............................................................................80
13.11 Maintenance of Ratios..................................................................................80
13.12 Mandatory Repayments...................................................................................83
13.13 Maintenance of Security................................................................................83
130
13.14 Priority of Debt........................................................................................84
13.15 Payment of Legal Fees and Other Expenses................................................................84
13.16 Financial Reporting.....................................................................................84
13.17 Notice of Certain Events................................................................................89
13.18 Accuracy of Reports.....................................................................................89
13.19 Lenders' Option to Obtain Improved Terms and Conditions.................................................90
13.20 Designation of Restricted Subsidiaries..................................................................90
13.21 Undertaking with regard to Operating Assets.............................................................90
13.22 Additional Undertakings.................................................................................91
13.23 Intellectual Property...................................................................................91
14 NEGATIVE COVENANTS.............................................................................................91
14.1 Liquidation, Amalgamation, Merger, Consolidation and Sale of Assets.....................................91
14.2 Limitations on Debt.....................................................................................93
14.3 Facility B/C Borrower Business..........................................................................94
14.4 Charges.................................................................................................95
14.5 Investments and Restricted Payments.....................................................................95
14.6 Restrictions on Capital Expenditures....................................................................98
14.7 Transactions with Affiliates............................................................................98
14.8 Termination of Pension Plans............................................................................98
14.9 Ownership of Subsidiaries...............................................................................99
14.10 No Restrictions on Distributions........................................................................99
14.11 No Amendments to Note Agreements........................................................................99
14.12 Intellectual Property...................................................................................99
15 EVENTS OF DEFAULT AND REALIZATION..............................................................................99
15.1 Event of Default........................................................................................99
15.2 Remedies...............................................................................................102
15.3 Bankruptcy and Insolvency..............................................................................102
15.4 Application of Proceeds................................................................................103
15.5 Notice.................................................................................................103
15.6 Costs 103
15.7 Relations with the Restricted Group....................................................................103
16 JUDGMENT CURRENCY.............................................................................................104
16.1 Rules of Conversion....................................................................................104
16.2 Determination of an Equivalent Currency................................................................104
17 ASSIGNMENT....................................................................................................105
17.1 Assignment by the Borrowers............................................................................105
17.2 Assignments and Transfers by the Lenders...............................................................105
17.3 Transfer Agreement.....................................................................................105
17.4 Notice.................................................................................................106
17.5 Sub-Commitments........................................................................................106
17.6 General................................................................................................106
18 THE AGENT AND THE LENDERS.....................................................................................107
131
18.1 Authorization of Agent.................................................................................107
18.2 Power of Attorney for Quebec Purposes..................................................................107
18.3 Agent's Responsibility.................................................................................108
18.4 Rights of Agent as Lender..............................................................................109
18.5 Indemnity..............................................................................................109
18.6 Notice by Agent to Lenders.............................................................................109
18.7 Protection of Agent....................................................................................110
18.8 Notice by Lenders to Agent.............................................................................110
18.9 Sharing Among the Lenders..............................................................................111
18.10 Derivative Obligations.................................................................................112
18.11 Procedure with respect to Advances.....................................................................112
18.12 Accounts kept by each Lender...........................................................................113
18.13 Binding Determinations.................................................................................113
18.14 Amendment of Article 18................................................................................113
18.15 Decisions, Amendments and Waivers of the Lenders......................................................113
18.16 Authorized Waivers, Variations and Omissions...........................................................114
18.17 Provisions for the Benefit of Lenders Only.............................................................114
18.18 Resignation of Agent...................................................................................114
18.19 Canadian Agent and US Agent............................................................................115
19 MISCELLANEOUS.................................................................................................115
19.1 Notices................................................................................................115
19.2 Amendment and Waiver...................................................................................115
19.3 Determinations Final...................................................................................116
19.4 Entire Agreement.......................................................................................116
19.5 Indemnification and Compensation.......................................................................116
19.6 Benefit of Agreement...................................................................................116
19.7 Counterparts...........................................................................................117
19.8 Applicable Law.........................................................................................117
19.9 Severability...........................................................................................117
19.10 Further Assurances.....................................................................................117
19.11 Good Faith and Fair Consideration......................................................................117
19.12 Excess Resulting From Exchange Rate Change.............................................................117
19.13 Responsibility of the Lenders..........................................................................118
19.14 Indemnity..............................................................................................118
19.15 Jurisdiction and Service in respect of IPG, LLC and the Borrowers......................................119
19.16 Undertaking and Representation of the Lenders..........................................................119
19.17 Language...............................................................................................119
20 FORMAL DATE...................................................................................................120
20.1 Formal Date............................................................................................120
SCHEDULE "A" - LIST OF LENDERS AND COMMITMENTS
SCHEDULE "B" - NOTICE OF BORROWING AND CERTIFICATE
SCHEDULE "C" - TRANSFER AGREEMENT
SCHEDULE "D" - RESTRICTED SUBSIDIARIES AND INACTIVE SUBSIDIARIES
SCHEDULE "E" - OFFICER'S CERTIFICATE
SCHEDULE "F" - OPINION
SCHEDULE "G" - LITIGATION
SCHEDULE "H" - ERISA DISCLOSURE
SCHEDULE "I" - EXISTING SECURITY
SCHEDULE "J" - UNRESTRICTED SUBSIDIARIES
SCHEDULE "K" - LIST OF FACILITY A BORROWERS
SCHEDULE "L" - LIST OF FACILITY B GUARANTORS
SCHEDULE "M" - EXISTING MATERIAL ADVERSE CHANGES, DEFAULTS AND EVENTS OF DEFAULT
SCHEDULE "N" - LOCATION OF ASSETS AND HEAD OFFICES AND TAX IDENTIFICATION
NUMBERS
SCHEDULE "O" - BORROWING BASE COMPLIANCE CERTIFICATE
SCHEDULE "P" - ENVIRONMENTAL MATTERS
SCHEDULE "Q" - COMPLIANCE CERTIFICATE
SCHEDULE "R" - INVESTMENTS AT NOVEMBER 30, 2001
