Exhibit 5
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IPG HOLDINGS LP
AMENDED AND RESTATED
NOTE AGREEMENT
DATED AS OF DECEMBER 20, 2001
U.S. $25,000,000 SENIOR SECURED NOTES, SERIES A, DUE 2005
U.S. $112,000,000 SENIOR SECURED NOTES, SERIES B, DUE 2009
GUARANTEED BY
INTERTAPE POLYMER GROUP INC.
INTERTAPE POLYMER INC.
INTERTAPE POLYMER CORP.
IPG FINANCE LLC
IPG (US) INC.
AND EACH OF THE OTHER RESTRICTED SUBSIDIARIES
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TABLE OF CONTENTS
PAGE
1. BACKGROUND; AMENDMENT AND RESTATEMENT............................................................1
1.1. Background..............................................................................1
1.2. Authorization of Amendment and Restatement..............................................2
1.3. Amendment and Restatement...............................................................2
1.4. Effective Date..........................................................................3
1.5. Guaranty Agreements.....................................................................3
1.6. Collateral..............................................................................3
1.7. Waiver of Existing Defaults.............................................................4
2. INTEREST; PREPAYMENT OF NOTES....................................................................4
2.1. Interest................................................................................4
2.2. Prepayments.............................................................................5
2.3. Required Prepayments upon Equity Events.................................................6
2.4. Required Prepayments from Excess Cash Flow..............................................7
2.5. Offer to Prepay upon Change in Control..................................................9
2.6. Insurance and Condemnation Proceeds.....................................................10
2.7. Optional Prepayment with Premium........................................................10
2.8. Notice of Certain Optional Prepayments..................................................11
2.9. Application of Prepayments..............................................................11
2.10. Direct Payment..........................................................................11
3. REPRESENTATIONS..................................................................................12
3.1. Representations of the General Partner, the Issuer and the Parent.......................12
3.2. Representations of the Noteholders......................................................12
3.3. Deemed Representations of Transferees of the Notes......................................13
4. CONDITIONS TO THE EFFECTIVENESS OF THE AGREEMENT.................................................14
4.1. General Partner and Issuer Compliance Certificates......................................14
4.2. Parent Closing Certificates; Restricted Subsidiary Certificates.........................14
4.3. Guaranty Agreements.....................................................................15
4.4. Legal Opinions..........................................................................15
4.5. Security Documents; Collateral..........................................................16
4.6. Collateral Matters......................................................................17
4.7. Bank Documents..........................................................................18
4.8. Private Placement Numbers...............................................................18
4.9. Consent to Receive Service of Process...................................................18
4.10. Representations and Warranties..........................................................19
4.11. Total Debt to EBITDA Ratio..............................................................19
4.12. Financial Statements....................................................................19
4.13. Performance; No Default.................................................................19
4.14. Legality................................................................................19
4.15. Satisfactory Proceedings................................................................19
4.16. Payment of Special Counsel Fees and Noteholder Expenses.................................20
4.17. Payment of Certain Fees.................................................................20
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PAGE
5. PARENT, GENERAL PARTNER AND ISSUER COVENANTS.....................................................20
5.1. Corporate or Partnership Existence, Etc.................................................20
5.2. Insurance...............................................................................21
5.3. Taxes; Claims for Labor and Materials; Compliance with Laws.............................24
5.4. Maintenance, Etc........................................................................25
5.5. Nature of Business......................................................................26
5.6. Consolidated Net Worth..................................................................26
5.7. Coverage Ratios.........................................................................26
5.8. Leverage Ratios.........................................................................27
5.9. Additional Limitations on Debt..........................................................29
5.10. Limitation on Liens.....................................................................29
5.11. Permitted Investments and Restricted Payments...........................................31
5.12. Mergers, Consolidations and Sales of Assets.............................................34
5.13. Interest Rate Adjustment Date Fee.......................................................36
5.14. Repurchase of Notes.....................................................................36
5.15. Transactions with Affiliates............................................................37
5.16. Termination of Pension Plans............................................................37
5.17. Designation of Restricted Subsidiaries..................................................37
5.18. Reports and Rights of Inspection........................................................37
5.19. Pari Passu Debt.........................................................................43
5.20. Most Favored Lender.....................................................................43
5.21. Limitation on Business Activities.......................................................44
5.22. Ownership of Subsidiaries...............................................................44
5.23. Limitation on Issuer Debt...............................................................44
5.24. No Restrictions on Distributions........................................................44
5.25. Limitation on Capital Expenditures......................................................44
5.26. Intellectual Property...................................................................45
5.27. No Amendments to Credit Agreement.......................................................45
6. EVENTS OF DEFAULT AND REMEDIES THEREFOR..........................................................46
6.1. Events of Default.......................................................................46
6.2. Notice to Holders.......................................................................48
6.3. Acceleration of Maturities..............................................................48
6.4. Rescission of Acceleration..............................................................49
7. AMENDMENTS, WAIVERS AND CONSENTS.................................................................49
7.1. Consent Required........................................................................49
7.2. Solicitation of Holders.................................................................49
7.3. Effect of Amendment or Waiver...........................................................50
8. INTERPRETATION OF AGREEMENT; DEFINITIONS.........................................................50
8.1. Definitions.............................................................................50
8.2. Accounting Principles...................................................................73
8.3. Directly or Indirectly..................................................................73
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PAGE
9. MISCELLANEOUS....................................................................................74
9.1. Registered Notes........................................................................74
9.2. Exchange of Notes.......................................................................74
9.3. Loss, Theft, Etc. of Notes..............................................................74
9.4. Expenses; Stamp Tax and Other Indemnity.................................................75
9.5. Powers and Rights Not Waived; Remedies Cumulative.......................................76
9.6. Notices.................................................................................76
9.7. Successors and Assigns..................................................................76
9.8. Survival of Covenants and Representations...............................................76
9.9. Severability............................................................................77
9.10. Governing Law...........................................................................77
9.11. Jurisdiction and Service in Respect of Issuer and Parent................................77
9.12. Payments Free and Clear of Taxes........................................................77
9.13. Currency of Payments; Judgments.........................................................78
9.14. Captions................................................................................79
9.15. Power of Attorney for Quebec Purposes...................................................79
9.16. Interest Provisions.....................................................................79
9.17. Language................................................................................80
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Schedules and Exhibits
Schedule I - Information as to Noteholders
Schedule II - Existing Material Adverse Changes and Existing Defaults
Schedule III - Environmental Information
Exhibit A-1 - Form of Senior Secured Note, Series A, due 2005
Exhibit A-2 - Form of Senior Secured Note, Series B, due 2009
Exhibit B-1 - Representations and Warranties of the Issuer and General Partner
Annex A - Litigation
Exhibit B-2 - Representations and Warranties of the Parent
Annex A - Subsidiaries
Annex B - Debt and Long-Term Liens
Annex C - Locations of Assets and Head Offices
Annex D - Real Property
Annex E - Unrestricted and Inactive Subsidiaries
Annex F - Patents and Trademarks
Annex G - Claims, etc. regarding Hazardous Substances
Annex H - Hazardous Substances
Annex I - Litigation
Exhibit 4.1(a) - Form of Officer's Certificate of Issuer
Exhibit 4.1(b)-1 - Form of Secretary's Certificate of General Partner
Exhibit 4.1(b)-2 - Form of Secretary's Certificate of Issuer
Exhibit 4.2(a) - Form of Officer's Certificate of Parent
Exhibit 4.2(b) - Form of Secretary's Certificate of Parent
Exhibit 4.3(a) - Form of Parent Guaranty Agreement
Exhibit 4.3(b) - Form of Subsidiary Guaranty Agreement
Exhibit 4.5(a) - Form of Collateral Trust Indenture
Exhibit 4.5(b) - Form of Security Agreement
Exhibit 4.5(c) - Form of Pledge Agreement
Exhibit 4.5(d) - Form of Intercreditor Agreement
Exhibit 4.6(b) - Form of U.S. Environmental Indemnification Agreement
Exhibit 4.6(c) - Form of Canadian Environmental Indemnification Agreement
iv
IPG HOLDINGS LP
110E Xxxxxx xx Xxxxxx
Xx. Xxxxxxx, Xxxxxx X0X 0X0
Xxxxxx
AMENDED AND RESTATED NOTE AGREEMENT
Re: U.S. $25,000,000 Senior Secured Notes, Series A Due 2005
U.S. $112,000,000 Senior Secured Notes, Series B Due 2009
Guaranteed By
Intertape Polymer Group Inc.
Intertape Polymer Inc.
Intertape Polymer Corp.
IPG Finance LLC
IPG (US) Inc.
and other Restricted Subsidiaries
Dated as of December 20, 2001
To the Noteholders named in Schedule I hereto
which are signatories to this Agreement
Ladies and Gentlemen:
The undersigned, IPG HOLDINGS LP, a limited partnership formed under the
laws of the State of Delaware (the "ISSUER"), INTERTAPE POLYMER INC., a Canadian
corporation and general partner of the Issuer (the "GENERAL PARTNER") and
INTERTAPE POLYMER GROUP INC., a Canadian corporation (the "PARENT" and, together
with the Issuer and the General Partner, the "OBLIGORS"), jointly and severally,
agree with each of the Persons named in Schedule I hereto (collectively, the
"NOTEHOLDERS") as follows:
1. BACKGROUND; AMENDMENT AND RESTATEMENT
1.1. BACKGROUND.
The Issuer issued (a) Twenty-Five Million United States Dollars (U.S.
$25,000,000) in aggregate principal amount of its 7.66% Senior Guaranteed Notes,
Series A, due May 31, 2005 (the "EXISTING SERIES A NOTES") and (b) Xxx Xxxxxxx
Xxxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars (U.S. $112,000,000) in aggregate principal
amount of its 7.81% Senior Guaranteed Notes, Series B, due May 31, 2009 (the
"EXISTING SERIES B NOTES" and, together with the Existing Series A Notes, the
"EXISTING NOTES"), pursuant to those certain separate Note Agreements, each
dated as of July 1, 1999 (collectively, as amended from time to time prior to
the date hereof, the "EXISTING NOTE AGREEMENT"), among it, the General Partner,
the Parent and each of the purchasers named in Schedule I thereto. The Existing
Notes are substantially in the form of Exhibit A-1 and Exhibit A-2, as the case
may be, attached to the Existing Note Agreement. Each
of the Noteholders is as of the Effective Date a holder of the aggregate
principal amount of the Existing Notes indicated opposite its name in Schedule I
hereto. Pursuant to the Existing Note Agreement, among other things, each of the
Parent and IPG (US) Inc. entered into those separate guaranty agreements, each
dated as of July 1, 1999 (collectively, the "EXISTING GUARANTY AGREEMENTS"),
pursuant to which the Parent and IPG (US) Inc. each unconditionally guaranteed
the obligations of the Issuer under the Existing Note Agreement and the Existing
Notes. The Obligors have requested the amendment and restatement, in their
entirety, of the Existing Note Agreement and the Existing Notes as provided for
in this Agreement, and the replacement of the Existing Guaranty Agreements as
contemplated hereby.
1.2. AUTHORIZATION OF AMENDMENT AND RESTATEMENT.
Each of the Obligors hereby authorizes, agrees and consents to the
amendment and restatement in their entirety of the Existing Note Agreement and
the Existing Notes as provided for herein. The Existing Series A Notes, as
amended and restated in the form of Exhibit A-1 to this Agreement, shall be
hereinafter referred to, individually, as a "SERIES A NOTE" and, collectively,
as the "SERIES A NOTES." The Existing Series B Notes, as amended and restated in
the form of Exhibit A-2 to this Agreement, shall be hereinafter referred to,
individually, as a "SERIES B NOTE" and, collectively, as the "SERIES B NOTES."
The Series A Notes and the Series B Notes are herein sometimes collectively
referred to as the "NOTES" and individually referred to as a "NOTE". The term
"Notes" as used herein shall include each Note delivered pursuant to any
provision of this Agreement, and each Note delivered in substitution or exchange
for any such Note. The obligations of the Issuer under the Notes and this
Agreement shall be unconditionally guaranteed by the General Partner, the Parent
and each of the other Restricted Subsidiaries. The Notes shall be secured
pursuant to and entitled to all of the applicable benefits of the Security
Documents.
1.3. AMENDMENT AND RESTATEMENT.
Subject to the satisfaction or waiver of the conditions precedent set
forth in Section 4 of this Agreement on or before December 27, 2001, each
Noteholder, by its execution of this Agreement, hereby agrees and consents to
(a) the amendment and restatement in its entirety of the Existing Note Agreement
by this Agreement and, upon the satisfaction or waiver of such conditions
precedent, the Existing Note Agreement is hereby so amended and restated, (b)
the amendment and restatement in their entirety of the Existing Notes and (c)
the replacement of the Existing Guaranty Agreements, and, upon the satisfaction
or waiver of such conditions precedent, the Existing Notes are hereby amended
and restated in their entirety in the forms attached hereto as Exhibit A-1 and
Exhibit A-2, as the case may be, and the Existing Guaranty Agreements are hereby
terminated and of no further force or effect and replaced with the Parent
Guaranty Agreement and the Subsidiary Guaranty Agreement. Upon the satisfaction
or waiver of such conditions precedent, the Existing Notes shall be, without any
further action required on the part of any other Person, deemed to be
automatically amended and restated to conform to and have the terms provided in
the forms attached hereto as Exhibit A-1 and Exhibit A-2, as the case may be.
Upon the request of any Noteholder, the Issuer shall deliver a Note, as amended
and restated in the form attached hereto as Exhibit A-1 or Exhibit A-2, as the
case may be, against surrender of the related Existing Note.
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1.4. EFFECTIVE DATE.
Subject to the satisfaction or waiver of the conditions set forth in
Section 4 of this Agreement, the closing of the transactions contemplated by
this Agreement will be held on December 27, 2001 (the "EFFECTIVE DATE") at the
offices of Xxxxxx, Xxxxx & Bockius LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
1.5. GUARANTY AGREEMENTS.
The payment by the Issuer of all amounts due with respect to the Notes
and performance of all obligations of the Issuer under this Agreement and the
Collateral Trust Indenture will be unconditionally guaranteed (a) by the Parent
and the General Partner under a guaranty agreement to be dated as of the
Effective Date (as the same may be amended from time to time, the "PARENT
GUARANTY AGREEMENT") from the Parent and the General Partner, and (b) by each of
the other Restricted Subsidiaries under a guaranty agreement to be dated as of
the Effective Date (as the same may be amended from time to time, the
"SUBSIDIARY GUARANTY AGREEMENT") from each of such Restricted Subsidiaries. The
Parent Guaranty Agreement and the Subsidiary Guaranty Agreement are hereafter
referred to collectively as the "GUARANTY AGREEMENTS" and individually as a
"GUARANTY AGREEMENT".
1.6. COLLATERAL.
The Notes and the Guaranty Agreements will be secured pursuant to and
entitled to all of the applicable benefits of the Security Documents. In the
event that at any time after the Effective Date (a) the Parent shall have
maintained an Acceptable Rating at all times during each of its two previous
fiscal quarters in respect of the long-term, senior unsecured Debt of the Issuer
and (b) Total Debt, determined as of the end of each of the four most recently
ended fiscal quarters of the Parent, does not exceed two hundred fifty percent
(250%) of EBITDA for the period of four consecutive fiscal quarters of the
Parent ended at the end of each of such four most recently ended fiscal quarters
of the Parent, the Parent may give written notice to each holder of Notes (which
notice shall include copies of the letters to the Parent from Standard & Poor's
or Moody's evidencing that such Acceptable Rating is in full force and effect
and has been in full force and effect at all times during each of the two
previous fiscal quarters of the Parent immediately preceding the date of such
notice) requesting that the holders of the Notes agree not to direct the U.S.
Collateral Trustee or the Canadian Collateral Trustee to enforce any of the
provisions of the Security Documents, commencing on a date specified in such
notice (the "COLLATERAL SUSPENSION DATE") that is not less than ten (10)
Business Days after the date of such notice. The holders of the Notes agree not
to direct the U.S. Collateral Trustee or the Canadian Collateral Trustee to, and
the holders of the Notes shall not, take any action to enforce or to exercise
any rights or remedies under or in respect of any of the provisions of the
Security Documents for the period commencing on the Collateral Suspension Date
and ending on the earliest date on which the Collateral Suspension Conditions
shall not continue to be satisfied (the "COLLATERAL SUSPENSION PERIOD"),
provided that the holders of the Notes, the U.S. Collateral Trustee and the
Canadian Collateral Trustee shall have received an officer's certificate,
executed by a Senior Officer and dated the Collateral Suspension Date,
specifying that each of the applicable Collateral Suspension Conditions are
satisfied as of such date. If at any time after the Collateral Suspension Date
any of the Collateral Suspension Conditions shall not continue to be
3
satisfied (other than clause (d) in the definition of "Collateral Suspension
Conditions"), the foregoing agreement of the holders of the Notes not to so
direct the U.S. Collateral Trustee or the Canadian Collateral Trustee, and to
not take any such action, shall no longer be in effect and the holders of the
Notes shall be free to so direct the U.S. Collateral Trustee and the Canadian
Collateral Trustee to take any and all permitted actions under any of the
Security Documents and to take any actions permitted to be taken by the
Noteholders thereunder. The provisions of Section 5.10 shall continue to apply
during the Collateral Suspension Period. At any time that there is no Debt
outstanding under the Credit Agreement, and each of the Bank Term Facilities and
Bank Facility A shall have been terminated, if any member of the Restricted
Group enters into a successor revolving credit facility to replace Bank Facility
A which is not secured by any Liens on any property of any member of the
Restricted Group, and the Collateral Suspension Conditions shall continue to be
satisfied at such time, the holders of the Notes shall direct the U.S.
Collateral Trustee and the Canadian Collateral Trustee to fully release the
Liens granted under the Security Documents.
1.7. WAIVER OF EXISTING DEFAULTS.
Subject to the satisfaction or waiver of the conditions precedent set
forth in Section 4 of this Agreement on or before December 27, 2001, each
Noteholder, by its execution of this Agreement, hereby permanently and
irrevocably waives its rights arising out of Defaults and Events of Defaults
described on Schedule II hereto, provided that such waiver shall have no effect
on any Default or Event of Default occurring after the Effective Date arising in
connection with any provisions of this Agreement, including any provisions which
are similar to those giving rise to the Defaults and Events of Default set forth
on Schedule II.
2. INTEREST; PREPAYMENT OF NOTES
2.1. INTEREST.
Interest shall accrue on the unpaid principal balance of the Notes on
the basis of a 360-day year of twelve 30-day months as follows:
(a) Series A Notes. Each Series A Note will bear interest
on the unpaid principal balance thereof at a rate equal to:
(i) prior to the Effective Date, 7.66% per
annum;
(ii) from and after the Effective Date and prior
to May 1, 2002, 9.91% per annum; and
(iii) from and after May 1, 2002, (A) for each
date prior to an Interest Rate Adjustment Date, the lesser of
(x) the highest interest rate allowed by applicable law on the
Series A Notes, and (y) 9.91% per annum plus the Applicable
Adjustment Margin as of such date and (B) for each date on or
after an Interest Rate Adjustment Date, 9.91% per annum.
(b) Series B Notes. Each Series B Note will bear interest
on the unpaid principal balance thereof at a rate equal to:
4
(i) prior to the Effective Date, 7.81% per
annum;
(ii) from and after the Effective Date and prior
to May 1, 2002, 10.06% per annum; and
(iii) from and after May 1, 2002, (A) for each
date prior to an Interest Rate Adjustment Date, the lesser of
(x) the highest interest rate allowed by applicable law on the
Series B Notes, and (y) 10.06% per annum plus the Applicable
Adjustment Margin as of such date and (B) for each date on or
after an Interest Rate Adjustment Date, 10.06% per annum.
Interest on each Series A Note and Series B Note shall be payable, in
arrears, semi-annually on the last day of each May and November in each
year, commencing May 31, 2002, until the full principal amount of such
Note shall have been paid. Interest shall accrue on any overdue
principal (including any overdue prepayment of principal and Make-Whole
Amount, if any), and (to the extent permitted by applicable law) on any
overdue installment of interest on the Notes both before and after
demand and judgment at a rate per annum equal to the Applicable Default
Rate.
2.2. PREPAYMENTS.
(a) Series A Notes. Except as set forth in Section 2.3 through
Section 2.5, or as contemplated by the required offers to prepay with
insurance or condemnation proceeds as set forth in the Intercreditor
Agreement, neither the Issuer nor any Obligor shall be required to make
an offer to prepay the Series A Notes and the Series A Notes are not
subject to prepayment or redemption prior to their expressed maturity
date.
(b) Series B Notes. Subject to the provisions of Section
2.9(b), the Issuer agrees that on May 31 and November 30 in each year,
commencing November 30, 2005 and ending November 30, 2008, both
inclusive, the Issuer will prepay and apply and there shall become due
and payable on the principal indebtedness evidenced by the Series B
Notes, an amount equal to the lesser of (i) U.S. $13,440,000 and (ii)
the principal amount of the Series B Notes then outstanding. The entire
remaining principal amount of the Series B Notes shall become due and
payable on May 31, 2009. No premium shall be payable in connection with
any required prepayment made pursuant to this Section 2.2. Except as
set forth in this Section 2.2, in Section 2.3 through Section 2.5, or
as contemplated by the required offers to prepay with insurance or
condemnation proceeds as set forth in the Intercreditor Agreement,
neither the Issuer nor any Obligor shall be required to make any offer
to prepay the Series B Notes and the Series B Notes are not subject to
prepayment or redemption prior to their expressed maturity date.
(c) Tax Cap. Notwithstanding anything else contained herein or
in any of the other Financing Documents, neither the Issuer nor any
Obligor shall be required to prepay, or offer to prepay, more than
twenty-five percent (25%) of the aggregate principal amount of any Note
of any Series prior to the day following the fifth (5th) anniversary of
the Original Closing Date (in aggregate for all prepayments made in
respect of such Note required under Section 2.2 through Section 2.4 and
prepayments
5
made with insurance or condemnation proceeds as set forth in the
Intercreditor Agreement), except in the circumstances permitted by
clauses 212(1)(b)(vii)(C) to (F) inclusive of the Income Tax Act
(Canada). For the avoidance of doubt, this Section 2.2(c) shall not be
construed to reduce, limit or affect any other payments under this
Agreement or the other Financing Documents.
2.3. REQUIRED PREPAYMENTS UPON EQUITY EVENTS.
(a) Notice of Equity Event. At all times prior to the first
date after which any member of the Restricted Group shall have received
Equity Event Proceeds in respect of Equity Events occurring after the
Effective Date in an aggregate amount equal to at least the outstanding
principal amount under Bank Facility B on such date, other than Equity
Events to the extent arising out of the exercise of employee stock
options in the ordinary course at an exercise price up to an aggregate
maximum amount of $5,000,000 per fiscal year of the Parent, the Issuer
will, on the date of receipt of such Equity Event Proceeds by such
member of the Restricted Group, give written notice of such Equity
Event to each holder of Notes. Subject to the provisions of Section
2.2(c), such notice shall contain and constitute an offer to prepay the
Notes of such holder, at par and without payment of the Make-Whole
Amount, on a date specified in such notice (the "EQUITY EVENT
PREPAYMENT DATE") that is not more than forty-five (45) days after the
date of such notice, in a principal amount equal to the Pro Rata Share
of such holder at such time, multiplied by the Equity Event Payment in
respect of such Equity Event, multiplied by the Tax Percentage Limit in
respect of the amount of such Equity Event Payment at such time. For
the avoidance of doubt, the Equity Event Proceeds received by the
members of the Restricted Group in respect of any Equity Event shall be
subject to the provisions of this Section 2.3 only to the extent that
such Equity Event Proceeds, together with all Equity Event Proceeds
theretofore received by the members of the Restricted Group after the
Effective Date, do not exceed the outstanding principal amount under
Bank Facility B as of the date on which the applicable Equity Event
Proceeds are so received.
(b) Acceptance; Rejection. At any time prior to twenty (20)
days after any holder of Notes shall have received such written offer
pursuant to Section 2.3(a), such holder may accept the offer to prepay
made pursuant to this Section 2.3 by causing a notice of such
acceptance to be delivered to the Issuer. A failure by a holder of
Notes to respond to an offer to prepay made pursuant to this Section
2.3 with a timely notice of acceptance shall be deemed to constitute a
rejection of such offer by such holder. Within three days after the end
of such 20-day period, the Issuer shall offer, in writing, to each
holder of Notes that shall have accepted its offer to prepay made
pursuant to this Section 2.3, to prepay on such Equity Event Prepayment
Date an additional portion of such holder's Notes as provided in
Section 2.3(a) in a principal amount equal to its ratable share (based
upon the ratio of the outstanding principal amount of Notes held by
such holder at such time to the aggregate outstanding principal amount
of Notes held at such time by all holders which have also accepted
their respective offers to prepay made pursuant to this Section 2.3) of
the portion of the Equity Event Payment as to which such offers to
prepay were rejected or deemed rejected, multiplied by the Tax
Percentage Limit in respect of such portion at such time (a "REMNANT
EQUITY EVENT PREPAYMENT"). To accept any Remnant Equity Event
Prepayment under this Section 2.3(b), a holder of
6
Notes shall cause a written notice of such acceptance to be delivered
to the Issuer not later than eight (8) days after the date of receipt
by such holder of such offer of the Remnant Equity Event Prepayment
(it being understood that the failure by a holder to accept such offer
of the Remnant Equity Event Prepayment as provided herein prior to the
end of such eight-day period shall be deemed to constitute a rejection
of said Remnant Equity Event Prepayment, and that any Remnant Equity
Event Prepayment so rejected shall be reoffered, in the same manner,
and subject to the applicable Tax Percentage Limit, pro rata, to any
other holders which have accepted their respective offers of the
applicable Remnant Equity Event Prepayments). If after such Equity
Event Prepayment Date any portion of a Remnant Equity Event Prepayment
has not been accepted, such remaining amount shall be offered to
reduce the Commitment of the Bank Term Facilities.
(c) Prepayment. Each prepayment of Notes pursuant to this
Section 2.3 shall be at a price equal to 100% of the principal amount
being prepaid with respect to such Notes, together with interest on
such principal amount accrued to the Equity Event Prepayment Date, but
without any Make-Whole Amount. The prepayment shall be made on the
Equity Event Prepayment Date.
(d) Officer's Certificate. Each offer and reoffer to prepay
the Notes pursuant to this Section 2.3 shall be accompanied by a
certificate, executed by a Senior Financial Officer and dated the date
of such offer, specifying:
(i) that such offer is made pursuant to this
Section 2.3;
(ii) the Equity Event Prepayment Date;
(iii) the last date upon which the offer or
reoffer can be accepted or rejected, and setting forth the
consequences of failing to provide an acceptance or rejection,
as provided in Section 2.3(b);
(iv) the portion of the principal amount of the
applicable holder's Notes offered to be prepaid, setting
forth the details of such computation;
(v) the interest that would be due on the
portion of such principal amount offered to be prepaid,
accrued to the Equity Event Prepayment Date; and
(vi) in reasonable detail, the nature and date of
the applicable Equity Event.
2.4. REQUIRED PREPAYMENTS FROM EXCESS CASH FLOW.
(a) Offer to Prepay from Excess Cash Flow. On each Excess Cash
Flow Notice Date after March 31, 2002, the Issuer will deliver to each
holder of Notes at such time a written offer to prepay the Notes of
such holder, at par and without payment of the Make-Whole Amount, on
the date specified in such notice, which date shall be no later than
forty-five (45) days after such Excess Cash Flow Notice Date (the
"EXCESS CASH FLOW PREPAYMENT DATE"), in a principal amount equal to the
Pro Rata Share of such
7
holder at such time, multiplied by the Excess Cash Flow Payment with
respect to such Excess Cash Flow Prepayment Date, multiplied by the
Tax Percentage Limit in respect of the amount of such Excess Cash Flow
Payment at such time.
(b) Acceptance; Rejection. At any time prior to twenty (20)
days after any holder of Notes shall have received such written offer
pursuant to Section 2.4(a), such holder may accept the offer to prepay
made pursuant to this Section 2.4 by causing a notice of such
acceptance to be delivered to the Issuer. A failure by a holder of
Notes to respond to an offer to prepay made pursuant to this Section
2.4 with a timely notice of acceptance shall be deemed to constitute a
rejection of such offer by such holder. Within three days after the end
of such 20-day period, the Issuer shall offer, in writing, to each
holder of Notes that shall have accepted its offer to prepay made
pursuant to this Section 2.4, to prepay on the Excess Cash Flow
Prepayment Date an additional portion of such holder's Notes as
provided in Section 2.4(a) in a principal amount equal to its ratable
share (based upon the ratio of the outstanding principal amount of
Notes held by such holder at such time to the aggregate outstanding
principal amount of Notes held at such time by all holders which have
also accepted their respective offers to prepay made pursuant to this
Section 2.4) of the portion of the Excess Cash Flow Payment as to which
such offers to prepay were rejected or deemed rejected, multiplied by
the Tax Percentage Limit in respect of such portion at such time (a
"REMNANT EXCESS CASH FLOW PREPAYMENT"), multiplied by the Tax
Percentage Limit in respect of such amount of such Remnant Excess Cash
Flow Prepayment at such time. To accept any Remnant Excess Cash Flow
Prepayment under this Section 2.4(b), a holder of Notes shall cause a
written notice of such acceptance to be delivered to the Issuer not
later than eight (8) days after the date of receipt by such holder of
such offer of the Remnant Excess Cash Flow Prepayment (it being
understood that the failure by a holder to accept such offer of the
Remnant Excess Cash Flow Prepayment as provided herein prior to the end
of such eight-day period shall be deemed to constitute a rejection of
said Remnant Excess Cash Flow Prepayment). If after the Excess Cash
Flow Prepayment Date any portion of a Remnant Excess Cash Flow
Prepayment has not been accepted, such remaining amount shall be
offered to reduce the Commitment of the Bank Term Facilities.
(c) Prepayment. Each prepayment of Notes pursuant to this
Section 2.4 shall be at a price equal to 100% of the principal amount
being prepaid with respect to such Notes together with interest on such
principal amount accrued to the Excess Cash Flow Prepayment Date, but
without any Make-Whole Amount. The prepayment shall be made on such
Excess Cash Flow Prepayment Date.
(d) Officer's Certificate. Each offer and reoffer to prepay
the Notes pursuant to this Section 2.4 shall be accompanied by a
certificate, executed by a Senior Financial Officer and dated the date
of such offer, specifying:
(i) that such offer is made pursuant to this
Section 2.4;
(ii) the Excess Cash Flow Prepayment Date;
8
(iii) the last date upon which the offer or
reoffer can be accepted or rejected, and setting forth the
consequences of failing to provide an acceptance or rejection,
as provided in Section 2.4(b);
(iv) the portion of the principal amount of the
applicable holder's Notes offered to be prepaid, setting
forth the details of such computation;
(v) the interest that would be due on the
portion of such principal amount offered to be prepaid,
accrued to the Excess Cash Flow Prepayment Date; and
(vi) in reasonable detail, the computation of
Excess Cash Flow in respect of which the Excess Cash Flow
Payment is being calculated.
(e) Bank Facility B. Notwithstanding anything else contained
in this Section 2.4, the Issuer will not be obligated to prepay any
Notes until Five Million United States Dollars (U.S. $5,000,000) in
principal amount of the outstanding loans under Bank Facility B shall
have been repaid pursuant to the provisions of Section 9.2.2 of the
Credit Agreement (as in effect on the date of this Agreement).
2.5. OFFER TO PREPAY UPON CHANGE IN CONTROL.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
(ii) the obtaining of knowledge of a Control
Event by any officer of any Obligor,
then the Issuer will, within 3 Business Days of (x) such Change in
Control or (y) the obtaining of knowledge of such Control Event
(including via the receipt of notice of a Control Event from any holder
of Notes), as the case may be, give written notice of such Change in
Control or Control Event to each holder of Notes. In the event of a
Change in Control, such written notice shall contain and constitute an
offer to prepay all, but not less than all, of the Notes of each Series
held by such holder, at par and without payment of the Make-Whole
Amount, on a date specified in such notice (in respect of such Change
in Control, the "CONTROL PREPAYMENT DATE") that is not less than 30
days and not more than 120 days after the date of such notice. In no
event will any Obligor take any action, or permit any Subsidiary to
take any action, to permit a Change in Control to occur prior to the
Control Prepayment Date. Any payment made pursuant to this Section 2.5
shall not be reduced, limited or affected by the provisions of Section
2.2(c).
(b) Acceptance; Rejection. A holder of Notes may accept or
reject the offer to prepay made pursuant to this Section 2.5 by causing
a notice of such acceptance or rejection to be delivered to the Issuer
not later than 14 days after the date of receipt by such holder of the
written offer of such prepayment. If so accepted, such offered
prepayment shall be due and payable on the Control Prepayment Date. A
failure by a
9
holder of Notes to respond to an offer to prepay made pursuant to this
Section 2.5 shall be deemed to constitute a rejection of such offer by
such holder.
(c) Prepayment. Each prepayment of Notes pursuant to this
Section 2.5 shall be at a price equal to 100% of the principal amount
being prepaid with respect to such Notes, together with interest on
such principal amount accrued to the Control Prepayment Date, but
without any Make-Whole Amount. The prepayment shall be made on the
Control Prepayment Date.
(d) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 2.5 shall be accompanied by a certificate,
executed by a Senior Financial Officer and dated the date of such
offer, specifying:
(i) that such offer is made pursuant to this
Section 2.5;
(ii) the Control Prepayment Date;
(iii) the last date upon which the offer can be
accepted or rejected, and setting forth the consequences of
failing to provide an acceptance or rejection, as provided in
Section 2.5(b);
(iv) the principal amount of each Note offered to
be prepaid;
(v) the interest that would be due on each Note
offered to be prepaid, accrued to the Control Prepayment
Date; and
(vi) in reasonable detail, the nature and date or
proposed date of the Change in Control.
2.6. INSURANCE AND CONDEMNATION PROCEEDS.
Each prepayment of the principal amount of Notes with insurance or
condemnation proceeds made pursuant to the provisions of the Intercreditor
Agreement shall be made at 100% of the principal amount being prepaid together
with interest on such principal amount accrued to the date of prepayment but
without Make-Whole Amount, and shall be subject to the provisions of Section
2.2(c).
2.7. OPTIONAL PREPAYMENT WITH PREMIUM.
Subject to Section 2.9, the Issuer shall have the privilege, at any
time and from time to time, of prepaying the outstanding Notes of both Series,
either in whole or in part (but if in part then in a minimum principal amount of
U.S. $1,000,000 in the aggregate) by payment of the principal amount of the
Notes or portion thereof to be prepaid, and accrued interest thereon to the date
of such prepayment, together with a premium equal to the Make-Whole Amount,
determined as of the date which is three (3) Business Days prior to the date of
such prepayment pursuant to this Section 2.7.
10
2.8. NOTICE OF CERTAIN OPTIONAL PREPAYMENTS.
The Issuer will give notice of any prepayment of the Notes of both
Series pursuant to Section 2.7 to each holder thereof not less than 30 days nor
more than 60 days before the date fixed for such optional prepayment specifying
(a) such date, (b) the principal amount of the holder's Notes to be prepaid on
such date, (c) that a Make-Whole Amount may be payable, (d) the date when such
Make-Whole Amount will be calculated, (e) the estimated Make-Whole Amount, and
(f) the accrued interest applicable to the prepayment as of the prepayment date.
Notice of prepayment having been so given, the aggregate principal amount of the
Notes specified in such notice, together with accrued interest thereon and the
Make-Whole Amount, if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice. Not later than two (2)
Business Days prior to the prepayment date specified in such notice, the Issuer
shall provide each holder of a Note written notice of the Make-Whole Amount, if
any, payable in connection with such prepayment and, whether or not any
Make-Whole Amount is payable, a reasonably detailed computation of the
Make-Whole Amount.
2.9. APPLICATION OF PREPAYMENTS.
(a) In the case of each optional partial prepayment of the
Notes pursuant to Section 2.7, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes of both Series then
outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof. Each optional partial prepayment of
the Series B Notes pursuant to Section 2.7 shall be applied in inverse
order of maturity.
(b) Upon any partial prepayment of the Series B Notes pursuant
to Section 2.3 through Section 2.5 or repurchase of Series B Notes
pursuant to Section 5.14, or any partial prepayment with insurance or
condemnation proceeds as contemplated by the Intercreditor Agreement,
the principal amount of the payment required at maturity of the Series
B Notes and each required prepayment of Series B Notes that becomes due
under Section 2.2(b) on or after the date of such prepayment or
repurchase shall be reduced in the same proportion as the aggregate
unpaid principal amounts of the Series B Notes are reduced as a result
of such prepayment or repurchase.
2.10. DIRECT PAYMENT.
Notwithstanding anything to the contrary contained in this Agreement or
the Notes, in the case of any Note owned by any Noteholder or a nominee of any
Noteholder or owned by any subsequent Institutional Holder which has given
written notice to the Issuer requesting that the provisions of this Section 2.10
shall apply, the Issuer will punctually pay when due the principal thereof,
interest thereon and Make-Whole Amount, if any, due with respect to said
principal, without any presentment thereof, directly to such Noteholder, nominee
or subsequent Institutional Holder at the address set forth in Schedule I hereto
for such Noteholder or nominee or such other address as such Noteholder, nominee
or subsequent Institutional Holder may from time to time designate in writing to
the Issuer or, if a bank account with a United States bank is designated for
such Noteholder or nominee on Schedule I hereto or in any written notice to the
11
Issuer from such Noteholder, nominee or subsequent Institutional Holder, the
Issuer will make such payments in immediately available funds to such bank
account, marked for attention as indicated, or in such other manner or to such
other account in any United States bank as such Noteholder, nominee or
subsequent Institutional Holder may from time to time direct in writing.
3. REPRESENTATIONS
3.1. REPRESENTATIONS OF THE GENERAL PARTNER, THE ISSUER AND THE
PARENT.
(a) The General Partner and the Issuer represent and warrant
that all representations and warranties set forth in Exhibit B-1 are
true and correct as of the date hereof and are incorporated herein by
reference with the same force and effect as though herein set forth in
full.
(b) The Parent represents and warrants that all
representations and warranties set forth in Exhibit B-2 are true and
correct as of the date hereof and are incorporated herein by reference
with the same force and effect as though herein set forth in full.
3.2. REPRESENTATIONS OF THE NOTEHOLDERS.
Each Noteholder represents that, by agreeing to the amendment and
restatement of the Existing Note Agreement and the Existing Notes, it is
specifically understood and agreed that such Noteholder holds the Notes for its
own account or for one or more separate accounts maintained by it or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of property of such
Noteholder or such pension or trust funds shall at all times be within its or
their control. Each Noteholder understands that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Issuer is
not required to register the Notes.
Each Noteholder represents, with respect to the funds with which such
Noteholder paid the purchase price of the Existing Notes purchased by it
(whether upon the original issuance thereof or by transfer from a prior holder
thereof), that at least one of the following statements is an accurate
representation as to each source of such funds (a "SOURCE");
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the National Association of Insurance Commissioners (the "NAIC")
Annual Statement filed with such Noteholder's state of domicile; or
12
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Noteholder has
disclosed to the obligors in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Issuer or the Parent and (ii) the identity of such QPAM and (ii) the
names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Issuer and the Parent in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Issuer and the
Parent in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 3.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
3.3. DEEMED REPRESENTATIONS OF TRANSFEREES OF THE NOTES.
Any transferee of any Note, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 3.2 with respect to the Source of the funds
with which such transferee paid the purchase price of such Note.
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4. CONDITIONS TO THE EFFECTIVENESS OF THE AGREEMENT
The Existing Note Agreement and the Existing Notes shall be amended and
restated in their entirety as provided in Section 1.3 upon the satisfaction or
waiver by each of the Noteholders of each of the following conditions precedent:
4.1. GENERAL PARTNER AND ISSUER COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. Each Noteholder shall have received
a certificate dated the Effective Date, signed by the President or a
Vice President of the General Partner on behalf of the Issuer and as an
authorized officer of the General Partner, substantially in the form
set out in Exhibit 4.1(a), certifying that the conditions specified in
Sections 4.10 and 4.11 have been fulfilled and that no Default or Event
of Default shall have occurred and be continuing on the Effective Date.
(b) Secretary's Certificate. Each Noteholder shall have
received: (i) a certificate signed by the Secretary of the General
Partner on behalf of the Issuer and (ii) a certificate of the Secretary
of the General Partner, each dated the Effective Date, certifying as to
the resolutions attached thereto and other proceedings relating to the
authorization, execution and delivery of the Financing Documents to
which the General Partner and the Issuer, respectively, are parties,
substantially in the forms set out in Exhibit 4.1(b)-1 and Exhibit
4.1(b)-2, respectively.
4.2. PARENT CLOSING CERTIFICATES; RESTRICTED SUBSIDIARY
CERTIFICATES.
(a) Officer's Certificate. Each Noteholder shall have received
a certificate dated the Effective Date, signed by the President or Vice
President, Finance and Administration, of the Parent, substantially in
the form set out in Exhibit 4.2(a), certifying that the conditions
specified in Sections 4.10 and 4.11 have been fulfilled and that no
Default or Event of Default shall have occurred and be continuing on
the Effective Date and confirming that, with the exception of the
Unrestricted Subsidiaries, all of the Parent's Subsidiaries as of the
Effective Date are and shall remain Restricted Subsidiaries during the
term of this Agreement unless such Restricted Subsidiaries are sold,
transferred or dissolved as permitted in accordance with the terms
hereof.
(b) Parent Secretary's Certificate. Each Noteholder shall have
received a certificate signed by the Secretary of the Parent, dated the
Effective Date, certifying as to the resolutions attached thereto and
other proceedings relating to the authorization, execution and delivery
of the Financing Documents to which the Parent is a party,
substantially in the form set out in Exhibit 4.2(b).
(c) Restricted Subsidiary Secretary's Certificate. Each
Noteholder shall have received a certificate signed by the Secretary of
each other Restricted Subsidiary, dated the Effective Date, certifying
as to the resolutions attached thereto and other proceedings relating
to the authorization, execution and delivery of the Financing Documents
to which such Restricted Subsidiary is a party, substantially in the
form set out in Exhibit 4.2(c).
14
4.3. GUARANTY AGREEMENTS.
Each Noteholder shall have received the Parent Guaranty Agreement and
the Subsidiary Guaranty Agreement, each duly authorized, executed and delivered
by the Parent, the General Partner and each of the Restricted Subsidiaries, as
the case may be, substantially in the forms set out in Exhibit 4.3(a) and
Exhibit 4.3(b), respectively, and each of the Guaranty Agreements shall be in
full force and effect.
4.4. LEGAL OPINIONS.
Each Noteholder shall have received opinions, dated the Effective Date,
from
(a) Xxxxxx, Xxxxx & Xxxxxxx LLP, special U.S. counsel for
the Obligors and the Restricted Subsidiaries,
(b) Stikeman, Elliott, Canadian counsel for the Obligors
and the Restricted Subsidiaries,
(c) Xxxxxxx Xxxx LLP, special counsel for the
Noteholders,
(d) Xxxxxxx & Xxxxxxx LLP, counsel for the U.S.
Collateral Trustee,
(e) Xxxxxx, Xxxxx & Bockius LLP, special Florida counsel
for the Restricted Subsidiaries,
(f) Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, LLP, special
South Carolina counsel for the Restricted Subsidiaries,
(g) Xxxxxxx & Xxxxxxx, special Virginia counsel for
certain Restricted Subsidiaries,
(h) Stikeman, Elliott, special Canadian local counsel for
the Obligors and the Restricted Subsidiaries, and
(i) Xxxxxxx XxXxxxxx Stirling Scales, special Canadian
local counsel for the Obligors and certain Restricted Subsidiaries,
each in form and substance satisfactory to such Noteholder covering
such matters pertaining to the transactions contemplated hereunder as such
Noteholder may reasonably request. Each of the Obligors hereby requests and
directs its counsel named in the foregoing clauses (a), (b), (e), (f), (g), (h)
and (i) to deliver such opinions to each of the Noteholders. The Obligors hereby
acknowledge that in acceding to the amendment and restatement of the Existing
Note Agreement and the Existing Notes pursuant hereto, the Noteholders will be
relying on, among other things, the opinions of such counsel for the Obligors
and such Restricted Subsidiaries.
15
4.5. SECURITY DOCUMENTS; COLLATERAL.
(a) Collateral Trust Indenture. Each of the Restricted
Subsidiaries (other than those organized under the laws of Canada or
any jurisdiction in Canada), the Noteholders, the Banks and State
Street Bank and Trust Company shall have executed and delivered a
collateral trust indenture (as amended, supplemented or otherwise
modified from time to time, the "COLLATERAL TRUST INDENTURE"),
substantially in the form of Exhibit 4.5(a).
(b) U.S. Mortgages. Each of the Obligors and the Restricted
Subsidiaries shall have executed and delivered mortgages and deeds of
trust and assignments of leases and rents, as applicable (collectively,
the "U.S. MORTGAGES"), with respect to all real property (other than
Excluded Non-Mortgaged Properties) located in any jurisdiction in the
United States and owned or leased by such Obligor or such Restricted
Subsidiary, in favor of the U.S. Collateral Trustee, securing such
Obligor's or such Restricted Subsidiary's obligations under this
Agreement, the Notes, the Parent Guaranty Agreement or the Subsidiary
Guaranty Agreement, as the case may be, and the obligations of such
Obligor or Restricted Subsidiary in respect of Bank Facility A and the
Bank Term Facilities.
(c) Canadian Mortgages and Security Documents. Each of the
Obligors and the Restricted Subsidiaries that is organized under the
laws of Canada or any jurisdiction in Canada shall have executed and
delivered (i) each of the deeds of hypothec, mortgages, pledge
agreements, general security agreements and other documents related
thereto (collectively, the "CANADIAN MORTGAGES") with respect to all
real and personal property located in any jurisdiction in Canada held
by such Obligor or such Restricted Subsidiary, in favor of the Canadian
Collateral Trustee, securing such Obligor's or such Restricted
Subsidiary's obligations under this Agreement, the Notes, the Parent
Guaranty Agreement or the Subsidiary Guaranty Agreement, as the case
may be, and Bank Facility A and the Bank Term Facilities and (ii) each
of the other agreements and instruments executed or to be executed
pursuant to the terms of the Canadian Mortgages and such other
agreements and instruments, as are required by the Noteholders or the
Canadian Collateral Trustee, in form and substance reasonably
acceptable to the Noteholders (collectively, together with the Canadian
Mortgages, and as amended, supplemented or otherwise modified from time
to time, the "CANADIAN SECURITY DOCUMENTS").
(d) Security Agreement and Pledge Agreement. Each of the
Obligors and the Restricted Subsidiaries (other than any such Person
that is organized under the laws of Canada or any jurisdiction in
Canada) shall have executed and delivered to the U.S. Collateral
Trustee a Security Agreement, substantially in the form of Exhibit
4.5(b) (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT") and a Pledge Agreement, substantially
in the form of Exhibit 4.5(c) (as amended, supplemented or otherwise
modified from time to time, the "PLEDGE AGREEMENT"), each securing the
indebtedness and obligations of such
16
Obligor or Restricted Subsidiary under this Agreement, the Notes, the
Parent Guaranty Agreement or the Subsidiary Guaranty Agreement, as the
case may be, and the obligations of such Obligor or Restricted
Subsidiary in respect of Bank Facility A and the Bank Term Facilities
with a Lien encumbering certain personal property of such Obligors and
Restricted Subsidiaries and the pledge of Equity Interests in and Debt
owed by Restricted Subsidiaries to such Obligor or Restricted
Subsidiary, respectively.
(e) Collateral. The Security Documents shall be in full force
and effect. All actions necessary to perfect the Liens of the U.S.
Collateral Trustee and the Canadian Collateral Trustee in the
Collateral (including, without limitation, the filing of all
appropriate financing statements and the recording of all appropriate
documents with appropriate public officials) shall have been taken in
accordance with the terms and provisions of the Security Documents, to
the extent that such actions are permitted under applicable law. The
Liens of the U.S. Collateral Trustee and the Canadian Collateral
Trustee in the Collateral shall be valid and enforceable and the
Collateral shall be subject to no other Liens, other than Permitted
Liens, Liens to be discharged pursuant to the undertaking contemplated
by Section 4.6(e) and any other Liens acceptable to the Noteholders.
All recording, subscription and other similar fees, and all taxes and
other expenses related to such filings, registrations and recordings
shall have been paid, or caused to be paid, in full by the Obligors to
the extent then required in accordance with the terms of the Security
Documents.
(f) Intercreditor Agreement. The Parent and each of the
Restricted Subsidiaries, the U.S. Collateral Trustee, the Canadian
Collateral Trustee, the U.S. Collateral Agent and the Canadian
Collateral Agent (as each is defined in the Credit Agreement), the
Noteholders and the Banks shall have executed and delivered to each
Noteholder an intercreditor agreement (as amended, supplemented or
otherwise modified from time to time, the "INTERCREDITOR AGREEMENT")
substantially in the form of Exhibit 4.5(d).
4.6. COLLATERAL MATTERS.
(a) Environmental Information. Each of the Obligors shall have
delivered to each Noteholder the information set forth in Schedule III,
which relates to certain environmental matters at certain of the
properties which are the subject of one of the U.S. Mortgages or the
Canadian Mortgages relating to real property (collectively, the
"MORTGAGED PROPERTIES").
(b) Environmental Indemnification. Certain of the Obligors
shall have delivered to each Noteholder, the U.S. Collateral Trustee
and certain other parties, one or more environmental indemnification
agreements (collectively, as amended, supplemented or otherwise
modified from time to time, the "U.S. ENVIRONMENTAL INDEMNIFICATION
AGREEMENT"), substantially in the form of Exhibit 4.6(b). Certain of
the Obligors shall have delivered to each Noteholder and the Canadian
Collateral Trustee one or more environmental indemnification agreements
(collectively, as amended, supplemented or otherwise modified from time
to time, the "CANADIAN ENVIRONMENTAL INDEMNIFICATION AGREEMENT"),
substantially in the form of Exhibit 4.6(c).
17
(c) Casualty Insurance. The U.S. Collateral Trustee and the
Canadian Collateral Trustee, as applicable, shall have received (and
copies shall have been delivered to each Noteholder), with respect to
each of the Mortgaged Properties, the insurance policies required by
Section 5.2; each in form and substance reasonably satisfactory to the
Noteholders and their special counsel.
(d) Title Insurance. The U.S. Collateral Trustee shall have
received (and copies shall have been delivered to each Noteholder),
with respect to each of the Mortgaged Properties that is subject to one
of the U.S. Mortgages, a lenders' title insurance policy issued by
First American Title Insurance Company in such amounts and covering
such matters as may be reasonably requested by the Noteholders, and all
premiums in respect of such lenders' title insurance policies shall
have been paid in full.
(e) Undertaking. Each of the Obligors shall have delivered to
each Noteholder an undertaking in form and in substance satisfactory to
the Noteholders, which undertaking shall relate to, without limitation,
the registration of the Liens granted under the Security Documents
(including any registrations specific to intellectual property),
environmental matters, the discharge of Liens for which no Debt is
outstanding, and the delivery of certain leasehold mortgages, lease
amendments, landlord consents and title commitments.
4.7. BANK DOCUMENTS.
The Obligors shall have entered into the Credit Agreement in form and
substance satisfactory to the Noteholders and their special counsel. The
Obligors shall have delivered to each Noteholder copies of the Credit Agreement
and each of the other agreements and instruments executed in connection
therewith (collectively, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions of this Agreement
and the Intercreditor Agreement, the "BANK DOCUMENTS"), certified as true and
correct by a Responsible Officer.
4.8. PRIVATE PLACEMENT NUMBERS.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the NAIC) shall
have been obtained for each Series of Notes.
4.9. CONSENT TO RECEIVE SERVICE OF PROCESS.
Each Noteholder shall have received, in form and substance satisfactory
to such Noteholder, evidence of the consent of CT Corporation System in New
York, New York to the appointment and designation provided for by Section 9.11
for the period from the Effective Date through July 1, 2009.
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4.10. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the General Partner and the
Issuer and the Parent set forth in Exhibit B-1 and Exhibit B-2, respectively,
shall be correct when made and as of the Effective Date (except in each case
where stated to be made as of an earlier date).
4.11. TOTAL DEBT TO EBITDA RATIO.
The Obligors shall have provided evidence satisfactory to the
Noteholders that on September 30, 2001, the Parent had a ratio of Total Debt to
EBITDA for the period of four fiscal quarters of the Parent ended on such date
not exceeding 5.8:1.
4.12. FINANCIAL STATEMENTS.
Each Noteholder shall have received, in form and substance satisfactory
to such Noteholder, the December 31, 2000 year-end consolidated financial
statements of the Parent and its 4-year financial projections, including
projected financial statements and the Restricted Group's proposed capital
expenditure program.
4.13. PERFORMANCE; NO DEFAULT.
Each Obligor shall have performed and complied in all material respects
with all agreements and conditions contained in the Financing Documents required
to be performed or complied with by it prior to or upon the Effective Date and
after giving effect to this Agreement no Default or Event of Default shall have
occurred and be continuing.
4.14. LEGALITY.
On the Effective Date the amendment and restatement of the Existing
Note Agreement and the Existing Notes, and all other proceedings taken in
connection with the transactions contemplated by this Agreement and the other
Financing Documents, shall (a) be permitted by the laws and regulations of each
jurisdiction to which the Noteholders are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation U, T or X of the Board of
Governors of the Federal Reserve System) and (c) not subject any Noteholder to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by any Noteholder, such Noteholder shall have received an officer's
certificate from the Issuer certifying as to such matters of fact as such
Noteholder may reasonably specify to enable such Noteholder to determine whether
such proceedings are so permitted.
4.15. SATISFACTORY PROCEEDINGS.
All proceedings taken in connection with the transactions contemplated
by this Agreement, and all documents necessary to the consummation thereof,
shall be satisfactory in form and substance to each of the Noteholders and the
special counsel referred to in Section
19
4.4(c), and each such Noteholder and such special counsel shall have received a
copy (executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
4.16. PAYMENT OF SPECIAL COUNSEL FEES AND NOTEHOLDER EXPENSES.
Without limiting the provisions of Section 9.4, the Obligors shall have
paid on or before the Effective Date (a) the reasonable fees, charges and
disbursements of the special counsel to the Noteholders referred to in Section
4.4(c) and the Canadian special counsel to the Noteholders, in each case to the
extent reflected in a statement of such counsel rendered to the Obligors at
least one Business Day prior to the Effective Date and (b) the out-of-pocket
costs and expenses incurred by any Noteholder in connection with the
transactions contemplated hereby, to the extent reflected in a statement of such
Noteholder rendered to the Obligors at least one Business Day prior to the
Effective Date.
4.17. PAYMENT OF CERTAIN FEES.
The Obligors shall have paid to each Noteholder, as consideration for
such Noteholder's consent to the amendment and restatement of the Existing Note
Agreement and the Existing Notes, and the other transactions provided for in the
Financing Documents, a fee in an amount equal to (a) three quarters of one
percent (0.75%) of the principal amount of each Note held by such Noteholder
(the "RESTRUCTURING FEE") plus (b) a Closing Catch-Up Fee in respect of each
Note held by such Noteholder. The Restructuring Fee and the Closing Catch-Up Fee
shall have been paid in immediately available funds to the account of each
Noteholder as specified in Schedule I. As used herein, the term "Closing
Catch-Up Fee" in respect of any Note means an amount equal to the product of (i)
2.25% times (ii) the principal amount of such Note on August 1, 2001, times
(iii) a fraction, the numerator of which is the number of days which shall have
elapsed from (and including) August 1, 2001 to (and not including) the Effective
Date and the denominator of which is 360.
5. PARENT, GENERAL PARTNER AND ISSUER COVENANTS
From and after the Effective Date and continuing so long as any amount
remains unpaid on any Note:
5.1. CORPORATE OR PARTNERSHIP EXISTENCE, ETC.
(a) Legal Existence. The Parent will preserve and keep in full
force and effect, and will cause each Restricted Subsidiary to preserve
and keep in full force and effect, its legal existence and all licenses
and permits necessary to the proper conduct of its business; provided,
however, that the foregoing shall not prevent any transaction permitted
by Section 5.12. The Issuer shall at all times be and remain a Delaware
limited partnership in good standing. Intertape Polymer Inc., a
Canadian corporation (or the Parent or any other Wholly-Owned
Restricted Subsidiary incorporated under the laws of Canada or any
Province thereof or of the United States or any State thereof) shall at
all times be and remain the general partner of the Issuer. The Parent
shall at all times own directly or indirectly 100% of the outstanding
shares of capital stock of the General
20
Partner, free and clear of Liens other than Liens thereon
arising under or permitted by the Security Documents.
(b) Collateral. The Parent will duly obtain and maintain in
effect all licenses, certificates of occupancy, permits, approvals and
authorizations required in connection with the Collateral and the
business and other operations conducted in or on any of the Mortgaged
Properties, except for licenses, certificates, permits, approvals or
authorizations the failure of which to obtain or maintain could not
reasonably be expected to result in a Material Adverse Change.
5.2. INSURANCE.
The Parent will maintain, and will cause each Restricted Subsidiary to
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 holders of the Notes,
acting reasonably.
(a) In General. Notwithstanding anything else contained in
this Section 5.2, the Parent will maintain, and will cause each
Restricted Subsidiary to maintain, at its sole cost and expense, with
respect to each Mortgaged Property owned or leased by such Person, the
following:
(i) General Liability Insurance - Comprehensive
general liability insurance (including, without limitation,
excess and umbrella liability insurance) covering any and all
liability of the insured with respect to or arising out of the
ownership (if applicable), maintenance, use or occupancy of
such Mortgaged Property and all operations incidental thereto
including, but not limited to, structural alterations, new
construction and demolition, and including coverage for those
hazards generally known in the insurance industry as
explosion, collapse and underground property damage, said
insurance to have limits of not less than $1,000,000 combined
single limit per occurrence for bodily injury, personal injury
and property damage liability;
(ii) Building Insurance - Insurance ("BUILDING
INSURANCE") on all buildings, fixtures and improvements
located on and forming a part of such Mortgaged Property
(inclusive of foundations, footings and similar structures
below grade) against all perils generally included within the
classification of "all risks," including fire and earthquake,
in amounts at least equal to the full replacement cost thereof
(with the exception of earthquake and without deduction for
depreciation) as such replacement cost shall be determined
from time to time at the request of the Canadian Collateral
Trustee or the U.S. Collateral Trustee, as applicable, at the
direction of the Majority Noteholders, acting reasonably, by
an expert selected and paid by the Parent or such Restricted
Subsidiary and approved by such Collateral Trustee at the
direction of the Majority Noteholders, provided that the
Parent or such Restricted Subsidiary shall not be required to
select or pay
21
for such an expert more than one time in any period of
thirty-six (36) consecutive calendar months unless (A) an
Event of Default has occurred and is continuing or (B) the
Parent, any Restricted Subsidiary or the Majority
Noteholders have a good faith belief that there has been a
material change in such replacement cost. In addition, the
Building Insurance shall be written in such a manner that,
in the event of loss, the amount of coverage afforded to the
insured shall not be reduced or diminished by reason of the
application of any co-insurance or average clause. Such
insurance shall, during the course of any construction or
repair of any improvements on the premises, be on an All
Risk Builder's Risk 100% Completed Value Form or other form
approved by the Canadian Collateral Trustee or U.S.
Collateral Trustee, as applicable, at the direction of the
Majority Noteholders, acting reasonably;
(iii) Personal Property Insurance - Insurance on
personal property against fire and any peril generally
included within the classification of "extended coverage" in
amounts at least equal to the actual cash value thereof as
such values shall be determined from time to time at the
request of the Canadian Collateral Trustee or the U.S.
Collateral Trustee at the direction of the Majority
Noteholders, acting reasonably;
(iv) Business Interruption Insurance - Rental value
or business interruption insurance (or a combination thereof
as the Canadian Collateral Trustee or the U.S. Collateral
Trustee may require at the direction of the Majority
Noteholders, acting reasonably) on all buildings, fixtures and
improvements located on and forming a part of such Mortgaged
Property (including parking and common areas) against loss by
the perils covered by the Building Insurance in amounts
satisfactory to such Collateral Trustee as directed by the
Majority Noteholders, acting reasonably. Such rental value or
business interruption insurance shall be blanket on all such
buildings, fixtures and improvements (including such parking
and common areas);
(v) Flood Insurance - If such Mortgaged Property or
any part thereof is located in an area which has been
identified by the Secretary of Housing and Urban Development
as a flood hazard area and in which flood insurance has been
made available under the National Flood Insurance Act of 1968
(the "FLOOD ACT"), the Parent or such Restricted Subsidiary
shall keep the buildings, fixtures and improvements located on
and forming a part of such Mortgaged Property (or part
thereof) covered for so long as any Notes are outstanding by
flood insurance up to the maximum limit of coverage available
under the Flood Act but not in excess of 75% of the current
fair market value of such Mortgaged Property (or part thereof)
as determined in good faith by the board of directors of the
Parent; and
(vi) Other Insurance - Such other insurance with
respect to such Mortgaged Property in such amounts and against
such insurable hazards as the Canadian Collateral Trustee or
the U.S. Collateral Trustee from time to time may require as
directed by the Majority Noteholders, acting reasonably.
22
(b) Requirements Regarding Policies. All policies evidencing
the insurance required under Section 5.2(a), including the
comprehensive general liability insurance (the "POLICIES"), shall
(i) provide that coverage shall not be cancelled
until at least 30 days' written notice of such revision,
cancellation or reduction shall have been sent to the Canadian
Collateral Trustee or the U.S. Collateral Trustee, as
applicable;
(ii) in the case of any Mortgaged Property
located in the United States, be issued by insurance companies
which are qualified to do business in the state where such
Mortgaged Property is located and which have a current rating
of A Class XII or better in Best's Insurance Guide; and
(iii) be reasonably satisfactory to the Majority
Noteholders in all other respects.
(c) Requirements Regarding General Liability. The
comprehensive general liability insurance to be maintained by the
Parent or any of the Restricted Subsidiaries pursuant to Section
5.2(a)(i) shall
(i) name the U.S. Collateral Trustee, the
Canadian Collateral Trustee and each holder of Notes from time
to time as additional insureds,
(ii) subject to the limitation of liability
contained in the Policies, apply severally as to the Parent
or such Restricted Subsidiary, as the case may be, and the
U.S. Collateral Trustee and the Canadian Collateral Trustee,
(iii) subject to the limitation of liability
contained in the Policies, cover each applicable Person
referred to in clause (ii) above as insureds in the same
manner as if separate policies had been issued to each such
Person,
(iv) subject to the limitation of liability contained
in the Policies, contain no provisions affecting any rights
which any of such Persons would have as claimants if not so
named as insureds, and
(v) be primary insurance with respect to or arising
out of the ownership (if applicable), maintenance, use or
occupancy of such Mortgaged Property with any other valid and
collectible insurance available to the U.S. Collateral Trustee
or the Canadian Collateral Trustee constituting excess
insurance.
(d) Requirements Regarding Building Insurance. The Building
Insurance required under Section 5.2(a)(ii) shall name the U.S.
Collateral Trustee or the Canadian Collateral Trustee, as applicable,
as an additional insured.
(e) Delivery of Policies. The Parent or the applicable
Restricted Subsidiary will deliver to the U.S. Collateral Trustee or
Canadian Collateral Trustee, as applicable, original Policies or
certified copies of Policies in form reasonably satisfactory to the
23
Majority Noteholders evidencing the insurance which is required under
Section 5.2(a), and the Parent or such Restricted Subsidiary shall, at
the request of such Collateral Trustee at the direction of the Majority
Noteholders, or any holder of Notes, promptly furnish to such
Collateral Trustee or such holder of Notes copies of all renewal
notices and all receipts of paid premiums received by the Parent or
such Restricted Subsidiary. At least thirty (30) days prior to the
expiration date of a required policy, the Parent or such Restricted
Subsidiary shall deliver to the U.S. Collateral Trustee or Canadian
Collateral Trustee, as applicable, a binder for a renewal policy in
form reasonably satisfactory to the Majority Noteholders. If the Parent
or such Restricted Subsidiary has a blanket insurance policy in force
providing coverage for several Mortgaged Properties, the U.S.
Collateral Trustee or Canadian Collateral Trustee, as applicable, will
accept a certificate of such insurance together with a certified copy
of such blanket insurance policy; provided that the certificate sets
forth the types and amounts of insurance coverage, and such types and
amounts are at least equal to the types and amounts required
hereinabove, the original policy of insurance is written by a carrier
or carriers reasonably acceptable to the Majority Noteholders, insures
against the risks set forth hereinabove, cannot be cancelled without
thirty (30) days prior written notice to such Collateral Trustee, is in
amounts satisfactory to such Collateral Trustee, at the direction of
the Majority Noteholders, acting reasonably, and has a replacement cost
endorsement meeting the requirements of Section 5.2(a)(ii).
(f) Assignment of Policy. If a Mortgaged Property is sold at a
foreclosure sale or if the U.S. Collateral Trustee or Canadian
Collateral Trustee, as applicable, shall acquire title to a Mortgaged
Property, such Collateral Trustee shall, as collateral security, have
all of the right, title and interest of the Parent or the applicable
Restricted Subsidiary in and to any insurance policies required under
Section 5.2(a) with respect to such Mortgaged Property and the unearned
premiums thereon and in and to the proceeds payable thereunder to the
extent resulting from any damage to the Mortgaged Property prior to
such sale or acquisition.
(g) Application of Insurance Proceeds. All sums paid under any
insurance policy required in Section 5.2(a)(ii) through Section
5.2(a)(v) shall be paid as set forth in Section 6 of the Intercreditor
Agreement and shall be subject to the provisions of Section 2.2(c)
hereof.
5.3. TAXES; CLAIMS FOR LABOR AND MATERIALS; COMPLIANCE WITH LAWS.
(a) Taxes, Claims for Labor and Materials. Without limiting
any other obligation of the Parent hereunder including, without
limitation, pursuant to Section 5.3(b), the Parent will promptly pay
and discharge, and will cause each Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental charges or
levies imposed upon the Parent or such Subsidiary, respectively, or
upon or in respect of all or any part of the property or business of
the Parent or such Subsidiary, all trade accounts payable in accordance
with usual and customary business terms, and all claims for work, labor
or materials, which if unpaid might become a Lien upon any property of
the Parent or a Subsidiary; provided, however, that the Parent or such
Subsidiary shall not be required to pay any such tax, assessment,
charge, levy, account payable or claim if (a)
24
the validity, applicability or amount thereof is being contested in
good faith by appropriate actions or proceedings which will prevent
the forfeiture or sale of any property of the Parent or such
Subsidiary or any material interference with the use thereof by the
Parent or such Subsidiary, (b) any such Lien will at all times be
subject to the prior and senior Lien of the U.S. Collateral Trustee or
the Canadian Collateral Trustee in such property, as applicable, and
(c) the Parent or such Subsidiary shall set aside on its books,
reserves adequate in accordance with GAAP.
(b) Compliance with Laws. The Parent will promptly comply and
will cause each Subsidiary to comply with all laws, ordinances or
governmental rules and regulations to which it is subject including,
without limitation, the Occupational Safety and Health Act of 1970, as
amended, ERISA and all Environmental Laws, and the Parent will comply
and will cause each Subsidiary to comply with all permits, licenses and
authorizations required by Environmental Laws, except where the
violation of such laws, ordinances, rules, regulations, permits,
licenses and authorizations could not reasonably be expected to result
in a Material Adverse Change or in any Lien other than a Permitted
Lien.
(c) Claims. Subject to the proviso contained in Section
5.3(a), the Parent will, and will cause each of its Restricted
Subsidiaries to, jointly and severally pay and discharge all claims for
which sums have become due and payable that have become a Lien other
than a Permitted Lien on any Mortgaged Property (including, without
limitation, mechanics' liens).
5.4. MAINTENANCE, ETC.
(a) In General. The Parent will maintain, preserve and keep,
and will cause each Restricted Subsidiary to maintain, preserve and
keep, its properties which are used or useful in the conduct of its
business (whether owned in fee or a leasehold interest) in good repair
and working order (subject to ordinary wear and tear) and from time to
time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be
maintained.
(b) Mortgaged Properties. Each of the Obligors
(i) shall keep, or cause to be kept, each
Mortgaged Property in safe and good repair and condition,
ordinary wear and tear excepted;
(ii) shall, upon damage or destruction of any
Mortgaged Property or any part thereof by fire or other
casualty and, subject to the provisions of the Intercreditor
Agreement, restore, repair, replace or rebuild, or cause to be
restored, repaired, replaced or rebuilt, such Mortgaged
Property that is damaged or destroyed to the condition it was
in immediately prior to such damage or destruction, whether or
not any insurance proceeds are available or sufficient for
such purpose; provided that, if all or any substantial portion
of the insurance policy proceeds in respect of any such fire
or other casualty are offered for the repayment of the Notes,
the Bank Term Facilities or Bank Facility A pursuant to
25
the provisions of the Intercreditor Agreement, the Obligors
shall have no obligation to restore, repair, replace or
rebuild the Mortgaged Property that was so damaged or
destroyed by such fire or other casualty; and
(iii) shall not commit, or permit to be committed,
waste or permit impairment or deterioration of any Mortgaged
Property, ordinary wear and tear excepted; and
(iv) shall maintain, or cause to be maintained,
the roofs and structure of each Mortgaged Property in safe,
sound and good repair and condition, ordinary wear and tear
excepted.
5.5. NATURE OF BUSINESS.
The Parent and its Restricted Subsidiaries will continue to carry on
substantially the same type of business currently carried on and activities
which are ancillary, incidental or necessary to the ongoing business of the
Parent and its Restricted Subsidiaries as presently conducted.
5.6. CONSOLIDATED NET WORTH.
The Parent will, at all times, keep and maintain Consolidated Net Worth
at an amount not less than the sum of (a) US$275,000,000 plus (b) an amount
equal to the greater of (i) zero (0) and (ii) 50% of Consolidated Net Income of
the Parent and its Restricted Subsidiaries for the period from October 1, 2001
to the end of the Parent's then most recently ended fiscal quarter plus (c) an
amount equal to the aggregate net proceeds of any issuance after the Effective
Date of equity securities by any member of the Restricted Group to Persons not
members of the Restricted Group.
5.7. COVERAGE RATIOS.
(a) Fixed Charge Coverage The Parent will keep and maintain
the ratio (determined as of the end of each fiscal quarter of the
Parent) of Net Income Available for Fixed Charges to Fixed Charges in
each case 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) at not less than the amount
set forth for the applicable quarter end in the table below:
=============================================================================================
IF SUCH FISCAL QUARTER ENDS: MINIMUM RATIO
=============================================================================================
On or prior to September 30, 2002 1.75:1
---------------------------------------------------------------------------------------------
From December 31, 2002 to March 31, 2003 1.85:1
---------------------------------------------------------------------------------------------
From June 30, 2003 to March 30, 2004 2.00:1
---------------------------------------------------------------------------------------------
From March 31, 2004 to March 30, 2005 2.50:1
---------------------------------------------------------------------------------------------
26
=============================================================================================
IF SUCH FISCAL QUARTER ENDS: MINIMUM RATIO
=============================================================================================
On March 31, 2005 and thereafter 3.00:1
=============================================================================================
(b) Debt Service Coverage. The Parent will not permit, at the
end of each fiscal quarter of the Parent until (but excluding) the
fiscal quarter in which Bank Facility B is fully repaid and cancelled,
the ratio of (i) EBITDA for the period of two consecutive fiscal
quarters of the Parent ended on the calculation date (taken as a single
accounting period) less capital expenditures by members of the
Restricted Group paid in cash during such period, to (ii) the sum total
of Fixed Charges for such period and all scheduled repayments of Debt
for such period, excluding (x) a US $8,000,000 repayment of Debt made
in the fiscal quarter ended June 30, 2001 in respect of an agreement
entered into by the Parent dated as of January 1, 1996 with respect to
the issuance and sale of three series of its senior notes in the
aggregate amount of US $33,000,000, and (y) any prepayments required
during such period under Section 2.3 and Section 2.4 of this Agreement
and the 1998 Note Agreement and the corresponding provisions of the
Credit Agreement (as in effect on the date of this Agreement), to be
less than 1.20 to 1.00. For the purposes of calculations of EBITDA in
this Section 5.7(b), Section 5.8(b) or any other provision of this
Agreement, (A) the consolidated non-recurring expenses incurred by the
Parent and its Restricted Subsidiaries during the fiscal quarter ending
December 31, 2000, (B) the consolidated severance expenses and other
unusual non-recurring expenses accrued or otherwise incurred by the
Parent and its Restricted Subsidiaries during the period commencing on
January 1, 2001 and ending on September 30, 2001 and (C) any charge to
earnings resulting from the re-pricing of stock options as may be
applicable under GAAP, shall all be added (to the extent deducted in
the calculation of Consolidated Net Income) to the EBITDA for the
relevant period (including, without limitation, on a trailing four
quarter or trailing two quarter basis).
5.8. LEVERAGE RATIOS.
(a) Total Debt to Consolidated Total Capitalization. The
Parent will not at any time permit the ratio of Total Debt to
Consolidated Total Capitalization to exceed the ratio applicable to
such time in the table set forth below:
===============================================================================================
IF SUCH TIME IS: THE APPLICABLE RATIO IS:
===============================================================================================
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
-----------------------------------------------------------------------------------------------
27
===============================================================================================
IF SUCH TIME IS: THE APPLICABLE RATIO IS:
===============================================================================================
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 at any time thereafter 0.55:1
===============================================================================================
(b) Total Debt to EBITDA. The Parent will not permit the ratio
of Total Debt as at the end of each fiscal quarter of the Parent to
EBITDA for the period of the four fiscal quarters of the Parent ended
on such date (taken as a single accounting period) to exceed for each
such date prior to June 30, 2002, the ratio applicable to such date in
the table set forth below, and if such date is on or after June 30,
2002, the lesser of (i) the Experience-Based Ratio at such date and
(ii) the ratio applicable to such date in the table set forth below:
==============================================================================================
IF SUCH DATE IS: THE APPLICABLE RATIO IS:
==============================================================================================
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 4.00:1
June 30, 2004
----------------------------------------------------------------------------------------------
On September 30, 2004, December 31, 2004, 3.50:1
March 31, 2005 and June 30, 2005
----------------------------------------------------------------------------------------------
On September 30, 2005 and December 31, 2005 and at any time 3.25:1
thereafter
==============================================================================================
28
As used in this Section 5.8(b), the term "Experience-Based Ratio"
means, as at the last day of any fiscal quarter of the Parent, the greater of
(a) 3.25:1 and (b) the sum of (i) 0.25 plus (ii) the actual ratio of Total Debt
as at the end of the fiscal quarter of the Parent ended on such date to EBITDA
for the period of the four fiscal quarters of the Parent most recently ended on
the last day of such fiscal quarter (taken as a single accounting period).
5.9. ADDITIONAL LIMITATIONS ON DEBT.
(a) The Parent will not, and will not permit any Restricted
Subsidiary to, create, assume or incur or in any manner become liable
in respect of any Debt, except:
(i) Debt of the Restricted Group permitted by
Section 5.8;
(ii) in the case of (x) unsecured Debt of any
Restricted Subsidiary ("SUBSIDIARY PRIORITY DEBT") and (y)
Debt of the Restricted Group secured by Liens not permitted by
clauses (a) through (l) of Section 5.10 ("SECURED PRIORITY
DEBT" and, collectively with the Subsidiary Priority Debt,
"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, (A) the aggregate
principal amount of Priority Debt shall not exceed 20% of
Consolidated Net Worth, if a Collateral Suspension Period is
not then in effect, or (B) 12.5% of Consolidated Net Worth, if
a Collateral Suspension Period is then in effect; provided,
further, that for the purposes of this Agreement and the
Financing Documents, Debt under or in respect of the Bank Term
Facilities, the Notes and the 1998 Notes, and Debt permitted
by Section 5.9(a)(iii), shall not constitute Priority Debt;
and
(iii) Debt of the Parent or a Restricted
Subsidiary owed to the Parent or to a Wholly-Owned Restricted
Subsidiary;
(b) If any member of the Restricted Group incurs additional
Debt other than Debt secured by Liens described in Section 5.10(h),
such Debt shall be subject to terms and conditions no more restrictive
than those contained herein and in the Credit Agreement (as in effect
on the date hereof), excluding terms and conditions relating to
collateral (only in the case of Priority Debt) and pricing.
5.10. LIMITATION ON LIENS.
The Parent will not, and will not permit any Restricted Subsidiary to,
create or incur, or suffer to be incurred or to exist, any Lien on its or their
property or assets, whether now owned or hereafter acquired, or upon any income
or profits therefrom, except for the following Liens (collectively, the
"PERMITTED LIENS"), and only to the extent, after giving effect to such Lien,
that (x) no Material Adverse Change occurs as a result and (y) the aggregate
amount of Priority Debt does not exceed the amount permitted by Section 5.9(b):
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required by
Section 5.3;
29
(b) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Parent or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including but not limited to Liens
in connection with worker's compensation, unemployment insurance and
other like laws, warehousemen's and attorneys' liens and statutory
landlords' liens) and Liens to secure the performance of bids, tenders
or trade contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred in the
ordinary course of business and not in connection with the borrowing of
money; provided in each case, the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Parent and its Restricted Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Parent and its Restricted Subsidiaries;
(e) Liens securing liabilities of a Restricted Subsidiary to
the Parent or to another Wholly-Owned Restricted Subsidiary so long as
such Liens are subordinate and junior in all respects to the Liens
securing the Notes;
(f) Liens on shares of stock of, or other Equity Interests in,
Unrestricted Subsidiaries;
(g) Liens existing as of the Effective Date and reflected in
Annex B to Exhibit B-2 to this Agreement;
(h) Liens incurred after the Effective Date given 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, without
limitation, Liens existing on such fixed assets at the time of
acquisition thereof or at the time of acquisition by the Parent or a
Restricted Subsidiary of any business entity then owning such fixed
assets, whether or not such existing Liens 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 (i) the Lien shall attach solely to
the fixed assets acquired or purchased, (ii) at the time of acquisition
of such fixed assets, the aggregate amount remaining unpaid on all
liabilities secured by Liens on such fixed assets whether or not
assumed by the Parent or a Restricted Subsidiary 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
30
determined in good faith by the Board of Directors of the Parent), and
(iii) all Debt secured by such Liens shall have been incurred within
the other applicable limitations of Section 5.8 and Section 5.9;
(i) Liens incurred in connection with any renewals, extensions
or refundings of any Debt secured by Liens described in clause (g) and
(h) of this Section 5.10, provided that no additional property is
encumbered and there is no increase in the aggregate principal amount
of Debt secured thereby;
(j) subject to the provisions of Section 1.6, Liens on the
Collateral and the Canadian Collateral in favor of the U.S. Collateral
Trustee and the Canadian Collateral Trustee for the benefit of the
holders of the Notes and the 1998 Notes and the Banks that secure
obligations under any of the Financing Documents or the Bank Documents;
(k) subject to the second paragraph of Section 10.3 of the
Credit Agreement (as in effect on the Effective Date), Liens on
property of the members of the Restricted Group primarily constituting
inventory or accounts that secure obligations arising under Bank
Facility A;
(l) Liens on property of the members of the Restricted Group
that secure obligations arising under or in respect of a successor
revolving credit facility after the termination of Bank Facility A, so
long as such facility is on terms reasonably acceptable to the Majority
Noteholders and the Notes are secured with Liens on such property on a
senior or pari passu basis with such facility; and
(m) Liens, in addition to those permitted by clauses (a)
through (l) of this Section 5.10, securing Debt of the Parent or any
Restricted Subsidiary; provided that after giving effect to the
incurrence of all Debt secured by such Liens the Parent is in
compliance with the provisions of Section 5.9.
Nothing in this Section 5.10 shall be deemed to permit any member of the
Restricted Group to cause or permit, or agree or consent to cause or permit in
the future (upon the happening of a contingency or otherwise), any of the
Collateral, whether now owned or hereafter acquired, to be further encumbered by
a Lien except as expressly permitted by this Agreement and the other Financing
Documents and (for so long as the applicable provisions thereof shall be in
effect) the Bank Documents as in effect on the Effective Date. Notwithstanding
anything else contained herein, the Parent 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 Liens on any assets of any member of the
Restricted Group (other than Bank Facility A, Bank Facility B, and Bank Facility
C, or a successor revolving credit facility after the termination of Bank
Facility A that complies with the provisions of clause (l) of this Section
5.10).
5.11. PERMITTED INVESTMENTS AND RESTRICTED PAYMENTS.
(a) The Parent will not, and will not permit any Restricted
Subsidiary to, until such time as Bank Facility B is fully repaid and
cancelled, make any Restricted Payment. The Parent will not, and will
not permit any Restricted Subsidiary to, until such time as Bank
Facility B is fully repaid and cancelled, make any Investment,
including any
31
Investment in an Unrestricted Subsidiary, other than Permitted
Investments, unless after giving effect to such Investment, (i) the
ratio of Total Debt to EBITDA (calculated on a quarterly basis for the
immediately preceding period of four consecutive fiscal quarters
including the fiscal quarter most recently ended) is less than or
equal to 3.25:1 as of the end of each of the two previous fiscal
quarters and each of 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 since the
Effective Date would not exceed 10% of Consolidated Net Worth as of
the end of the then most recently ended fiscal quarter. The amount of
Investments (other than Permitted Investments) as of the Effective
Date is deemed to be $11,176,870. Once Bank Facility B is fully repaid
and cancelled, the Restricted Group shall not make (x) any Investment,
other than Permitted Investments, if, after giving effect thereto, the
aggregate amount of all such Investments of the Restricted Group at
such time (valued as provided below) would exceed 10% of Consolidated
Net Worth as of the end of the then most recently ended fiscal
quarter, or (y) any Restricted Payments, if after giving effect
thereto the aggregate amount of all Restricted Payments made in the
then current fiscal year of the Parent exceeds US$5,000,000.
(b) In addition to and not in limitation of the foregoing
restrictions, the Parent 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.
(c) Furthermore, IPG Finance LLC shall not make any Investment
other than Permitted Investments described in clauses (b), (c) and (d)
of the definition thereof and Permitted Investments in IPG (US) Inc.
and IPG (US) Inc. shall not make any Investment other than Permitted
Investments described in such clauses and Permitted Investments in any
Restricted Subsidiary which shall have granted Liens on its assets in
the manner contemplated by the Security Documents.
(d) The following restrictions shall apply in connection with
any and all payments to Drumheath by any member of the Restricted
Group:
(i) until such time as Bank Facility B has been
repaid in full and the Commitment thereunder cancelled, all
payments to Drumheath must be on account of premiums payable
for the insurance policies issued by Drumheath. After Bank
Facility B has been repaid and the Commitment 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 the Parent;
(ii) 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 and during the
continuance of an Event of Default;
32
(iii) until Bank Facility B has been repaid in full
and the Commitment 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;
(iv) 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;
(v) Drumheath may not carry on any new line of
business, not currently conducted by Drumheath as of the
Effective Date other than, subject to Section 5.11(d)(iii) or
an insurance business, as defined under applicable Law;
(vi) 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 and during the continuance of an
Event of Default, at the request of the Majority Noteholders,
the members of the Restricted Group 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 holders of the Notes, subject to their
Pro Rata Share; and
(vii) each of the Obligors 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 Section 5.11(a), 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 Section 5.11(a) have not been met. All payments to Drumheath shall
be deemed "Investments" for the purposes of Section 5.11(a).
(e) In addition to the foregoing restrictions, the Parent will
not make any Restricted Payment or any Investment, other than Permitted
Investments, if, at the time thereof or after giving effect thereto,
any Default or Event of Default shall have occurred and be continuing.
(f) The Parent will not declare any dividend which constitutes
a Restricted Payment payable more than 60 days after the date of
declaration thereof.
33
(g) For the purposes of this Section 5.11, 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 the Parent) of
such property at the time of the making of the Restricted Payment in
question.
(h) In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.11, 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.
(i) For purposes of this Section 5.11, 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.
5.12. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS.
(a) The Parent will not, and will not permit any Restricted
Subsidiary to, (i) consolidate or amalgamate with or be a party to a
merger with any other corporation or (ii) sell, lease or otherwise
dispose of all or any substantial part (as defined in clause (d) of
this Section 5.12) of Consolidated Assets; provided, however, that:
(i) any Restricted Subsidiary may merge or amalgamate
or consolidate with or into the Parent or any Wholly-Owned
Restricted Subsidiary so long as (A) in any such transaction
involving the Issuer, the Issuer shall be the surviving or
continuing limited partnership or corporation and (B) in any
such transaction involving the Parent, the Parent shall be the
surviving or continuing entity, provided that such successor
entity shall be a solvent limited partnership, corporation or
other business entity organized and existing under the laws of
the United States of America, any state thereof or the
District of Columbia, Canada or any province thereof, and, at
the time of any such amalgamation, consolidation or merger
described in this Section 5.12(a), and after giving effect
thereto, no Default or Event of Default shall have occurred
and be continuing;
(ii) the Parent may consolidate or amalgamate or
merge with any other corporation (which is not a Restricted
Subsidiary) if, at the time of any such amalgamation,
consolidation or merger described in this Section 5.12(a) and
after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing, and
(A) the surviving or continuing corporation
shall be the Parent, or
(B) if the successor entity is not the
Parent, then such successor entity (x) shall have
executed and delivered to each holder of the Notes,
the U.S. Collateral Trustee and the Canadian
Collateral Trustee its assumption of the due and
punctual performance of each covenant and condition
of this Agreement, the Parent Guaranty Agreement and
each of
34
the other Financing Documents to which the
Parent is a party (pursuant to such agreements and
instruments as shall be reasonably satisfactory to
the Majority Noteholders), and the successor entity
shall have caused to be delivered to each holder of
the Notes an opinion of nationally recognized
independent counsel, or other independent counsel
reasonably satisfactory to the Majority Noteholders,
to the effect that all agreements or instruments
effecting such assumption are enforceable in
accordance with their terms and comply with the terms
hereof, and (y) shall be a solvent corporation
organized and existing under the laws of the United
States of America, any state thereof or the District
of Columbia or under the laws of Canada or any
province thereof; and
(iii) any Restricted Subsidiary (including the
Issuer) may sell, lease or otherwise dispose of all or any
substantial part of its assets to the Parent and any
Restricted Subsidiary (except the Issuer) may sell, lease or
otherwise dispose of all or any substantial part of its assets
to any Wholly-Owned Restricted Subsidiary (including the
Issuer);
so long as in each such case all Liens in favor of the U.S. Collateral
Trustee and the Canadian Collateral Trustee are not adversely affected
and none of the Persons granting such Liens changes its name without at
least 20 Business Days prior written notice to the U.S. Collateral
Trustee and the Canadian Collateral Trustee. Notwithstanding the
foregoing, no member of the Restricted Group shall become party to any
receivables securitization program.
(b) The Parent will not permit any Restricted Subsidiary to
issue or sell any shares of stock of any class (including as "stock"
for the purposes of this Section 5.12, any warrants, rights or options
to purchase or otherwise acquire stock or other Securities exchangeable
for or convertible into any Equity Interests) of such Restricted
Subsidiary to any Person other than the Parent or a Wholly-Owned
Restricted Subsidiary, except for the purpose of qualifying directors,
or (in the case of a Restricted Subsidiary other than the Issuer)
except in satisfaction of the validly preexisting preemptive rights of
minority shareholders in connection with the simultaneous issuance of
stock to the Parent and/or a Restricted Subsidiary whereby the Parent
and/or such Restricted Subsidiary maintain their same proportionate
interest in such Restricted Subsidiary.
(c) The Parent will not sell, transfer or otherwise dispose of
any shares of stock of any class of any Restricted Subsidiary (except
to the Parent or a Wholly-Owned Restricted Subsidiary, so long as the
Liens granted under the Security Documents are not adversely affected,
or for the purpose of qualifying directors) unless:
(i) simultaneously with such sale, transfer, or
disposition, all shares of stock of such Restricted Subsidiary
at the time owned by the Parent and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as an
entirety; and
35
(ii) such sale or other disposition does not
involve a substantial part (as hereinafter defined) of the
assets of the Parent and its Restricted Subsidiaries;
provided, however, that nothing in this Section 5.12(c) or Section
5.12(d) shall permit any disposition by the Parent of any of the Equity
Interests in any of the Obligors, the disposition by the Issuer of the
shares of Canco, any disposition of Equity Interests in IPG Finance LLC
by Canco, or any disposition of the shares of IPG (US) Holdings Inc. or
IPG (US) Inc.
(d) As used in this Section 5.12, a sale, lease or other
disposition of assets (including Securities) (a "TRANSFER") 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 Transferred by the Parent and its Restricted Subsidiaries
(other than in the ordinary course of business) during the 365 day
period ending with the date of such Transfer, 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
Transfer shall not be included if and to the extent the net proceeds
thereof are segregated from the general accounts of the Parent and any
Restricted Subsidiary, invested in Available Cash until applied in
accordance with clause (x) or (y) below, and within six months after
such Transfer are used either (x) to acquire Like Assets, or (y)
offered to prepay the Secured Obligations in the manner provided in
Section 8.2 of the Intercreditor Agreement; provided, however, that any
payment to the holders of the Notes pursuant to Section 8.2 of the
Intercreditor Agreement shall not be subject to the provisions of
Section 2.2(c) and shall be paid to the holders of the Notes in
accordance with Section 2.7.
Notwithstanding anything else contained herein, except as expressly permitted in
this Agreement and the other Financing Documents, none of the Collateral may be
sold, transferred, conveyed or pledged. If the encumbering as contemplated by
Section 5.10 or sale, transfer, conveyance or pledge of any of the Collateral
shall be permitted by one Financing Document and prohibited by another Financing
Document, such encumbering, sale, transfer, conveyance or pledge shall be deemed
prohibited hereunder.
5.13. INTEREST RATE ADJUSTMENT DATE FEE.
In the event that no Interest Rate Adjustment Date has occurred before
May 1, 2002, the Issuer shall, on May 1, 2002, pay to each holder of Notes a fee
in an amount equal to one-half of one percent (0.5%) of the outstanding
principal amount of such holder's Notes on such date.
5.14. REPURCHASE OF NOTES.
None of the Parent, the Issuer, any Subsidiary or any Affiliate,
directly or indirectly, may repurchase or make any offer to repurchase any Notes
unless an offer has been made to repurchase Notes, pro rata ,from all holders of
the Notes at the same time and upon the same terms. Notes repurchased by the
Parent or any Subsidiary or Affiliate shall be cancelled.
36
5.15. TRANSACTIONS WITH AFFILIATES.
The Parent will not, and will not permit any Restricted Subsidiary to,
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 the
Parent's or such Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Parent or such Restricted Subsidiary than would
obtain in a comparable arm's-length transaction with a Person other than an
Affiliate.
5.16. TERMINATION OF PENSION PLANS.
(a) The Parent will not and will not permit any ERISA
Affiliate to withdraw from any Multiemployer Plan or permit any Plan to
be terminated if such withdrawal or termination could result in
withdrawal liability (as described in Part I of Subtitle E of Title IV
of ERISA) payable by any member of the Restricted Group, or the
imposition of a Lien on any property of the Parent or any Subsidiary
pursuant to Section 4068 of ERISA, in an amount in excess of
$3,500,000.
(b) The Parent will and will cause each Subsidiary to maintain
each Foreign Pension Plan in accordance with the terms and provisions
thereof and the requirements of applicable laws, rules and regulations
except to the extent the failure to so maintain any such Foreign
Pension Plan could not reasonably be expected to result in a Lien on
any assets of the Parent or any of its Restricted Subsidiaries or
materially adversely affect (i) the Parent, the Issuer or the Parent
and its Restricted Subsidiaries taken as a whole or (ii) the
performance by the Parent, the Issuer or any Restricted Subsidiary of
its obligations under this Agreement, the Notes or any of the other
Financing Documents.
5.17. DESIGNATION OF RESTRICTED SUBSIDIARIES.
The Parent may designate any Subsidiary which meets the other
requirements of a Restricted Subsidiary as provided in the definition thereof as
a Restricted Subsidiary by giving written notice to each holder of Notes that
the Board of Directors of the Parent has made such designation, provided that no
Subsidiary may be designated a Restricted Subsidiary unless, at the time of such
designation and after giving effect thereto, (a) no Default or Event of Default
shall have occurred and be continuing, and (b) such Subsidiary is also being
designated as a "Restricted Subsidiary" under the Credit Agreement. Such
designation may not be revoked by the Board of Directors of the Parent; and no
Restricted Subsidiary shall at any time be designated an Unrestricted Subsidiary
and, once so designated as a Restricted Subsidiary, will at all times remain a
Restricted Subsidiary. No Unrestricted Subsidiary may own any shares of a
Restricted Subsidiary.
5.18. REPORTS AND RIGHTS OF INSPECTION.
The Parent will keep, and will cause each Restricted Subsidiary to
keep, proper books of record and account in which full and correct entries will
be made of all dealings or transactions of, or in relation to, the business and
affairs of the Parent or such Restricted Subsidiary, in accordance with GAAP
consistently applied (except for changes disclosed in the financial
37
statements furnished to the holders of Notes pursuant to this Section 5.18 and
concurred in by the independent public accountants referred to in Section
5.18(b) hereof), and will furnish each holder of the then outstanding Notes (in
duplicate if so specified below or otherwise requested) (and the U.S. Collateral
Trustee or the Canadian Collateral Trustee, if so required by this Section
5.18):
(a) Quarterly Statements. As soon as available and in any
event within 60 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(i) 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 the four
fiscal quarters of the Parent ending with such quarterly
fiscal period, Adjusted Consolidated, balance sheets of the
Parent and each other member of the Restricted Group, as of
the close of such quarterly fiscal period, setting forth in
comparative form the consolidated (or Adjusted Consolidated,
if applicable) figures for the corresponding period of the
fiscal year then most recently ended,
(ii) 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 the
four fiscal quarters of the Parent ending with such quarterly
fiscal period, Adjusted Consolidated, statements of earnings
and changes in financial position of the Parent and each other
member of the Restricted Group, for such quarterly fiscal
period and for the portion of the fiscal year ending with such
quarterly fiscal period, in each case setting forth in
comparative form the consolidated (or Adjusted Consolidated,
if applicable) figures for the corresponding periods of the
preceding fiscal year, and
(iii) the Parent's calculation of Excess Cash Flow
for such quarterly fiscal period (if required by Section 2.4
for any period ending on the last day of such quarter),
setting forth in comparative form the consolidated figures for
the corresponding period of the preceding fiscal year, all in
reasonable detail and certified as complete and correct by an
authorized financial officer of the Parent;
(b) Annual Statements. As soon as available and in any event
within 120 days after the close of each fiscal year of the Parent,
copies of:
(i) consolidated and consolidating and, in the event
that the total EBITDA of the Unrestricted Subsidiaries is in
the aggregate greater than 5% of EBITDA for such fiscal year,
Adjusted Consolidated, balance sheets of the Parent and its
Restricted Subsidiaries as of the close of such fiscal year,
and
(ii) consolidated and consolidating and, in the event
that the total EBITDA of the Unrestricted Subsidiaries is in
the aggregate greater than 5% of EBITDA for such year,
Adjusted Consolidated, statements of earnings and changes in
financial position of the Parent and its Restricted
Subsidiaries for such
38
fiscal year, along with the Parent's calculation of Excess
Cash Flow for the last fiscal quarter in such fiscal year
(if required by Section 2.4 for such fiscal year), in each
case setting forth in comparative form the consolidated (or
Adjusted Consolidated, if applicable) and consolidating
figures for the preceding fiscal year, all in reasonable
detail and, with regard to the consolidated figures,
certified without qualification by a reputable firm of
independent chartered accountants acceptable to the
Noteholders, together with any audited financial statements
of any Restricted Subsidiary which may be prepared in
respect of such fiscal year or any portion thereof;
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Parent or any Restricted Subsidiary;
(d) Governmental And Other Reports. Promptly upon their
becoming available, one copy of each financial statement, report,
notice or proxy statement sent by the Parent to stockholders generally
and of each regular or periodic report, registration statement or
prospectus filed by the Parent or any Subsidiary with any securities
exchange or any governmental regulatory body including, but without
limitation, the Parent's Form 20F and unaudited quarterly reports, and
copies of any orders in any proceedings to which the Parent or any of
its Subsidiaries is a party, issued by any governmental agency having
jurisdiction over the Parent or any of its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (i) a Reportable Event with respect to any Plan; (ii)
the institution of any steps by the Parent, any ERISA Affiliate, the
PBGC or any other person to terminate any Plan; (iii) the institution
of any steps by the Parent or any ERISA Affiliate to withdraw from any
Plan; (iv) a non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA in connection with any Plan; (v) any material
increase in the contingent liability of the Parent or any Subsidiary
with respect to any post-retirement welfare liability; (vi) the taking
of any action by, or the threatening of the taking of any action by,
the Internal Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing; or (vii) any event or circumstance
with respect to any Foreign Pension Plan which could reasonably be
expected to materially adversely affect the Parent, the Issuer or the
Parent and its Restricted Subsidiaries on a consolidated basis or the
performance by the Parent or the Issuer hereunder or under the Notes or
the Parent Guaranty Agreement;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Parent stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information and
computations (in sufficient detail) required in order to establish
whether the Parent was in compliance with the requirements of Section
5.6 through Section 5.12, Section 5.23 and Section 5.25 at the end of
the period covered by the financial statements then being furnished and
setting forth the ratio of Total Debt to EBITDA for purposes of Section
5.8(b) and as otherwise may be required by this Agreement, (ii) whether
there existed as of the date of such financial statements and whether,
to the best of such
39
officer's knowledge, there exists on the date of the certificate or
existed at any time during the period covered by such financial
statements any Default or Event of Default (including, without
limitation, with respect to Section 5.2) and, if any such condition or
event exists on the date of the certificate, specifying the nature and
period of existence thereof and the action the Parent is taking and
proposes to take with respect thereto and (iii) any material
differences between United States generally accepted accounting
principles and GAAP to the extent reasonably relevant to determining
compliance with the requirements of Section 5.6 through Section 5.13
hereof;
(g) Accountant's Certificates. Within the period provided in
clause (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that as of
the date of the fiscal year end, and for that year, with respect to
which such accountants have given their report pursuant to Section
5.18(b), the Parent was in compliance with the provisions of Sections
5.6, 5.7 and 5.8 and that, in the normal course of their audit (without
special or additional investigation), they have not become aware of a
Default or Event of Default under the provisions of Sections 5.9,
5.10(m), 5.11 or 5.12 (but only to the extent relative to the sale of a
substantial part of Consolidated Assets thereunder);
(h) Annual Financial Forecasts. Within 60 days following the
end of each fiscal year of the Parent, the annual consolidated pre-tax
operating forecast of the Parent, including balance sheet and
statements of income, retained earnings and cash flow, and the
consolidated capital expenditures budget of the Parent, in each case
for the next fiscal year and each quarterly period in such fiscal year;
(i) Pro Forma Acquisition Projections. Promptly, and in any
event not less than 15 Business Days prior to, the consummation of any
proposed Acquisition for consideration in the amount of at least
$2,500,000:
(i) notice of such Acquisition, material information
with respect to the nature thereof, and the proposed purchase
price with respect thereto;
(ii) such historical audited and unaudited financial
statements of the business to be acquired in such Acquisition
(the "TARGET") as the Target has made available to any member
of the Restricted Group and any financial statements contained
in any other information that has been reviewed and confirmed
by a nationally recognized accounting firm of the United
States or Canada or that has been submitted to and approved by
the Parent'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 such Acquisition, showing the projected impact of
such Acquisition both for the current fiscal year and the
immediately succeeding fiscal year;
40
(iv) a written confirmation of a Senior Financial
Officer that the Parent 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 holders of the Notes in the materials
provided in connection with the Acquisition or otherwise in
writing; and
(v) a certificate of a Senior Financial Officer that,
on a consolidated basis following such Acquisition, as of the
date of such Acquisition, after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing;
(j) Environmental Reports. (i) Within 10 days following the
end of each fiscal quarter of the Parent, copies of each environmental
report submitted to the board of directors of the Parent during such
fiscal quarter, and, (ii) to the Collateral Trustees, 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 Mortgaged Properties
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 Mortgaged Properties 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 Mortgaged Properties or any
real property adjoining or in the vicinity of any Mortgaged Property
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 Noteholders, acting
reasonably, with respect to any of the matters described in clause (ii)
of this Section 5.18(j);
(k) Additional Undertakings. (i) Prior to June 30, 2002, at
the expense of the Parent, an accounts receivable and inventory audit
of its Restricted Subsidiaries, which audit shall have been performed
by an independent third party acceptable to the Banks, and (ii) in the
event the ratio of Total Debt as at June 30, 2002 to EBITDA for the
period of four fiscal quarters of the Parent ended on such date is not
less than or equal to 5.0:1, an appraisal of the Restricted
Subsidiaries' equipment and inventory, such appraisal to be performed
by an independent third party acceptable to the Majority Noteholders;
and
(l) Requested Information. With reasonable promptness, such
other data and information as any holder of Notes, the U.S. Collateral
Trustee or the Canadian Collateral Trustee may reasonably request.
41
Without limiting the foregoing, the Parent will permit each holder of the then
outstanding Notes (or such Persons as any such holder may designate), to visit
and inspect, under the Parent's guidance, any of the properties of the Parent or
any Restricted Subsidiary, to examine all of their books of account, records,
reports and other papers, to make copies and extracts therefrom and to discuss
their respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the Parent
authorizes said accountants to discuss with such holders the finances and
affairs of the Parent and its Restricted Subsidiaries) all at such reasonable
times and as often as may be reasonably requested. The Parent shall not be
required to pay or reimburse any holder of Notes for any expenses which such
holder may incur in connection with any such visitation or inspection, except
that if such visitation or inspection is made during any period when a Default
or an Event of Default shall have occurred and be continuing, the Parent agrees
to reimburse such holder for all reasonable expenses thereof promptly upon
demand.
Each Noteholder agrees that it will use all reasonable efforts to keep
confidential any information from time to time supplied to it by or on behalf of
the Parent (including, without limitation, any such information provided
pursuant to this Section 5.18) which the Parent or any Person acting on its
behalf designates in writing at the time of its delivery to such Noteholder, or
as promptly as practicable thereafter, is to be treated as confidential,
provided, however, that the foregoing provisions of this paragraph shall not
apply:
(i) to any information already known to such
Noteholder at the time of its receipt thereof (other than any
such information which to such Noteholder's knowledge is
already known to such Noteholder by virtue of any breach by
any third party of any confidentiality obligation owed to the
Parent or any Restricted Subsidiary);
(ii) to any information which is or becomes public
knowledge other than (to such Noteholder's knowledge) by
reason of any breach of this paragraph;
(iii) to the extent that such Noteholder is required
to disclose the information in question pursuant to any law,
statute, rule or regulation or any order of any court or
judicial process or pursuant to any direction, request or
requirement (whether or not having the force of law but, if
not having the force of law, being of a type with which
Institutional Holders in the relevant jurisdiction are
accustomed to comply) of any self-regulating organization or
any governmental, fiscal, monetary or other authority;
(iv) to the disclosure of any such information to any
regulators or auditors including the NAIC or any successor
agency;
(v) to the disclosure of any such information to any
other holder of a Note;
(vi) to the disclosure of any information to such
Noteholder's counsel or accountants or those of any other
holder of a Note;
42
(vii) to the disclosure of any information to any of
such Noteholder's employees, agents or other professional
advisors or those of any other holder of a Note;
(viii) to the disclosure of any information to
Moody's, Standard & Poor's or any other nationally recognized
rating agency;
(ix) to the extent that such Noteholder needs to
disclose the information in question for the protection or
enforcement of any of such Noteholder's rights or interests
against the Issuer or the Parent, whether under this Agreement
or otherwise; or
(x) to the prospective transferee in connection with
any contemplated transfer of any of the Notes (or of any other
security of the Parent owned by such Noteholder or any Person
advised by such Noteholder's investment advisor or any of its
subsidiaries) by such Noteholder, provided that such
prospective transferee shall agree (in writing) to be bound by
the confidentiality provisions of this Section 5.18 as if it
were a holder of Notes hereunder.
5.19. PARI PASSU DEBT.
Except as otherwise provided in this Agreement and the Intercreditor
Agreement, the Notes shall rank, at all times, at least pari passu with all of
the other senior secured Indebtedness of the Restricted Group, other than as
permitted by Section 5.9(a)(ii) and subject to Permitted Liens. The Parent shall
at all times cause any Debt owing by any member of the Restricted Group to any
other member of the Restricted Group, and all Liens securing such Debt, to be
subordinated to the Notes and the Liens securing the Notes, each in form and
substance satisfactory to the Majority Noteholders (and the Noteholders hereby
acknowledge that the manner in which such Debt has been subordinated in the
notes subject to the pledge agreements dated as of the Effective Date is
satisfactory to them).
5.20. MOST FAVORED LENDER.
The holders of the Notes shall immediately be notified of the terms and
conditions of any Debt of the nature described in clause (a) of the definition
thereof to be created by any member of the Restricted Group other than Debt
secured by Liens described in Section 5.10(h). The holders of the Notes shall
have the option to require the Obligors and the Restricted Subsidiaries to amend
this Agreement and any of the other Financing Documents to incorporate the
provisions of any agreement relating to such Debt if such holders so wish, it
being understood that the provisions which may be so incorporated shall not
extend to the provision of collateral (other than collateral provided (a) under
a replacement revolving credit facility after the termination of Bank Facility A
or (b) to secure Priority Debt or Debt secured by Liens permitted by Section
5.10(h)) or to pricing.
43
5.21. LIMITATION ON BUSINESS ACTIVITIES.
The Issuer shall not, and shall not permit IPG Finance LLC or Canco, to
carry on any business, other than (i) taking such steps as may be necessary to
maintain its existence, (ii) to hold Securities of Restricted Subsidiaries,
(iii) taking such action as is required under or in respect of this Agreement,
any of the other Financing Documents or the Bank Documents, (iv) provided no
Default or Event of Default shall have occurred and be continuing, IPG Finance
LLC may lend money to IPG (US) Inc. and (v) the incurrence of any other
Indebtedness permitted by Section 5.23 and, with respect to the Issuer,
Indebtedness permitted hereunder.
5.22. OWNERSHIP OF SUBSIDIARIES.
The Parent shall not permit, at any time, IPG Finance LLC, the Issuer,
Canco, Intertape Polymer Corp, IPI and (prior to the termination of Bank
Facility A) all Restricted Subsidiaries who are borrowers under Bank Facility A
to be other than Wholly-Owned Restricted Subsidiaries, or at any time to 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 the Parent
with a direct or indirect economic interest of not less than 80% of each such
other Restricted Subsidiary.
5.23. LIMITATION ON ISSUER DEBT.
The Parent will not permit either IPG Finance LLC or Canco to incur or
have at any time any Indebtedness in excess of an aggregate amount of
US$100,000, except for Indebtedness under or with respect to this Agreement, the
1998 Note Agreement, the Bank Documents and any facility which replaces Bank
Facility A after the termination thereof, and except to a Wholly-Owned
Restricted Subsidiary.
5.24. NO RESTRICTIONS ON DISTRIBUTIONS.
The Parent shall not, and shall not permit any of its Restricted
Subsidiaries to, restrict in any way the ability of any Restricted Subsidiary to
declare or make any payment contemplated in clauses (a), (b) and (c) of the
definition of "Restricted Payment" to its shareholder(s) or owners of its other
Equity Interests, except for such restrictions arising under applicable law in
relation to the solvency of the Restricted Subsidiaries.
5.25. LIMITATION ON CAPITAL EXPENDITURES.
(a) The Parent will not, and will not permit any Restricted
Subsidiary to, until such time as Bank Facility B is fully repaid and
cancelled, make any capital expenditures that exceed US$20,000,000 in
any fiscal year of the Parent unless the ratio of Total Debt to EBITDA
(calculated on a quarterly basis for the immediately preceding period
of four consecutive fiscal quarters including the fiscal quarter most
recently ended) is less than or equal to 3.25:1.00; provided that the
foregoing restriction shall continue to apply if, at the end of any
subsequent fiscal quarter, such ratio exceeds 3.25:1.00, unless Bank
Facility B has theretofore been fully repaid and cancelled.
44
(b) Once Bank Facility B is fully repaid and cancelled, or the
ratio of Total Debt to EBITDA (calculated on a quarterly basis for the
immediately preceding period of four fiscal quarters including the
fiscal quarter most recently ended) is less than or equal to 3.25:1.00
(together, the "CONDITIONS"), the Restricted Group shall not make
capital expenditures exceeding an amount equal to 10% of Consolidated
Net Worth (as at the end of the fiscal year then most recently ended)
in any fiscal year of the Parent without the consent of the Majority
Noteholders, acting reasonably. If either of the Conditions occurs on a
date other than the last day of a fiscal year of the Parent, the
Restricted Group shall be permitted in such fiscal year to make the
capital expenditures permitted under this Section 5.25(b) instead of
those permitted under Section 5.25(a). Such amount shall be increased
to 20% of Consolidated Net Worth for any current fiscal year in which
(i) the ratio of Total Debt as at the end of the fiscal quarter of the
Parent then most recently ended to EBITDA for the period of four fiscal
quarters then most recently ended does not exceed 3.0:1.00, and (ii)
the Parent has maintained an Acceptable Rating at all times during the
then most recently ended two fiscal quarters with respect to its
long-term, senior unsecured Debt; provided however, that at any time
either of the tests in the preceding clauses (i) and (ii) are not met,
the applicable percentage shall return to 10% for the fiscal year in
which such condition is no longer met.
5.26. INTELLECTUAL PROPERTY.
Subject to the next succeeding sentence, the Parent will 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; provided that, on 20 days prior notice to the
Collateral Trustees, any member of the Restricted Group may sell or otherwise
transfer any interest that such member has in such intellectual property to IPG
Technologies Inc. at any time. Except as otherwise permitted by Section 5.12,
the Parent will not, and will not permit any Restricted Subsidiary 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.
5.27. NO AMENDMENTS TO CREDIT AGREEMENT.
The Parent will not, and will not permit any Restricted Subsidiary to,
allow any provision of the Credit Agreement in relation to repayments,
prepayments, pricing (including, without limitation, interest rate and margins),
or financial covenants to be amended, replaced or deleted in any manner that the
Majority Noteholders deem, in their sole discretion, to be adverse to the
interests of the holders of the Notes without the prior written consent of the
Majority Noteholders. This Section 5.27 is supplemental to the covenants set
forth in Section 9.5 of the Intercreditor Agreement.
45
6. EVENTS OF DEFAULT AND REMEDIES THEREFOR
6.1. EVENTS OF DEFAULT.
Any one or more of the following shall constitute an "EVENT OF DEFAULT"
as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for
more than five Business Days; or
(b) Default shall occur in the making of any payment of the
principal of any Note or premium, if any, thereon at the expressed or
any accelerated maturity date or at any date fixed for prepayment, or
the Issuer shall fail to make an offer to prepay as required under
Section 2.5, or the failure of the Obligors to make an offer to prepay
the Secured Obligations as required under Section 5.12(d); or
(c) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
the principal of or interest on any Material Debt (other than the
Notes) of the Parent or any Restricted Subsidiary and such default
shall not have been waived and shall continue beyond the period of
grace, if any, allowed under the terms of such Material Debt; or
(d) Default or the happening of any event shall occur under
any indenture, agreement or other instrument under which any Material
Debt of the Parent or any Restricted Subsidiary may be issued and such
default or event shall continue for a period of time sufficient to
permit the acceleration of the maturity of any Material Debt of the
Parent or any Restricted Subsidiary outstanding thereunder; or
(e) Default shall occur in the observance or performance of
any covenant or agreement contained in Section 5.6 through Section 5.14
hereof, in Section 5.19 through Section 5.25 hereof, or of any covenant
or agreement contained in any Guaranty Agreement; or
(f) Default shall occur in the observance or performance of
any other provision of this Agreement or any provision of any of the
Financing Documents which is not remedied within 30 days after the
earlier of (i) the day on which any Responsible Officer first obtains
knowledge of such default, or (ii) the day on which written notice
thereof is given to any Obligor by the holder of any Note; or
(g) Any representation or warranty made by any Obligor in this
Agreement, or made by the Parent or the General Partner in the Parent
Guaranty Agreement or made by any member of the Restricted Group in any
other Financing Document or any statement or certificate furnished by
such member of the Restricted Group in connection with the consummation
of the issuance and delivery of the Notes or furnished by any member of
the Restricted Group pursuant to any other Financing Document, is
untrue in any material respect as of the date of the issuance or making
thereof, or if the auditors certifying the
46
financial statements in accordance with Section 5.18(b) insert a
material qualification in their opinion; or
(h) Final judgment or final judgments for the payment of money
aggregating in excess of U.S. $2,500,000 (or the equivalent thereof in
any other currency) (exclusive of judgment amounts which are covered by
insurance of solvent insurers which have acknowledged such coverage) is
or are outstanding against any member of the Restricted Group or
against any property or assets of any such entity and any one of such
judgments has remained unpaid, unvacated, unbonded or unstayed by
appeal for a period of 90 days from the date of its entry; or
(i) A custodian, liquidator, trustee or receiver is appointed
for any member of the Restricted Group or for the major part of the
property of any one of them and is not discharged within 90 days after
such appointment; or
(j) Any member of the Restricted Group becomes insolvent or
bankrupt, is generally not paying its debts as they become due or makes
an assignment for the benefit of creditors, or any member of the
Restricted Group applies for or consents to the appointment of a
custodian, liquidator, trustee or receiver for such member of the
Restricted Group or for the major part of the property of any such
entity; or
(k) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against any member of the Restricted Group or 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 (j) or this clause (k) of this Section 6.1 (each
of the events referred to in clause (j) or this clause (k), a
"PROCEEDING"), and, if instituted against such member of the Restricted
Group, are consented to or are not dismissed within 20 Business Days
after such institution; or
(l) 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 commenced against any member of the
Restricted Group, such member shall have the right to contest such
seizure or taking in good faith, if the holders of all of the Notes are
absolutely satisfied, in their complete discretion, that the repayment
of the Notes, the interest and all other amounts relating thereto and
the ability of the Issuer to service its Debt shall not be compromised;
or
(m) If IPG Finance LLC assigns or transfers any of 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 permitted under this Agreement or the
Security Documents; or
(n) Either Guaranty Agreement shall be held by a court of
competent jurisdiction to be invalid or unenforceable in any respect,
or the Parent, the General Partner or any Restricted Subsidiary takes
any action for the purpose of repudiating or
47
rescinding the Guaranty Agreement to which it is a party or its
obligations thereunder, or the Parent, the General Partner or any
Restricted Subsidiary declares that its obligations thereunder are
unenforceable; or
(o) If in the opinion of the Majority Noteholders, acting in
good faith, a Material Adverse Change has occurred since December 31,
2000, except for any Material Adverse Change described in Schedule II
attached hereto, and the Majority Noteholders shall have given five (5)
Business Days written notice to the Issuer to such effect.
6.2. NOTICE TO HOLDERS.
When any Event of Default described in the foregoing Section 6.1 has
occurred, or if the holder of any Note or of any other evidence of Debt of any
Obligor gives any notice or takes any other action with respect to a claimed
default, such Obligor agrees to give notice within three (3) Business Days of
such event to all holders of the Notes then outstanding.
6.3. ACCELERATION OF MATURITIES.
When any Event of Default described in clause (a) or (b) of Section 6.1
has occurred and is continuing, any holder of any Note may, by notice in writing
sent in the manner provided in Section 9.6 to the Parent declare the entire
principal of and all interest accrued on such Note to be, and such Note shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in clause (a), (b), (c), (d), (e), (f), (g),
(h), (m), (n) or (o) of said Section 6.1 has occurred and is continuing, the
holder or holders of 51% or more of the principal amount of Notes (other than
Notes held by any member of the Restricted Group or any Affiliate) of all
Series, taken as a single class, at the time outstanding (the "MAJORITY
NOTEHOLDERS") may, by notice to the Parent, declare the entire principal and all
interest accrued on all Notes to be, and all Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in clause (i), (j), (k) or (l) of Section 6.1 has occurred,
then all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon any or all of the Notes becoming
due and payable as a result of any Event of Default as aforesaid, the Issuer
will forthwith pay to the holders of such Notes the entire principal of and
interest accrued on such Notes and, to the extent not prohibited by applicable
law, an amount as liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the Make-Whole Amount. No course of
dealing on the part of the holder or holders of any Notes nor any delay or
failure on the part of any holder of Notes to exercise any right shall operate
as a waiver of such right or otherwise prejudice such holder's rights, powers
and remedies. The Issuer further agrees, to the extent permitted by law, to pay
to the holder or holders of the Notes all reasonable costs and expenses incurred
by them in the collection of any amounts payable under the Notes in connection
with any Event of Default hereunder, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith. All amounts paid hereunder with respect to principal, Make-Whole
Amount, if any, and interest on the Notes shall be paid ratably to all holders
of Notes which have become due and payable pursuant to this Section 6.3.
48
6.4. RESCISSION OF ACCELERATION.
The provisions of Section 6.3 are subject to the condition that if the
principal of and accrued interest on all or any outstanding Notes have been
declared immediately due and payable by reason of the occurrence of any Event of
Default described in clause (a), (b), (c), (d), (e), (f), (g), (h), (m), (n) or
(o) of Section 6.1, the holders of at least 66 2/3% in aggregate principal
amount of the Notes of all Series, taken as a single class, then outstanding may
rescind and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under Section 6.3) shall
have been duly paid; and
(c) each and every other Default and Event of Default
shall have been made good, cured or waived pursuant to Section 7.1;
and provided, further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto. Such annulment and rescission shall be by written instrument filed with
the Parent.
7. AMENDMENTS, WAIVERS AND CONSENTS
7.1. CONSENT REQUIRED.
Any term, covenant, agreement or condition of this Agreement may, with
the consent of the Obligors, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), if the Obligors shall have obtained the consent in writing of
the holders of at least 66 2/3% in aggregate principal amount of the outstanding
Notes of all Series, taken as a single class; provided that without the written
consent of the holders of all of the Notes then outstanding, no such amendment
or waiver shall be effective (a) which will change the time of payment of the
principal of or the interest on any Note or change the principal amount thereof
or change the rate of interest thereon, or (b) which will change any of the
provisions with respect to optional prepayments including, without limitation,
the definition of Make-Whole Amount, or (c) which will change the percentage of
holders of the Notes required to consent to any such amendment or waiver of any
of the provisions of this Section 7 or Section 6.
7.2. SOLICITATION OF HOLDERS.
So long as there are any Notes outstanding, no Obligor will solicit,
request or negotiate for or with respect to any proposed waiver or amendment of
any of the provisions of this Agreement or the Notes unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall be informed thereof
by such Obligor and shall be afforded the opportunity of
49
considering the same and shall be supplied by the Obligors with sufficient
information to enable it to make an informed decision with respect thereto. No
Obligor will directly or indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or otherwise, to any
holder of Notes as consideration for or as an inducement to the entering into by
any holder of Notes of any waiver or amendment of any of the terms and
provisions of this Agreement or the Notes unless such remuneration is
concurrently offered, on the same terms, ratably to the holders of all Notes
then outstanding.
7.3. EFFECT OF AMENDMENT OR WAIVER.
Any such amendment or waiver shall apply equally to all of the holders
of the Notes and shall be binding upon them, upon each future holder of any Note
and upon the Obligors, whether or not such Note shall have been marked to
indicate such amendment or waiver. No such amendment or waiver shall extend to
or affect any obligation not expressly amended or waived or impair any right
consequent thereon. As used herein, the term "THIS AGREEMENT" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
8. INTERPRETATION OF AGREEMENT; DEFINITIONS
8.1. DEFINITIONS.
Unless the context otherwise requires, the terms hereinafter set forth
when used herein shall have the following meanings and the following definitions
shall be equally applicable to both the singular and plural forms of any of the
terms herein defined:
"ACCEPTABLE RATING" shall mean a rating of at least BBB by Standard &
Poor's or a rating of at least Baa2 by Moody's, or an equivalent credit rating
by a rating agency of recognized standing acceptable to the Majority
Noteholders.
"ACQUISITION" shall mean the acquisition (whether by way of purchase,
exchange, Investment or otherwise) of (a) a majority of the issued and
outstanding Voting Stock of a Person (other than a member of the Restricted
Group), or (b) 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.
"ADJUSTED CONSOLIDATED" for any period, or as of any time, 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 for such
period or as of such time.
"AFFILIATE" shall mean any Person (other than the Parent or a
Restricted Subsidiary) (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
any Obligor, (b) which beneficially owns or holds (i) 5% or more of the Voting
Stock of the Parent or the General Partner or (ii) 5% or more of the Equity
Interests of the Issuer or (c) 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 Interests) of
which is beneficially owned or held by any Obligor or a Subsidiary. The term
"control" means the possession, directly or indirectly, of the
50
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.
"AGREEMENT, THIS" is defined in Section 7.3.
"APPLICABLE ADJUSTMENT MARGIN" shall mean, as of any date of
determination prior to an Interest Rate Adjustment Date, an amount equal to the
product of (a) six hundred and three ten-thousandths percent (0.0603%) times (b)
the number of complete calendar months which shall have expired since May 1,
2002 as of such date of determination.
"APPLICABLE DEFAULT RATE" shall mean, for any Series of Notes at any
time, a rate per annum equal to the lesser of (a) the rate of interest in effect
at such time for such Series of Notes plus two percent (2%) and (b) the highest
interest rate allowed by applicable law for Notes of such Series of Notes.
"AVAILABLE CASH" shall mean, at any time, cash and Cash Equivalents
which are freely available to the Restricted Group at such time in that there
are no restrictions of any nature whatsoever on the Restricted Group's access
thereto at such time, including, without limitation, any restrictions or
potential delays arising out of any (a) agreement, (b) incorporating,
constituting or charter documents, (c) foreign exchange or currency controls,
(d) Law, (e) Lien or (f) otherwise. For purposes of the computation of Total
Debt, "Available Cash" shall not include cash and Cash Equivalents held in
Drumheath.
"BANK DOCUMENTS" is defined in Section 4.7.
"BANK FACILITY A" shall mean, with respect to and pursuant to the
Credit Agreement, that certain 364-day extendible revolver in the principal
amount of up to U.S. $50,000,000 (or its equivalent in Canadian currency),
extendible annually under the terms of the Credit Agreement.
"BANK FACILITY B" shall mean, with respect to and pursuant to the
Credit Agreement, that certain revolving Facility B in the principal amount of
up to U.S. $35,000,000 (or its equivalent in Canadian currency).
"BANK FACILITY C" shall mean, with respect to and pursuant to the
Credit Agreement, that certain revolving Facility C in the principal amount of
up to U.S. $60,000,000 (or its equivalent in Canadian currency).
"BANKS" shall mean the "Lenders" (as such term is defined in the Credit
Agreement).
"BANK TERM FACILITIES" shall mean Bank Facility B and Bank Facility C.
"BUILDING INSURANCE" is defined in Section 5.2(a)(ii).
"BUSINESS DAY" shall mean any day except a Saturday, Sunday or other
day on which banks are generally not open for business in Xxx Xxxx, Xxx Xxxx,
Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx or Xxxxxxxx, Xxxxxx, Xxxxxx, or any
other day on which the New York Stock Exchange is generally not open for
business.
51
"CANADIAN COLLATERAL" shall mean all personal and real property located
in Canada granted as security for the obligations of the Obligors and the
Restricted Subsidiaries under this Agreement, the Notes, the Subsidiary Guaranty
Agreement and the Parent Guaranty Agreement, pursuant to the Canadian Security
Documents.
"CANADIAN COLLATERAL TRUSTEE" shall mean Computershare Trust Company of
Canada, in its capacity as Canadian collateral trustee for the holders of Debt
under this Agreement, the other Financing Documents and the Bank Documents,
together with its successors in such capacity duly appointed in accordance with
the provisions of the Financing Documents.
"CANADIAN ENVIRONMENTAL INDEMNIFICATION AGREEMENT" is defined in
Section 4.6(b).
"CANADIAN MORTGAGES" is defined in Section 3.5(c).
"CANADIAN SECURITY DOCUMENTS" is defined in Section 3.5(c).
"CANCO" shall mean IPG Holding Company of Nova Scotia and its
successors.
"CAPITALIZED LEASE" shall mean any lease (a) the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the Parent and its Subsidiaries in accordance with GAAP or (b) 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.
"CAPITALIZED RENTALS" of any Person shall mean, 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.
"CASH EQUIVALENTS" shall mean, as of the date of any determination
thereof, Investments of the type described in clause (b), (c) or (d) of the
definition of the term "Permitted Investments", and all sums held in bank
accounts.
"CDN" shall mean Canadian dollars.
"CHANGE IN CONTROL" shall mean any change in ownership of the Voting
Stock of the Parent after the Effective Date which results in any Person
(including Affiliates or associates of such Person), other than a member of the
Restricted Group, becoming the "beneficial owner" (as such term is used in Rule
13d-5 under the Exchange Act) of more than 50% of the total voting power of all
classes then outstanding of the Parent's Voting Stock.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder from time to time, and any
successor statute thereto, together with the regulations promulgated thereunder,
in each case as in effect from time to time.
"COLLATERAL" shall mean the U.S. Collateral and the Canadian
Collateral.
52
"COLLATERAL SUSPENSION CONDITIONS" shall mean, at any time:
(a) the Acceptable Rating contemplated by Section 1.6(a) is
then in full force and effect, not having been withdrawn or placed on a
credit watch with a negative implication by Xxxxx'x or Standard &
Poor's (or, if applicable, such other equivalent rating agency as has
been accepted by the Majority Noteholders);
(b) Total Debt, determined as of the end of each of the four
most recently ended fiscal quarters of the Parent, does not exceed two
hundred fifty percent (250%) of EBITDA for the period of four
consecutive fiscal quarters of the Parent ended at the end of each of
such four most recently ended fiscal quarters of the Parent;
(c) each of the Lenders pursuant to the Credit Agreement, and
each of the holders of the 1998 Notes, shall have agreed not to direct
the U.S. Collateral Trustee, the Canadian Collateral Trustee or any
other trustees or agents holding collateral for the benefit of the
Banks and the holders of the 1998 Notes to enforce any of the
provisions of the Security Documents or other documents creating Liens
securing Bank Facility A (or, if applicable, any replacement thereof)
during the applicable Collateral Suspension Period; and
(d) no Default or Event of Default has occurred and is
continuing;
in each case as of such time.
"COLLATERAL SUSPENSION DATE" is defined in Section 1.6.
"COLLATERAL SUSPENSION PERIOD" is defined in Section 1.6.
"COLLATERAL TRUSTEES" shall mean the U.S. Collateral Trustee and the
Canadian Collateral Trustee.
"COLLATERAL TRUST INDENTURE" is defined in Section 4.5(a).
"COMMITMENT" at any time, with respect to any Bank Term Facility, shall
mean the amount of the "Credit" (as defined in the Credit Agreement as in effect
on the date of this Agreement with respect to such Bank Term Facility), as such
amount may have been reduced (but not increased) from time to time pursuant to
the terms of the Credit Agreement.
"CONSOLIDATED" when used as a prefix to any item (unless such item is
defined differently herein) shall mean the aggregate of 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 Sections 5.6,
5.7 and 5.8, and the other financial calculations
53
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.
"CONSOLIDATED ASSETS" shall mean, as of the date of any determination
thereof, consolidated total assets of the Restricted Group as of such date
determined in accordance with GAAP (excluding, in any event, assets or equity
attributable to Unrestricted Subsidiaries).
"CONSOLIDATED CURRENT LIABILITIES" shall mean, 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 on such date (excluding, in any event, liabilities
attributable to Unrestricted Subsidiaries).
"CONSOLIDATED NET INCOME" for any period shall mean 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:
(a) 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;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any Person (other than a
Restricted Subsidiary), substantially all of 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;
(e) 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;
(f) 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;
(g) 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;
(h) earnings resulting from any reappraisal, revaluation
or write-up of assets;
54
(i) 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;
(j) any gain arising from the acquisition of any
Securities of any member of the Restricted Group; and
(k) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall have been
created as an expense or charge for such period.
"CONSOLIDATED NET WORTH" shall mean, as of the date of any
determination thereof, the 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 (a) Minority
Interests and (b) all Investments (other than Permitted Investments) held by any
member of the Restricted Group.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean, as of the date of any
determination thereof, the sum of (a) the amount of Total Debt on such date,
plus (b) the Consolidated Net Worth as of such date.
"CONTROL EVENT" shall mean:
(a) the execution by any Obligor or any Subsidiary or
Affiliate of any letter of intent with respect to any proposed
transaction or event or series of transactions or events that,
individually or in the aggregate, would result in a Change in Control
if such transactions or events were to be consummated or to occur, or
(b) the execution of any written agreement that, when fully
performed by the parties thereto, would result in a Change in Control.
"CONTROL PREPAYMENT DATE" is defined in Section 2.5(a).
"CREDIT AGREEMENT" shall mean that certain Credit Agreement of even
date herewith, by and among the members of the Restricted Group, The
Toronto-Dominion Bank, Comerica Bank, National Bank of Canada, and certain other
Persons, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the provisions thereof, of this Agreement and of
the Intercreditor Agreement.
"DEBT" of any Person shall mean, as of the date of any determination
thereof (without duplication):
(a) all Indebtedness for borrowed money or evidenced by
notes, bonds, debentures or similar evidences of indebtedness of such
Person on such date;
(b) Negative Value of Derivative Instruments of such
Person on such date;
55
(c) obligations secured by any Lien on such date 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 Liens 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;
(d) Capitalized Rentals of such Person on such date;
(e) reimbursement obligations in respect of credit
enhancement instruments of such Person on such date including letters
of credit; and
(f) (without duplication of any of the foregoing)
Guaranties of such Person on such date of obligations of others of the
character referred to hereinabove in this definition.
"DEFAULT" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"DERIVATIVE INSTRUMENTS" shall mean an agreement entered into from time
to time by the Issuer in order to control, fix or regulate currency exchange
fluctuations or the rate of interest payable on borrowings under either of the
Bank Term Facilities.
"DESIGNATED FACILITIES" shall mean all real property owned or leased by
any member of the Restricted Group in the United States of America and Canada,
including land, buildings and other improvements.
"DRUMHEATH" shall mean Drumheath Indemnity Ltd., a company organized
under the laws of Barbados.
"EBITDA" for any fiscal period shall mean (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.
"EFFECTIVE DATE" is defined in Section 1.4.
"ENVIRONMENTAL LAWS" means all applicable United States, Mexican and
Canadian, federal, state, county, provincial and 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 the clean-up, remediation,
pollution, protection or
56
regulation of the environment and public health including, without limitation:
(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, and chemicals or substances
regulated by any such statutes, codes, regulations, rules or ordinances; and (c)
underground storage tanks and related piping, and emissions, discharges and
releases or threatened releases therefrom. The statutes, codes, regulations,
rules or ordinances referred to herein shall 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 U.S.C. ss. 6901 et seq.), (iv) the Toxic 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 U.S.C. ss. 9601 et seq.), (vi) the Canadian
Environmental Protection Act, (vii) the Environmental Protection Act (Ontario),
and (viii) the Environmental Quality Act (Quebec).
"EQUITY EVENT" shall mean the issuance by any member of the Restricted
Group of Equity Interests or Debt (other than (a) Debt owing by one member of
the Restricted Group to another member of the Restricted Group, and (b) a
replacement of Bank Facility A after the termination thereof) of the nature
contemplated in the definition of "Interest Rate Adjustment Date."
"EQUITY EVENT PAYMENT" shall mean, with respect to any Equity Event:
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, an amount equal
to 100% of the Equity Event Proceeds in respect of such Equity Event;
and
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated and (iii)
there is any Debt outstanding under Bank Facility C or Bank Facility C
has not been terminated, an amount equal to 75% of Equity Event
Proceeds in respect of such Equity Event.
"EQUITY EVENT PREPAYMENT DATE" is defined in Section 2.3(a).
"EQUITY EVENT PROCEEDS" shall mean, at any time, with respect to any
Equity Event, an amount equal to the difference of (a) the aggregate amount of
the cash consideration received by the Restricted Group in connection with such
Equity Event, minus (b) all reasonable out-of-pocket costs and expenses
(including, without limitation, underwriting and similar fees) actually incurred
by any member of the Restricted Group in connection with such Equity Event.
"EQUITY INTEREST" 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;
57
(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.
"ERISA" shall mean 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. References to sections
of ERISA shall be construed to also refer to any successor sections.
"ERISA AFFILIATE" shall mean any corporation, trade or business that
is, along with the Parent, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"EVENT OF DEFAULT" is defined in Section 6.1.
"EXCESS CASH FLOW" shall mean, in respect of any period, the result of:
(a) the Restricted Group's EBITDA for such period, as of each
Excess Cash Flow Prepayment Date, plus any decrease in the Restricted
Group's consolidated non-cash working capital items (or minus any
increase in the Restricted Group's consolidated non-cash working
capital items) during such period, minus
(b) the sum for such period of:
(i) all cash interest or dividends paid by the
Parent and its Restricted Subsidiaries on Debt or preferred
shares during such period,
(ii) the amount of all cash payments in respect of
capital expenditures made by members of the Restricted Group
during such period and not financed using the proceeds of Debt
(other than Debt under the Credit Agreement or Debt from a
member of the Restricted Group to another member of the
Restricted Group), up to a maximum of $15,000,000 during the
Parent's fiscal year 2002, and $20,000,000 during the Parent's
fiscal year 2003, it being understood that from and after the
first date as of which there is no Debt outstanding under Bank
Facility B and Bank Facility B has been terminated, the
maximum amounts set forth in this clause (ii) shall not apply,
(iii) the amount of all voluntary and scheduled
principal payments during such period of Debt of members of
the Restricted Group held by Persons outside of the Restricted
Group, including any voluntary or mandatory permanent
reductions thereof but excluding (x) prepayments of loans
under the Credit
58
Agreement, the Notes and the 1998 Notes with Excess Cash
Flow Payments from the application of Section 9.2.2 of the
Credit Agreement and Section 2.4 of the 1998 Note Agreement
(each as in effect on the date of this Agreement) and
Section 2.4 hereof, in each case, for a prior fiscal period,
and (y) prepayments of Debt with proceeds from the sale of
assets (other than sales of inventory or services in the
ordinary course of business),
(iv) principal payments by members of the
Restricted Group during such period on Capitalized Leases held
by lessors who are not members of the Restricted Group and
(v) taxes paid in cash by members of the
Restricted Group in such period.
Excess Cash Flow shall be determined as follows:
(A) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated,
(1) for the fiscal quarter ended March 31, 2002,
Excess Cash Flow shall be based on the Excess Cash Flow during
such quarter,
(2) for the fiscal quarter ended June 30, 2002,
Excess Cash Flow shall be based on the Excess Cash Flow during
the first two quarters of fiscal year 2002 reduced by the
Excess Cash Flow paid in accordance with the provisions of
this Agreement, the 1998 Note Agreement, and the Credit
Agreement with respect to the fiscal quarter ended March 31,
2002 (the amount of any such reduction to be made under this
paragraph is hereinafter referred to as the "Adjusted
Amount"),
(3) for the fiscal quarter ended September 30, 2002,
Excess Cash Flow shall be based on the Excess Cash Flow during
the first three quarters of fiscal year 2002 reduced by the
Excess Cash Flow paid in accordance with this Agreement, the
1998 Note Agreement and the Credit Agreement with respect to
the first two quarters of fiscal year 2002,
(4) for the fiscal quarter ended December 31, 2002,
Excess Cash Flow shall be based on the Excess Cash Flow for
the fiscal year 2002 reduced by the Excess Cash Flow paid in
accordance with this Agreement, the 1998 Note Agreement and
the Credit Agreement with respect to the first three quarters
of fiscal year 2002 and to be adjusted promptly following
confirmation by the Parent's auditors upon release of the
fiscal year 2002 year-end financial statements; and
(5) for any fiscal quarter ended on or after March
31, 2003, Excess Cash Flow shall be based on a trailing four
quarter basis reduced by the Excess Cash Flow paid in
accordance with this Agreement, the 1998 Note Agreement and
the Credit Agreement with respect to the previous three
quarters and to be adjusted (in the case of the fiscal year
2003) promptly following confirmation by
59
the Parent's auditors upon the release of the year-end
financial statements for such fiscal year, and
(B) for each fiscal year commencing with the fiscal year in
which there is no Debt outstanding under Bank Facility B and Bank
Facility B has been terminated, Excess Cash Flow shall be determined on
a fiscal year basis.
Any negative Adjusted Amounts, if any, shall be carried forward into
the following quarter(s) and shall not be repaid to any member of the Restricted
Group.
"EXCESS CASH FLOW NOTICE DATE" shall mean:
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, the date which
is (i) sixty-three (63) days after the end of each fiscal quarter of
the Parent or, if earlier, (ii) the date on which Bank Facility B is
reduced pursuant to Section 9.2.2 of the Credit Agreement (as in effect
on the date of this Agreement) as a consequence of Excess Cash Flow (as
calculated for the applicable period ending on the last day of such
fiscal quarter);
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated and (iii)
there is any Debt outstanding under Bank Facility C or Bank Facility C
has not been terminated, the date which is (x) one hundred and twenty
(120) days after the end of each fiscal year of the Parent or, if
earlier, (y) the date on which Bank Facility C is reduced pursuant to
Section 9.2.2 of the Credit Agreement (as in effect on the date of this
Agreement) as a consequence of the existence of Excess Cash Flow for
such year; and
(c) at any time that there is no Debt outstanding under the
Bank Term Facilities, the Bank Term Facilities have been terminated and
Excess Cash Flow Payments are required under the terms of this
Agreement, the date which is one hundred and twenty (120) days after
the end of each fiscal year of the Parent.
"EXCESS CASH FLOW PAYMENT" shall mean, in respect of any Excess Cash
Flow Prepayment Date:
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, an amount equal
to 75% of Excess Cash Flow for the fiscal period of the Parent
specified in and determined pursuant to the second sentence of the
definition of "Excess Cash Flow" most recently ended as of such Excess
Cash Flow Prepayment Date;
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated, (iii) there
is any Debt outstanding under Bank Facility C, or Bank Facility C has
not been terminated, and (iv) the Excess Cash Flow Reduction Conditions
have not been met on such Excess Cash Flow Prepayment Date, an amount
equal to 50% of Excess Cash Flow for the fiscal year of the Parent most
recently ended as of such Excess Cash Flow Prepayment Date;
60
(c) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated, (iii) there
is any Debt outstanding under Bank Facility C, or Bank Facility C has
not been terminated, (iv) the Excess Cash Flow Reduction Conditions
have been met on such Excess Cash Flow Prepayment Date and (v) no
Default or Event of Default has occurred and is continuing, an amount
equal to 35% of Excess Cash Flow for the fiscal year of the Parent most
recently ended as of such Excess Cash Flow Prepayment Date;
(d) at any time that there is no Debt outstanding under the
Bank Term Facilities, the Bank Term Facilities have been terminated and
the Issuer or any member of the Restricted Group has entered into a new
bank agreement with similar cash flow sweep provisions as those
contained in the Credit Agreement, in form reasonably satisfactory to
the Majority Noteholders, an amount equal to the greater of (i) 35% of
Excess Cash Flow for the fiscal year of the Parent most recently ended
as of such Excess Cash Flow Prepayment Date or (ii) the percentage of
Excess Cash Flow required under the provisions of such new bank
agreement; and
(e) at any time that there is no Debt outstanding under the
Bank Term Facilities, the Bank Term Facilities have been terminated and
neither the Issuer nor any other member of the Restricted Group has
entered into a new bank agreement with similar cash flow sweep
provisions as those contained in the Credit Agreement, zero (0);
provided, however, that, at any time, if the outstanding Debt at such
time under each of the Bank Term Facilities is equal to the maximum amount
permitted at such time under the Credit Agreement, the Excess Cash Flow Payment
made in respect of any Excess Cash Flow Prepayment Date shall be reduced to the
maximum amount (with respect to such Excess Cash Flow Prepayment Date, the
"Reduced Excess Cash Flow Amount") permitted such that, after giving effect
thereto, the principal amount of Debt outstanding at such time under Bank
Facility A (net of Available Cash at such time) does not exceed $35,000,000;
provided, further, that if the Debt outstanding under Bank Facility A is less
than $35,000,000 (net of Available Cash) at any time after such Excess Cash Flow
Prepayment Date, the Issuer shall add to the Excess Cash Flow Payment on the
next succeeding Excess Cash Flow Prepayment Date, such amount by which the Debt
under Bank Facility A is less than $35,000,000 at such time.
"EXCESS CASH FLOW PREPAYMENT DATE" is defined in Section 2.4(a).
"EXCESS CASH FLOW REDUCTION CONDITIONS" shall mean, at any time, (a)
the Parent shall have obtained an Acceptable Rating in respect of the long-term
senior unsecured Debt of the Parent and such Acceptable Rating is then in full
force and effect, not having been withdrawn by Moody's, Standard & Poor's or, if
applicable, such other equivalent rating agency as has been accepted by the
Majority Noteholders or (b) Total Debt, determined as of the end of the then
most recently ended fiscal year of the Parent, does not exceed two hundred fifty
percent (250%) of EBITDA for such fiscal year.
"EXCLUDED NON-MORTGAGED PROPERTIES" shall mean each of the Designated
Facilities that is not a Mortgaged Property. For the purposes of this Agreement,
such term shall mean the following Designated Facilities only: (a) leased
distribution facility in Cumming, Georgia; (b)
61
leased warehouse facility in Ontario, California; (c) leased manufacturing and
distribution facility in Rayne, Louisiana; and (d) manufacturing and
distribution facility in Richmond, Kentucky which is owned by the City of
Richmond, Kentucky and leased to a member of the Restricted Group.
"EXISTING GUARANTY AGREEMENTS" is defined in Section 1.1.
"EXISTING NOTE AGREEMENT" is defined in Section 1.1.
"EXISTING NOTES" is defined in Section 1.1.
"EXISTING SERIES A NOTES" is defined in Section 1.1.
"EXISTING SERIES B NOTES" is defined in Section 1.1.
"FINANCING DOCUMENTS" shall mean this Agreement, the Notes, the
Guaranty Agreements, the Security Documents, the Intercreditor Agreement, the
1998 Note Agreement and the other agreements and instruments to be executed
pursuant to the terms of each of such Financing Documents, as each may be
amended, supplemented or otherwise modified from time to time.
"FIXED CHARGES" for any period shall mean the sum, determined on a
consolidated basis, of (a) all Rentals (other than Rentals on Capitalized
Leases) payable during such period by the members of the Restricted Group, and
(b) all Interest Expense for such period an all Indebtedness (including, for
this purpose, the interest component of Rentals on Capitalized Leases) of the
Restricted Group.
"FLOOD ACT" is defined in Section 5.2(a)(v).
"FOREIGN PENSION PLAN" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program, other than social
security or social insurance, established or maintained outside the United
States by the Parent or any one or more of the Subsidiaries primarily for the
benefit of employees of the Parent or such Subsidiaries residing outside the
United States, which plan, fund or other similar program provides for retirement
income for such employees or a deferral of income for such employees in
contemplation of retirement and is not subject to ERISA or the Code.
"GAAP" shall mean the generally accepted accounting principles
acknowledged by the Canadian Institute of Chartered Accountants and published in
the Canadian Institute of Chartered Accountants' Handbook.
"GENERAL PARTNER" is defined in the introductory paragraph of this
Agreement.
"GUARANTIES" by any Person shall mean 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
62
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 Guaranty in respect of any
Indebtedness for borrowed money, and a Guaranty 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.
"GUARANTY AGREEMENTS" is defined in Section 1.5.
"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 U.S.C. ss. 9601 et seq.) and shall also include, without limitation,
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 Canadian Environmental Protection Act, 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 United
States or Canadian federal, state, county, provincial statute, code or
regulation, rule or ordinance or any other waste, chemicals or substances
regulated by any Environmental Law.
"IMPOSITION" shall have the same meaning ascribed to such term in the
U.S. Mortgages.
"INACTIVE SUBSIDIARIES" shall mean those Subsidiaries of the Parent
which are not Restricted Subsidiaries and which do not conduct any real
operations or business, a list of which, at the Effective Date, is included as
part of Annex A to Exhibit B-2.
"INDEBTEDNESS" of any Person shall mean and include 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 Lien 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 of such Person and (e)
Guaranties of any other Person's obligations of the character referred to in
this definition.
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"INSTITUTIONAL HOLDER" shall mean any insurance company, bank, savings
and loan association, trust company, investment company, charitable foundation,
employee benefit plan (as defined in ERISA) or other institutional investor or
financial institution.
"INTERCREDITOR AGREEMENT" is defined in Section 4.5(f).
"INTEREST EXPENSE" of any Person for any period shall mean 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.
"INTEREST RATE ADJUSTMENT DATE" shall mean the first day on which
either (a) the Parent shall have entered into a reasonable and bona fide
agreement with a reputable United States and/or Canadian Securities dealer
authorizing and directing such dealer to (i) market the issuance of any Equity
Interests of the Parent or subordinated or mezzanine Debt of the Parent or the
Issuer, which Debt shall be on terms acceptable to the Majority Noteholders (in
their absolute discretion), in all such cases providing for proceeds to the
Parent or the Issuer in an aggregate amount of at least the outstanding
principal amount under Bank Facility B on such date, or (ii) underwrite such
Securities providing for such amount of proceeds to the Parent or the Issuer on
a firm commitment basis, in each case, on financial and other terms and
conditions that are not materially less favorable to the Parent or the Issuer,
as applicable, than those generally available in the United States and/or
Canadian capital markets to issuers of Securities in the packaging industry
having a creditworthiness comparable to the Parent or the Issuer, as applicable,
or (b) there is no Debt outstanding under Bank Facility B and Bank Facility B
has been terminated.
"INVESTMENTS" shall mean 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 accounts receivable and inventory (including, without
limitation, raw materials, work in process and finished goods) of such Person to
be used or consumed in the ordinary course of business, or any Available Cash.
"ISSUER" is defined in the introductory paragraph of this Agreement.
"LAW" shall mean 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.
"LIEN" shall mean 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
"Lien" shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions,
64
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 purposes of
this Agreement, the Parent or a Restricted Subsidiary 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 Lien.
"LIKE ASSETS" shall mean, 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 Effective Date or in a business reasonably related thereto.
"LONG-TERM LEASE" shall mean any lease of real or personal property
(other than a Capitalized Lease) having an original term, including any period
for which the lease may be renewed or extended at the option of the lessor, of
more than three years.
"MAJORITY BANKS" shall have the meaning ascribed to such term in the
Intercreditor Agreement.
"MAJORITY NOTEHOLDERS" is defined in Section 6.3.
"MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount equal to
the excess, if any, of the Discounted Value of the Remaining Scheduled Payments
with respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 2.7 or
has become or is declared to be immediately due and payable pursuant to
Section 6.3, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (a)
the yields reported, as of 10:00 A.M. (New York City time) on the third
Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as "PX1" or other appropriate page
of the Bloomberg Financial Markets Services Screen (or such other
display as may replace Page PX1 on the Bloomberg Financial Markets
Services Screen) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (b) if such yields are not reported as
of such time or the yields reported as of such time are not
ascertainable, the Treasury
65
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the third Business Day
preceding the Settlement Date with respect to such Called Principal,
in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will
be determined, if necessary, by (i) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (A) the
actively traded U.S. Treasury security with the average life closest
to and greater than the Remaining Average Life and (B) the actively
traded U.S. Treasury security with the average life closest to and
less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum
of the products obtained by multiplying (i) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (ii) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 2.7 or Section 6.3; and
provided, further, that in calculating interest on Called Principal for
purposes of determining the Remaining Scheduled Payments, it shall be
assumed for such calculation that the Series A Notes bear interest at a
per annum rate equal to 7.66% and that the Series B Notes bear interest
at a per annum rate equal to 7.81%.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 2.7 or has become or is declared to be immediately
due and payable pursuant to Section 6.3, as the context requires.
"MATERIAL ADVERSE CHANGE" shall mean the occurrence or the failure to
occur of any event or condition or series of events or conditions which, whether
individually or in the aggregate, would result in a material adverse change in
the business, assets, liabilities, financial position, operating results,
business prospects or material agreements of the Restricted Group or in the
ability of the members of the Restricted Group, taken as a whole, to perform
their obligations under this Agreement or under the other Financing Documents.
66
"MATERIAL DEBT" shall mean, 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 U.S. $5,000,000 or an equivalent
amount of money in any other currency.
"MINORITY INTERESTS" shall mean 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 Preferred 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.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGED PROPERTIES" is defined in Section 4.6(a).
"MULTIEMPLOYER PLAN" shall have the same meaning as in section 3(37) of
ERISA.
"NAIC" is defined in Section 3.2(a).
"NEGATIVE VALUE OF DERIVATIVE INSTRUMENTS" shall mean, as of the date
of any determination thereof, the aggregate amount that would be payable to all
Persons by any member of the Restricted Group (net of all amounts that would be
payable by each such Person to such member of the Restricted Group) on the date
of determination pursuant to Section 6(e)(ii)(2)(A) of each ISDA Master
Agreement between such member and such Persons as if all Derivative Instruments
under such ISDA Master Agreements were being terminated on that date.
"NET INCOME AVAILABLE FOR FIXED CHARGES" shall mean, for any period,
the sum of Consolidated Net Income for such period plus (to the extent included
in determining such 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 for such period, (c) all amortization
expenses of the Restricted Group and (d) all depreciation of the Restricted
Group.
"1998 NOTE AGREEMENT" shall mean that certain Amended and Restated Note
Agreement, dated as of December 20, 2001, among the Obligors and the holders of
notes issued thereunder, as amended, supplemented or otherwise modified from
time to time.
"1998 NOTES" shall mean those certain Senior Secured Notes due 2008 in
the aggregate principal amount of $137,000,000, issued by the Issuer under the
1998 Note Agreement, as amended from time to time.
"NOTEHOLDERS" is defined in the introductory paragraph of this
Agreement.
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"NOTES" is defined in Section 1.2.
"OBLIGORS" is defined in the introductory paragraph of this Agreement.
"ORIGINAL CLOSING DATE" shall mean July 1, 1999.
"PARENT" is defined in the introductory paragraph of this Agreement.
"PARENT GUARANTY AGREEMENT" is defined in Section 1.5.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INVESTMENTS" shall mean all:
(a) Investments by any member of the Restricted Group in any
other member of the Restricted Group, including Investments (i)
directly out of the cash proceeds to the Parent of the concurrent sale
of shares of capital stock of the Parent or (ii) pursuant to a direct
share exchange offer by the Parent;
(b) Investments 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 or at least P-1 by Moody's, or their equivalent acceptable to
the Majority Noteholders;
(c) Investments in (i) 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 (ii) 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;
(d) 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 U.S. $500,000,000 (or its equivalent in Canadian
currency) and whose long-term certificates of deposit are, at the time
of acquisition thereof by any member of the Restricted Group, rated A-
or better by Standard & Poor's or A3 or better by Moody's, or their
equivalent acceptable to the holders of the Notes, 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 U.S. $1,000,000,000 (or its
equivalent in such country's local currency); and
68
(e) loans or advances to employees of the Parent and its
Subsidiaries for the purchase of shares of stock of the Parent 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 provided
that the aggregate outstanding amount of all such loans or advances
shall at no time exceed U.S. $5,000,000.
"PERMITTED LIENS" is defined in Section 5.10.
"PERSON" shall mean an individual, partnership, limited liability
company, corporation, trust, an entity created pursuant to Law or unincorporated
organization, and a government or agency or political subdivision thereof.
"PLAN" means an "employee pension benefit plan" (as defined in section
3(2) of ERISA) that is subject to Title IV of ERISA (other than a Multiemployer
Plan) and that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Parent or any ERISA Affiliate or
with respect to which the Parent or any ERISA Affiliate may have any liability.
"PLEDGE AGREEMENT" is defined in Section 4.5(e).
"POLICIES" is defined in Section 5.2(b).
"PRIORITY DEBT" is defined in Section 5.9(a)(ii).
"PROCEEDING" is defined in Section 6.1(k).
"PRO RATA SHARE" shall mean, at any time, with respect to any holder of
Notes,
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, a fraction the
numerator of which shall be the outstanding principal amount of the
Notes held by such holder at such time and the denominator of which
shall be the sum of the then outstanding principal amount of all Notes,
plus the aggregate unpaid principal amount under the Bank Term
Facilities at such time, plus the outstanding principal amount of 1998
Notes at such time, and
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated, and (iii)
there is any Debt outstanding under Bank Facility C, or Bank Facility C
has not been terminated, a fraction the numerator of which shall be the
outstanding principal amount of the Notes held by such holder at such
time and the denominator of which shall be the sum of the then
outstanding principal amount of the Notes, plus the aggregate unpaid
principal amount under Bank Facility C at such time, plus the
outstanding principal amount of 1998 Notes at such time, and
(c) at any time that there is no Debt outstanding under the
Bank Term Facilities, and each of the Bank Term Facilities has been
terminated, a fraction the numerator of which shall be the outstanding
principal amount of the Notes held by such holder at such time and the
denominator of which shall be the sum of the then
69
outstanding principal amount of all Notes plus the outstanding
principal amount of 1998 Notes at such time.
"PTE" is defined in Section 3.2(a)(i).
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"QUALIFYING EU JURISDICTION" shall mean any country (other than Greece)
which as of the Effective Date is a member of the European Union.
"REMAINING TAX PREPAYMENT AMOUNT" shall mean, at any time, the greater
of (a) zero (0) and (b) the result of (i) twenty-five percent (25%) of the
original principal amount of the Notes issued on the Original Closing Date minus
(ii) the aggregate principal amount of Notes prepaid prior to such time under
Section 2.2, Section 2.3 and Section 2.4 and under the provisions of the
Intercreditor Agreement requiring the offer of prepayment of the Notes with
insurance proceeds and condemnation proceeds.
"REMNANT EQUITY EVENT PREPAYMENT" is defined in Section 2.3(b).
"REMNANT EXCESS CASH FLOW PREPAYMENT" is defined in Section 2.4(b).
"RENTALS" shall mean and include, 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 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.
"REPORTABLE EVENT" shall mean a reportable event within the meaning of
section 4043(c) of ERISA other than an event for which the 30-day notice period
is waived under applicable Department of Labor regulations.
"RESPONSIBLE OFFICER" shall mean any Senior Financial Officer and any
other officer of the Parent or the Issuer, as the case may be, with
responsibility for the administration of the relevant portion of this Agreement
or the Parent Guaranty Agreement.
"RESTRICTED GROUP" shall mean, as of any date of determination thereof,
the Parent and the Restricted Subsidiaries.
"RESTRICTED PAYMENTS" shall mean
(a) 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;
70
(b) 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
any shares of capital stock or other Equity Interests of any member of
the Restricted Group;
(c) 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
(d) the prepayment of any Debt (other than Debt secured
by Liens described in Section 5.10(h)), except as contemplated herein;
provided, however, that "Restricted Payments" shall not include any such
dividends, purchases, redemptions, retirements, payments, distributions or
prepayments by any member of the Restricted Group to the Parent or by a
Restricted Subsidiary to a Wholly-Owned Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" shall mean, at any time, any Subsidiary (a)
which is at such time organized under the laws of the United States, Puerto
Rico, Canada or any Qualifying EU Jurisdiction or any jurisdiction of any of the
foregoing; (b) which at such time 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 at such time beneficially owned by the Parent
or any Wholly-Owned Restricted Subsidiary (or any combination thereof); (d)
which has been designated by the board of directors of the Parent as a
Restricted Subsidiary at or prior to such time in accordance with Section 5.17
and (e) which shall have (i) guarantied the Notes pursuant to a guaranty
agreement substantively in the form of the Subsidiary Guaranty Agreement and
(ii) granted Liens on substantially all of its assets for the benefit of the
holders of the Secured Obligations pursuant to documents substantially in the
form of the Security Documents.
"RESTRUCTURING FEE" is defined in Section 4.17.
"SECURED OBLIGATIONS" shall mean the "Secured Obligations" as such term
is defined in the Collateral Trust Indenture.
"SECURED PRIORITY DEBT" is defined in Section 5.9(a)(ii).
"SECURITIES ACT" shall mean the United States Securities Act of 1933,
as amended from time to time.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act.
"SECURITY AGREEMENT" is defined in Section 4.5(d).
"SECURITY DOCUMENTS" means the Collateral Trust Indenture, the
Mortgages, the Security Agreement, the Pledge Agreement, the Canadian Security
Documents, the U.S. Environmental Indemnification Agreement, the Canadian
Environmental Indemnification Agreement and the other agreements and instruments
executed or to be executed pursuant to the terms of each of such Security
Documents or which grant Liens to the U.S. Collateral Trustee or the Canadian
71
Collateral Trustee securing the obligations of any member of the Restricted
Group under any of this Agreement, the Notes, the Parent Guaranty Agreement or
the Subsidiary Guaranty Agreement, as the case may be, as each may be amended,
supplemented or otherwise modified from time to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Parent or of the Issuer, as
the case may be.
"SENIOR OFFICER" means the chief executive officer or the chief
financial officer of the Parent.
"SERIES" shall mean any one or both of the Series A Notes, taken
together, and the Series B Notes, taken together.
"SERIES A NOTES" is defined in Section 1.2.
"SERIES B NOTES" is defined in Section 1.2.
"SOURCE" is defined in Section 3.2.
"STANDARD & POOR'S" shall mean Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries directly or indirectly owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity. Unless the
context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Parent and such "Subsidiary" shall include a
limited partnership, the general partner of which is the Parent or one or more
of its Subsidiaries.
"SUBSIDIARY GUARANTY AGREEMENT" is defined in Section 1.5.
"SUBSIDIARY PRIORITY DEBT" is defined in Section 5.9(a)(ii).
"TAX PERCENTAGE LIMIT" shall mean, at any time and in respect of the
principal amount of any prepayment, (a) 100% if such time is after the fifth
anniversary of the Original Closing Date or (b) if such time is on or before the
fifth anniversary of the Original Closing Date, the lesser of (i) 100% and (ii)
a fraction, expressed as a percentage, the numerator of which is the Remaining
Tax Prepayment Amount at such time and the denominator of which is the principal
amount of such prepayment.
"TOTAL DEBT" shall mean, as of any date of determination, the sum of
(a) 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 Guarantied by any member of the Restricted Group), determined on a
consolidated basis for the Restricted Group, plus (b) the greater of (i) the
stated
72
value of all preferred shares or (ii) the voluntary or involuntary liquidation
value of all preferred shares, as issued by a member of the Restricted Group
then outstanding (other than any such preferred shares held by another member of
the Restricted Group), less (c) Available Cash as of such date.
"UNRESTRICTED SUBSIDIARY" shall mean any Subsidiary of the Parent which
is an Inactive Subsidiary or which is not otherwise a Restricted Subsidiary, a
list of which, as of the Effective Date, is included as part of Annex E to
Exhibit B-2, or as may be determined by the Parent at any later date.
"U.S. COLLATERAL" shall mean the "U.S. Collateral" as such term is
defined in the Collateral Trust Indenture.
"U.S. COLLATERAL TRUSTEE" shall mean "Collateral Trustee", as such term
is defined in the Collateral Trust Indenture.
"U.S. ENVIRONMENTAL INDEMNIFICATION AGREEMENT" is defined in Section
4.6(b).
"U.S. MORTGAGES" is defined in Section 4.5(b).
"VOTING STOCK" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
whether through the ownership of stock, partnership interests, by contract or
otherwise, to elect a majority of the board of directors (or Persons performing
similar functions).
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" shall mean any Restricted
Subsidiary of which all of the issued and outstanding equity interests (except
directors' qualifying shares or similar equity and voting interests as required
by law) of which shall be owned directly or indirectly by the Parent or one or
more of the Parent's other Wholly-Owned Restricted Subsidiaries, or any
combination of the Parent and one or more other Wholly-Owned Restricted
Subsidiaries.
8.2. ACCOUNTING PRINCIPLES.
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement.
8.3. DIRECTLY OR INDIRECTLY.
Where any provision in this 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.
73
9. MISCELLANEOUS
9.1. REGISTERED NOTES.
The Issuer shall cause to be kept at its principal office a register
for the registration and transfer of the Notes (hereinafter called the "NOTE
REGISTER") and the Issuer will register or transfer or cause to be registered or
transferred as hereinafter provided any Note.
At any time and from time to time the registered holder of any Note
which has been duly registered as hereinabove provided may transfer such Note
upon surrender thereof at the principal office of the Issuer duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
9.2. EXCHANGE OF NOTES.
At any time and from time to time, upon not less than ten days' notice
to that effect given by the holder of any Note initially delivered or of any
Note substituted therefor pursuant to Section 9.1, this Section 9.2 or Section
9.3, and, upon surrender of such Note at its office, the Issuer will deliver in
exchange therefor, without expense to such holder, except as set forth below, a
Note of the same Series for the same aggregate principal amount as the then
unpaid principal amount of the Note so surrendered, or Notes of the same Series
aggregating such unpaid principal amount in the denomination of U.S. $500,000
(or such lesser amount as shall constitute 100% of the Notes of such holder) or
any amount in excess thereof as such holder shall specify, dated as of the date
to which interest has been paid on the Note so surrendered or, if such surrender
is prior to the payment of any interest thereon, then dated as of the date of
issue, registered in the name of such Person or Persons as may be designated by
such holder, and otherwise of the same form, series and tenor as the Notes so
surrendered for exchange. The Issuer may require the payment of a sum sufficient
to cover any stamp tax or governmental charge imposed upon such exchange or
transfer.
9.3. LOSS, THEFT, ETC. OF NOTES.
Upon receipt of evidence satisfactory to the Issuer of the loss, theft,
mutilation or destruction of any Note, and in the case of any such loss, theft
or destruction upon delivery of a bond of indemnity in such form and amount as
shall be reasonably satisfactory to the Issuer, or in the event of such
mutilation upon surrender and cancellation of the Note, the Issuer will make and
deliver without expense to the holder thereof, a new Note, of like tenor and
series, in lieu of such lost, stolen, destroyed or mutilated Note. If the
Noteholders, any subsequent Institutional Holder which is an insurance company
or any other Institutional Holder which has a net worth in excess of U.S.
$50,000,000 is the owner of any such lost, stolen or destroyed Note, then the
affidavit of an authorized officer of such owner, setting forth the fact of
loss, theft or destruction and of its ownership of such Note at the time of such
loss, theft or destruction shall be accepted
74
as satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Issuer.
9.4. EXPENSES; STAMP TAX AND OTHER INDEMNITY.
Whether or not the transactions herein contemplated shall be
consummated, the Obligors, jointly and severally, agree to pay directly all of
the Noteholders' out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to (a) the reasonable charges and
disbursements of Xxxxxxx Xxxx LLP, special counsel to the Noteholders, (b)
duplicating and printing costs and charges for shipping the Notes (if so
required), adequately insured to the Noteholders at each Noteholder's home
office or at such other place as such Noteholder may designate, (c) the fees and
costs incurred in connection with the initial filing of this Agreement and all
related documents and financial information, and all subsequent annual and
interim filings of documents and financial information related to this
Agreement, with the Securities Valuation Office of the NAIC or any successor
organization acceding to the authority thereof, and (d) all such reasonable
expenses (including the fees and expenses of any investment banker or financial
consultant) relating to any proposed or actual amendment, waivers or consents
pursuant to the provisions hereof, including, without limitation, any
amendments, waivers, or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by any Obligor of its obligations
under any Financing Document to which it is a party. The Obligors, jointly and
severally, also agree that they will pay and save each Noteholder harmless
against any and all liability with respect to stamp and other taxes, if any,
which may be payable or which may be determined to be payable in connection with
the execution and delivery of this Agreement, the Notes, or any other Financing
Document, whether or not any Notes are then outstanding. The Obligors, jointly
and severally, agree to protect and indemnify each Noteholder against any
liability for any and all brokerage fees and commissions payable or claimed to
be payable to any Person in connection with the transactions contemplated by
this Agreement and the other Financing Documents (other than those expressly
retained by such Noteholder). The Obligors, jointly and severally, agree to
indemnify each Noteholder, the U.S. Collateral Trustee and the Canadian
Collateral Trustee 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 of them for or in connection
with (i) the participation of any of the Noteholders in the transactions
contemplated by this Agreement and the other Financing Documents, (ii) the role
of any of the Noteholders in any investigation, litigation or other proceeding
brought or threatened by any third party and relating to the Parent or any of
its Subsidiaries, and/or (iii) the compliance with or enforcement of any of
their rights or obligations hereunder, including, without limitation (A) the
reasonable fees and disbursements of counsel and (B) the costs of defending,
counterclaiming or claiming against third parties in respect of any action or
matter and any cost, liability or damage arising out of any settlement, in each
case 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.
75
9.5. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE.
No delay or failure on the part of the holder of any Note in the
exercise of any power or right shall operate as a waiver thereof; nor shall any
single or partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to, and are not exclusive of,
any rights or remedies any such holder would otherwise have.
9.6. NOTICES.
All communications provided for hereunder shall be in writing and, if
to a Noteholder, delivered or mailed prepaid by registered or certified mail or
overnight air courier, or by facsimile communication followed (on the date of
transmission) by overnight air courier, in each case addressed to each
Noteholder at such Noteholder's address appearing on Schedule I to this
Agreement or such other address as such Noteholder or the subsequent holder of
any Note initially issued to such Noteholder may designate to the Parent in
writing, and if to the Parent or the Issuer, delivered or mailed by registered
or certified mail or overnight air courier, or by facsimile communication
followed (on the date of transmission) by overnight air courier, to the Parent
or to the Issuer at 110E Xxxxxx xx Xxxxxx, St. Laurent, Quebec, Canada X0X XX0,
Attention: Vice President, Finance, Fax No. 000-000-0000, with a copy to
Stikeman Elliott, 0000 Xxxx Xxxxxxxx Xxxx Xxxx., Xxxxx 0000, Xxxxxxxx, Xxxxxx,
Xxxxxx H3B 3V2, Attention: Xxxxxxx X. Xxxxxxxx, Esq., Fax No. 000-000-0000, and
to Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn:
Xxxxx Xxxxxxx, Esq., Fax No. 000-000-0000 or to such other address as the Parent
or the Issuer may in writing designate to the Noteholders or to a subsequent
holder of the Note initially issued to a Noteholder, provided that the failure
to provide copies of any such notices to the parties set forth above or to
provide any other copies shall not invalidate any notice provided to the Parent
or the Issuer pursuant to the terms of this Section 9.6; provided, further, that
a notice to a Noteholder by overnight air courier shall only be effective if
delivered to such Noteholder at a street address designated for such purpose in
Schedule I, and a notice to a Noteholder by facsimile communication shall only
be effective if made by confirmed transmission to such Noteholder at a telephone
number designated for such purpose in Schedule I and followed (on the day of
transmission) by overnight air courier, or, in either case, as such Noteholder
or a subsequent holder of any Note initially issued to such Noteholder may
designate to the Obligors in writing.
9.7. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon each party hereto and its
successors and assigns and shall inure to the benefit of each party hereto and
its successors and assigns, including each successive holder or holders of any
Notes.
9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS.
All covenants, representations and warranties made by any party herein
and in any certificates delivered pursuant hereto, whether or not in connection
with the Effective Date, shall survive the delivery of this Agreement and the
Notes.
76
9.9. SEVERABILITY.
Should any part of this Agreement for any reason be declared invalid or
unenforceable, such decision shall not affect the validity or enforceability of
any remaining portion, which remaining portion shall remain in force and effect
as if this Agreement had been executed with the invalid or unenforceable portion
thereof eliminated and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement without
including therein any such part, parts or portion which may, for any reason, be
hereafter declared invalid or unenforceable.
9.10. GOVERNING LAW.
This Agreement and the Notes issued and sold hereunder shall be
governed by and construed in accordance with New York law, excluding choice of
law principles of the law of such State that would require the application of
the laws of a jurisdiction other than such State.
9.11. JURISDICTION AND SERVICE IN RESPECT OF ISSUER AND PARENT.
Any legal action or proceeding with respect to this Agreement, the
Notes, any Guaranty 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 Parent and the Issuer hereby ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE ISSUER AND THE PARENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, 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 ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. EACH OF THE ISSUER, THE PARENT AND EACH HOLDER OF A NOTE HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY.
Each of the Issuer and the Parent further consents that all service of
process may be made by delivery to it at the address of the Issuer or the
Parent, as the case may be, set forth in Section 9.6 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 Issuer and
the Parent 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 9.11 shall affect the right of any
holder of Notes 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
Issuer or the Parent, or to enforce a judgment obtained in the courts of any
other jurisdiction.
9.12. PAYMENTS FREE AND CLEAR OF TAXES.
The Obligors, for the benefit of those holders of the Notes which are
residents, citizens or domestic corporations of the United States of America at
the time of any payment made by an Obligor hereunder (the "RELEVANT HOLDERS"),
agree that in the event any such payments made
77
by an Obligor under the Notes, this Agreement, a Guaranty Agreement or any other
Financing Document are subject to any present or future tax, duty, assessment,
impost, levy or other similar charge (a "RELEVANT TAX") imposed, levied,
collected, assessed, deducted or withheld by the government of Canada (or any
authority therein or thereof) or by the government of any other country or
jurisdiction (or any authority therein or thereof) other than the United States
(or any authority therein or thereunder) from or through which payments
hereunder are actually made (each a "TAXING JURISDICTION"), the Obligors will
pay to the Relevant Holder such additional amounts (the "ADDITIONAL AMOUNTS") as
may be necessary in order that the net amounts paid to such Relevant Holder
pursuant to the terms of this Agreement, such Notes, the Guaranty Agreements and
the other Financing Documents after imposition of any such Relevant Tax
(including, without limitation, any Relevant Tax on such Additional Amounts)
shall be not less than the amounts specified in this Agreement to be then due
and payable (after giving effect to the exclusion for Relevant Taxes imposed by
the government of the United States (or any authority therein or thereunder) as
described above), except that no such Additional Amounts shall be payable in
respect of this Agreement, any Note, a Guaranty Agreement or any other Financing
Document to a Relevant Holder which is liable for such Relevant Tax in respect
of this Note Agreement, such Notes, such Guaranty Agreement or such other
Financing Document solely by reason of such Relevant Holder being resident or
being deemed resident in such Taxing Jurisdiction or carrying on business or
being deemed to carry on business in such Taxing Jurisdiction or having some
other business connection with such Taxing Jurisdiction other than, in the case
of Canada, the mere holding of this Agreement, such Notes, such Guaranty
Agreement or such other Financing Document or the receipt of principal or
interest in respect thereof.
9.13. CURRENCY OF PAYMENTS; JUDGMENTS.
Any payment made by any member of the Restricted Group to any holder of
the Notes or for the account of any such holder in respect of any amount payable
by such member of the Restricted Group (including any payments under the
Guaranty Agreements or any other Financing Document) shall be made in U.S.
Dollars. Any payment made by such member of the Restricted Group to any holder
of Notes or for the account of any such holder in respect of any amount payable
by such member of the Restricted Group in lawful currency of the United States
of America, which payment is made in Canadian dollars or other foreign currency,
whether pursuant to any judgment or order of any court or tribunal or otherwise,
shall constitute a discharge of the obligations of such member of the Restricted
Group only to the extent of the amount of lawful currency of the United States
of America which may be purchased with such Canadian dollars or other foreign
currency on the date of payment (or if it is not practicable to make the
purchase on such date, on the first day on which it is practicable to do so);
provided that any such conversion of a foreign currency into lawful currency of
the United States shall be calculated as of the date such payment is received by
such holder. If the amount of U.S. Dollars so purchased is less than the amount
of U.S. Dollars expressed to be due hereunder or under the Notes or under such
other Financing Document, the Obligors shall indemnify such holder against any
loss sustained by such holder as a result hereunder or under the Notes or such
other Financing Document; and in any event, the Obligors shall indemnify such
holder against the reasonable cost of making any such purchase. These
indemnities shall constitute a separate and independent obligation from the
other obligations herein, in the Notes, the Guaranty Agreements and the other
Financing Documents, shall give rise to a separate and independent cause of
action,
78
shall apply irrespective of any indulgence granted by any such holder, shall
continue in full force and effect despite any judgment, order, claim or proof
for a liquidated amount in respect of any such sum due hereunder, under any
Note, under any Guaranty Agreement, or under any other Financing Document and
shall survive the payment of the Notes and the termination of this Agreement and
the other Financing Documents.
9.14. CAPTIONS.
The descriptive headings of the various Sections or parts of this
Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
9.15. POWER OF ATTORNEY FOR QUEBEC PURPOSES.
For greater certainty, and without limiting the powers of the U.S.
Collateral Trustee or the Canadian Collateral Trustee under the Security
Documents, each of the Noteholders hereby acknowledges that the Canadian
Collateral Trustee 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), 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 holders of the
Notes and holders of debentures. Each of the Noteholders hereby constitutes, to
the extent necessary, the Canadian Collateral Trustee 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 of the Notes shall be
deemed to have confirmed and ratified the constitution of the Canadian
Collateral Trustee as the holder of such irrevocable power of attorney (fonde de
pouvoir). Notwithstanding the provisions of Section 32 of the Special Powers of
Legal Persons Act (Quebec), the Canadian Collateral Trustee may acquire and be
the holder of a debenture (or any similar instrument). Each of the Obligors
hereby acknowledges that a debenture executed by it constitutes a title of
indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec.
Notwithstanding the provisions of Section 9.10, the provisions of this Section
9.15 shall be governed by the laws of the Province of Quebec and the federal
laws of Canada applicable therein.
9.16. INTEREST PROVISIONS.
(a) Interest Act (Canada). Solely for purposes of the Interest
Act (Canada) and in respect of all or any portion of a calendar year,
the annual rate of interest to which any interest rate herein is equal
is such rate multiplied by a fraction, the numerator of which is the
total number of days in such year and the denominator of which is 360.
(b) Criminal Code (Canada). If any provision of this Agreement
or any other Financing Document would obligate any member of the
Restricted Group to make any payment of interest or other amount
payable to the holders of the Notes in an amount or calculated at a
rate which would be prohibited by law or would result in a receipt by
the holders of the Notes of interest at a criminal rate (as construed
under the Criminal Code (Canada)), then, notwithstanding such
provision, such amount or rate shall be deemed to
79
have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by
law or result in a receipt by the holders of the Notes of interest at
a criminal rate, the adjustment to be effected, to the extent
necessary, as follows: (i) firstly, by reducing the amount or rate of
interest required to be paid to the holders of the Notes, and (ii)
thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid to the holders of the Notes which would
constitute interest for purposes of Section 347 of the Criminal Code
(Canada). Any amount or rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles
as an effective annual rate of interest over the term that the Notes
remain outstanding on the assumption that any charges, fees or
expenses that fall within the meaning of interest (as defined in the
Criminal Code (Canada)) shall, if they relate to a specific period of
time, be prorated over such period of time and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Majority Noteholders, shall be conclusive
for the purposes of such determination, absent manifest error.
(c) 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 Canadian Bankruptcy and Insolvency Act, or files a
petition under the US Bankruptcy Code, or if the Parent 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 rights of the
holders of the Notes to contest such stay of proceedings, the Issuer
covenants and agrees to continue to pay interest on all amounts due to
the holders of the Notes. In this regard, the Issuer acknowledges that
permitting the Issuer to continue to use the proceeds of the Notes
constitutes valuable consideration provided after the filing of any
such proceeding in the same way that permitting the Issuer to use
leased premises constitutes such valuable consideration.
9.17. LANGUAGE.
The parties hereby confirm their express intent that this Agreement,
the Guaranty Agreements, the Notes, the other Financing Documents and all
documents and agreements directly and indirectly related thereto be written in
English.
Les parties reconnaissent leur volonte expresse que la presente
convention, les billets ainsi que les documents et convention qui sly rattachent
directement ou indirectement soient rediges en anglais.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. NEXT PAGE IS SIGNATURE PAGE.]
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The execution hereof by the Noteholders shall constitute a contract
between the Noteholders, the Parent, the Issuer and the General Partner for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
INTERTAPE POLYMER GROUP INC.
LE GROUPE INTERTAPE POLYMER INC.
By: /s/ Xxxxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President Finance
IPG HOLDINGS LP
BY: INTERTAPE POLYMER INC., ITS GENERAL PARTNER
By: /s/ Xxx Xxx Xxxxxxxxx
------------------------------------
Name: Xxx Xxx Xxxxxxxxx
Title: President
INTERTAPE POLYMER INC.
By: /s/ Xxxxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Assistant Secretary
ACCEPTED AND AGREED:
PRINCIPAL LIFE INSURANCE COMPANY
BY: PRINCIPAL CAPITAL MANAGEMENT, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
ITS AUTHORIZED SIGNATORY
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Counsel
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Counsel
[Signature Page to Amended and Restated 1999 Note Agreement]
PRINCIPAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY: PRINCIPAL CAPITAL MANAGEMENT, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
ITS AUTHORIZED SIGNATORY
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Counsel
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Counsel
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY,
A WISCONSIN CORPORATION
By: /s/ Xxxxx X. Xxxxxx....
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Its Authorized Representative
NEW YORK LIFE INSURANCE COMPANY
By: /s/ A. Post Xxxxxxx....
----------------------------------------
Name: A. Post Xxxxxxx
Title: Investment Vice President
J. ROMEO & CO.
By: /s/ Xxxxx Xxxxxx.......
-------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Partner
HARE & CO.
By: /s/ Xxxxxxx X. Xxxxxx..
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized IM Representative
[Signature Page to Amended and Restated 1999 Note Agreement]
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx, XX
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx, XX
Title: Vice President
C.M. LIFE INSURANCE COMPANY
BY: XXXXX X. XXXXXX & COMPANY INC. AS INVESTMENT SUB-ADVISER
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
BY: XXXXX X. XXXXXX & COMPANY INC. AS INVESTMENT ADVISER
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
BY: CIGNA INVESTMENTS, INC. (AUTHORIZED AGENT)
By: /s/ Xxxxx X. Height
-------------------------------
Name: Xxxxx X. Height
Title: Managing Director
NORTHERN LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ Xxxxx X. Xxxxxxx...
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ Xxxxx X. Xxxxxxx...
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
[Signature Page to Amended and Restated 1999 Note Agreement]
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ Xxxxx X. Xxxxxxx...
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SECURITY-CONNECTICUT LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ Xxxxx X. Xxxxxxx...
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
[Signature Page to Amended and Restated 1999 Note Agreement]
EXHIBIT A-1
[FORM OF SENIOR SECURED NOTE, SERIES A, DUE 2005]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
IPG HOLDINGS LP
AMENDED AND RESTATED SENIOR SECURED NOTE, SERIES A, DUE
MAY 31, 2005
No. R-[__] [Date]
$[_______] PPN: 44981# AE 7
IPG HOLDINGS LP, a Delaware limited partnership (the "ISSUER"), for
value received, hereby promises to pay to [_________________], or its registered
assigns, on the 31st day of May, 2005, the principal amount of
[__________________] U.S. DOLLARS ($[_________]) and to pay interest (computed
on the basis of a 360-day year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon, computed in the manner provided in
Section 2.1 of the Note Agreement (defined below), payable semiannually on the
last day of each May and November in each year (commencing on May 31, 2002) and
at maturity. The Issuer agrees to pay interest on overdue principal (including
any overdue required or optional prepayment of principal) and Make-Whole Amount,
if any, and (to the extent legally enforceable) on any overdue installment of
interest, both before and after demand and judgment, at a rate equal to the
Applicable Default Rate (as defined in the Note Agreement). Payments of
principal of, interest on and any Make-Whole Amount with respect to this Note
are to be made in lawful money of the United States of America at Citibank,
N.A., in New York, New York or at such other place in the State of New York as
the Issuer shall have designated by written notice to the holder of this Note as
provided in the Note Agreement referred to below.
This Note is one of an issue of Notes of the Issuer issued in an
aggregate principal amount of U.S. $137,000,000, consisting of $25,000,000 in
aggregate principal amount of the Issuer's Amended and Restated Senior Secured
Notes, Series A, due May 31, 2005 and $112,000,000 in aggregate principal amount
of the Issuer's Amended and Restated Senior Secured Notes, Series B, due May 31,
2009 (collectively, as may be amended from time to time, the "NOTES"), pursuant
to the terms and provisions of that certain Amended and Restated Note Agreement,
dated as of December 20, 2001 (as may be amended from time to time, the "NOTE
AGREEMENT"), entered into by the Issuer, Intertape Polymer, Inc., a Canadian
corporation and general partner of the Issuer and Intertape Polymer Group Inc.,
a Canadian corporation, and the purchasers named therein. This Note and the
holder hereof are entitled equally and ratably with the holders of all other
Notes outstanding under the Note Agreement to all the benefits provided by the
Note Agreement. Reference is hereby made to the Note Agreement for a statement
of
Exhibit A-1-1
such rights and benefits. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in ss.5.18 of the Note Agreement and (ii) to have made the representation
set forth in ss.3.2 of the Note Agreement.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Issuer prior to its expressed maturity date except on the terms and
conditions and in the amounts and with the Make-Whole Amount, if any, set forth
in the Note Agreement.
The payment of all principal of, premium, if any, and interest in this
Note and the other Notes outstanding under the Note Agreement has been
unconditionally guaranteed, and has the benefit of security, in each case as
contemplated by the Note Agreement. Reference is hereby made thereto for a
statement of the rights and benefits accorded thereby.
This Note is registered on the books of the Issuer and is transferable
only by surrender thereof at the principal office of the Issuer duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of this Note or its attorney duly authorized in writing. Payment of or on
account of principal, Make-Whole Amount, if any, and interest on this Note shall
be made only to or upon the order in writing of the registered holder.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
IPG HOLDINGS LP
BY: INTERTAPE POLYMER INC.,
ITS GENERAL PARTNER
By: __________________________
Name:
Title:
Exhibit X-0-0
XXXXXXX X-0
[FORM OF SENIOR SECURED NOTE, SERIES B, DUE 2009]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
IPG HOLDINGS LP
AMENDED AND RESTATED SENIOR SECURED NOTE, SERIES B, DUE
MAY 31, 2009
No. R-[__] [Date]
$[_______] PPN: 44981# AF 4
IPG HOLDINGS LP, a Delaware limited partnership (the "ISSUER"), for
value received, hereby promises to pay to [_________________], or its registered
assigns, on the 31st day of May, 2009, the principal amount of
[__________________] U.S. DOLLARS ($[_________]) and to pay interest (computed
on the basis of a 360-day year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon, computed in the manner provided in
Section 2.1 of the Note Agreement (defined below), payable semiannually on the
last day of each May and November in each year (commencing on May 31, 2002) and
at maturity. The Issuer agrees to pay interest on overdue principal (including
any overdue required or optional prepayment of principal) and Make-Whole Amount,
if any, and (to the extent legally enforceable) on any overdue installment of
interest, both before and after demand and judgment, at a rate equal to the
Applicable Default Rate (as defined in the Note Agreement). Payments of
principal of, interest on and any Make-Whole Amount with respect to this Note
are to be made in lawful money of the United States of America at Citibank,
N.A., in New York, New York or at such other place in the State of New York as
the Issuer shall have designated by written notice to the holder of this Note as
provided in the Note Agreement referred to below.
This Note is one of an issue of Notes of the Issuer issued in an
aggregate principal amount of U.S. $137,000,000, consisting of $25,000,000 in
aggregate principal amount of the Issuer's Amended and Restated Senior Secured
Notes, Series A, due May 31, 2005 and $112,000,000 in aggregate principal amount
of the Issuer's Amended and Restated Senior Secured Notes, Series B, due May 31,
2009 (collectively, as may be amended from time to time, the "NOTES"), pursuant
to the terms and provisions of that certain Amended and Restated Note Agreement,
dated as of December 20, 2001 (as may be amended from time to time, the "NOTE
AGREEMENT"), entered into by the Issuer, Intertape Polymer, Inc., a Canadian
corporation and general partner of the Issuer and Intertape Polymer Group Inc.,
a Canadian corporation, and the purchasers named therein. This Note and the
holder hereof are entitled equally and ratably with the holders of all other
Notes outstanding under the Note Agreement to all the benefits provided by the
Note Agreement. Reference is hereby made to the Note Agreement for a statement
of
Exhibit 4.6(c)-1
such rights and benefits. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in ss.5.18 of the Note Agreement and (ii) to have made the representation
set forth in ss.3.2 of the Note Agreement.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Issuer prior to its expressed maturity date except on the terms and
conditions and in the amounts and with the Make-Whole Amount, if any, set forth
in the Note Agreement.
The payment of all principal of, premium, if any, and interest in this
Note and the other Notes outstanding under the Note Agreement has been
unconditionally guaranteed, and has the benefit of security, in each case as
contemplated by the Note Agreement. Reference is hereby made thereto for a
statement of the rights and benefits accorded thereby.
This Note is registered on the books of the Issuer and is transferable
only by surrender thereof at the principal office of the Issuer duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of this Note or its attorney duly authorized in writing. Payment of or on
account of principal, Make-Whole Amount, if any, and interest on this Note shall
be made only to or upon the order in writing of the registered holder.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
IPG HOLDINGS LP
BY: INTERTAPE POLYMER INC.,
ITS GENERAL PARTNER
By: __________________________
Name:
Title:
Exhibit 4.6(c)-2
