================================================================================
MULTICURRENCY CREDIT AGREEMENT
DATED AS OF OCTOBER 29, 0000
XXXXX
XXXXXX XXXXXXXXXXX,
XXXXXX XXXXXXXXXX XXXXXX INC.
THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
as Administrative Agent,
AND
BANK OF MONTREAL,
as Canadian Co-Agent
================================================================================
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE CREDIT FACILITIES......................................1
Section 1.1. Term Loan Commitments......................................1
Section 1.2. Revolving Credit Commitments...............................1
Section 1.3. Letters of Credit..........................................2
Section 1.4. Applicable Interest Rates..................................4
Section 1.5. Minimum Borrowing Amounts; Maximum Eurocurrency Loans......7
Section 1.6. Manner of Borrowing Loans and Designating Applicable
Interest Rates..........................................7
Section 1.7. Interest Periods..........................................10
Section 1.8. Maturity of Loans.........................................11
Section 1.9. Prepayments...............................................12
Section 1.10. Default Rate..............................................14
Section 1.11. The Notes.................................................14
Section 1.12. Funding Indemnity.........................................15
Section 1.13. Commitment Terminations...................................15
Section 1.14. Substitution of Lenders...................................16
Section 1.15. Appointment of Parent as Agent for Borrowing Subsidiary...16
SECTION 2. FEES......................................................17
Section 2.1. Fees......................................................17
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.........................17
Section 3.1. Place and Application of Payments.........................17
SECTION 4. GUARANTIES................................................19
Section 4.1. Guaranties................................................19
Section 4.2. Further Assurances........................................19
SECTION 5. DEFINITIONS; INTERPRETATION...............................20
Section 5.1. Definitions...............................................20
Section 5.2. Interpretation............................................30
Section 5.3. Change in Accounting Principles...........................30
SECTION 6. REPRESENTATIONS AND WARRANTIES............................31
Section 6.1. Organization and Qualification............................31
Section 6.2. Subsidiaries..............................................31
Section 6.3. Authority and Validity of Obligations.....................32
Section 6.4. Use of Proceeds; Margin Stock.............................32
-i-
Section 6.5. Financial Reports.........................................32
Section 6.6. No Material Adverse Change................................33
Section 6.7. Full Disclosure...........................................33
Section 6.8. Trademarks, Franchises, and Licenses......................33
Section 6.9. Governmental Authority and Licensing......................34
Section 6.10. Good Title................................................34
Section 6.11. Litigation and Other Controversies........................34
Section 6.12. Taxes.....................................................34
Section 6.13. Approvals.................................................34
Section 6.14. Affiliate Transactions....................................35
Section 6.15. Investment Company; Public Utility Holding Company........35
Section 6.16. ERISA.....................................................35
Section 6.17. Compliance with Laws......................................35
Section 6.18. Other Agreements..........................................35
Section 6.19. Boomerang Acquisition.....................................36
Section 6.20. No Default................................................36
SECTION 7. CONDITIONS PRECEDENT......................................36
Section 7.1. All Credit Events.........................................37
Section 7.2. Initial Credit Event......................................37
SECTION 8. COVENANTS.................................................39
Section 8.1. Maintenance of Business...................................39
Section 8.2. Maintenance of Properties.................................39
Section 8.3. Taxes and Assessments.....................................39
Section 8.4. Insurance.................................................39
Section 8.5. Financial Reports.........................................39
Section 8.6. Inspection................................................41
Section 8.7. Borrowings and Guaranties.................................41
Section 8.8. Liens.....................................................42
Section 8.9. Investments, Acquisitions, Loans and Advances.............43
Section 8.10. Mergers, Consolidations and Sales.........................45
Section 8.11. Dividends and Certain Other Restricted Payments...........46
Section 8.12. ERISA.....................................................46
Section 8.13. Compliance with Laws......................................46
Section 8.14. Burdensome Contracts With Affiliates......................46
Section 8.15. No Changes in Fiscal Year.................................46
Section 8.16. Formation of Subsidiaries.................................47
Section 8.17. Change in the Nature of Business..........................47
Section 8.18. Use of Proceeds...........................................47
Section 8.19. No Restrictions...........................................47
Section 8.20. Combination Agreement.....................................47
Section 8.21. Insolvency Applications...................................47
Section 8.22. Financial Covenants.......................................48
-ii-
SECTION 9. EVENTS OF DEFAULT AND REMEDIES............................48
Section 9.1. Events of Default.........................................48
Section 9.2. Non-Bankruptcy Defaults...................................50
Section 9.3. Bankruptcy Defaults.......................................51
Section 9.4. Collateral for Undrawn Letters of Credit..................51
Section 9.5. Notice of Default.........................................52
Section 9.6. Expenses..................................................52
SECTION 10. CHANGE IN CIRCUMSTANCES...................................52
Section 10.1. Change of Law.............................................52
Section 10.2. Unavailability of Deposits or Inability to Ascertain,
or Inadequacy of, LIBOR................................53
Section 10.3. Increased Cost and Reduced Return.........................53
Section 10.4. Lending Offices...........................................54
Section 10.5. Discretion of Lender as to Manner of Funding..............55
SECTION 11. THE ADMINISTRATIVE AGENT..................................55
Section 11.1. Appointment and Authorization of Administrative Agent.....55
Section 11.2. Administrative Agent and its Affiliates...................55
Section 11.3. Action by Administrative Agent............................56
Section 11.4. Consultation with Experts.................................56
Section 11.5. Liability of Administrative Agent; Credit Decision........56
Section 11.6. Indemnity.................................................57
Section 11.7. Resignation of Administrative Agent and Successor
Administrative Agent...................................57
Section 11.8. Canadian Co-Agent and L/C Issuer..........................58
Section 11.9. Hedging Liability and Funds Transfer and Deposit
Account Liability Arrangements.........................58
Section 11.10. Designation of Additional Agents..........................58
SECTION 12. THE GUARANTEES............................................59
Section 12.1. The Guarantees............................................59
Section 12.2. Guarantee Unconditional...................................60
Section 12.3. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances..................................61
Section 12.4. Subrogation...............................................61
Section 12.5. Waivers...................................................61
Section 12.6. Limit on Recovery.........................................61
Section 12.7. Stay of Acceleration......................................62
Section 12.8. Benefit to Guarantors.....................................62
Section 12.9. Guarantor Covenants.......................................62
SECTION 13. MISCELLANEOUS.............................................62
Section 13.1. Withholding Taxes.........................................62
-iii-
Section 13.2. No Waiver, Cumulative Remedies............................64
Section 13.3. Non-Business Days.........................................64
Section 13.4. Documentary Taxes.........................................64
Section 13.5. Survival of Representations...............................64
Section 13.6. Survival of Indemnities...................................65
Section 13.7. Sharing of Set-Off........................................65
Section 13.8. Notices...................................................65
Section 13.9. Counterparts..............................................66
Section 13.10. Successors and Assigns....................................66
Section 13.11. Participants..............................................66
Section 13.12. Assignments...............................................66
Section 13.13. Amendments................................................68
Section 13.14. Headings..................................................68
Section 13.15. Costs and Expenses; Indemnification.......................68
Section 13.16. Set-off...................................................69
Section 13.17. Entire Agreement..........................................69
Section 13.18. Governing Law.............................................69
Section 13.19. Severability of Provisions................................69
Section 13.20. Excess Interest...........................................70
Section 13.21. Construction..............................................70
Section 13.22. Currency..................................................70
Section 13.23. Lender's Obligations Several..............................71
Section 13.24. Submission to Jurisdiction; Waiver of Jury Trial..........71
Section 13.25. USA Patriot Act...........................................71
Signature Page...............................................................S-1
EXHIBIT A -- Notice of Payment Request
EXHIBIT B -- Notice of Borrowing
EXHIBIT C -- Notice of Continuation/Conversion
EXHIBIT D-1 -- Term Note
EXHIBIT D-2 -- Revolving Note
EXHIBIT E -- Compliance Certificate
EXHIBIT F -- Additional Guarantor Supplement
EXHIBIT G -- Assignment and Acceptance
SCHEDULE 1 -- Commitments
SCHEDULE 6.2 -- Subsidiaries
SCHEDULE 8.7/8.8 -- Permitted Indebtedness and Liens
-iv-
MULTICURRENCY CREDIT AGREEMENT
This Multicurrency Credit Agreement is entered into as of October 29,
2004, by and among LOJACK CORPORATION, a Massachusetts corporation (the
"Parent"), LOJACK EXCHANGECO CANADA INC., a Canadian corporation (the "Borrowing
Subsidiary" and, together with the Parent, the "Borrowers" and individually a
"Borrower"), the direct and indirect Subsidiaries of the Parent from time to
time party to this Agreement, as Guarantors, the several financial institutions
from time to time party to this Agreement, as Lenders, XXXXXX TRUST AND SAVINGS
BANK, as Administrative Agent as provided herein, and BANK OF MONTREAL, as
Canadian Co-Agent as provided herein. All capitalized terms used herein without
definition shall have the same meanings herein as such terms are defined in
Section 5.1 hereof.
PRELIMINARY STATEMENT
The Borrowers have requested, and the Lenders have agreed to extend,
certain credit facilities on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. THE CREDIT FACILITIES.
Section 1.1. Term Loan Commitments. Subject to the terms and conditions
hereof, each Lender with a Term Loan Commitment (a "Canadian Lender"), by its
acceptance hereof, severally agrees to make a loan (individually a "Term Loan"
and collectively for all the Canadian Lenders the "Term Loans") in Canadian
Dollars to the Borrowing Subsidiary in the amount of such Canadian Lender's Term
Loan Commitment. The Term Loans shall be advanced in a single Borrowing on the
Closing Date and shall be made ratably by the Canadian Lenders in proportion to
their respective Term Loan Percentages, at which time the Term Loan Commitments
shall expire. As provided in Section 1.6(a) hereof, the Borrowing Subsidiary may
elect that the Term Loans be outstanding as Canadian Base Rate Loans or
Eurocurrency Loans denominated in Canadian Dollars. No amount repaid or prepaid
on any Term Loan may be borrowed again.
Section 1.2. Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender with a Revolving Credit Commitment, by its
acceptance hereof, severally agrees to make a loan or loans (individually a
"Revolving Loan" and collectively the "Revolving Loans") in U.S. Dollars to the
Parent from time to time on a revolving basis up to the amount of such Lender's
Revolving Credit Commitment, subject to any reductions thereof pursuant to the
terms hereof, before the Revolving Credit Termination Date. The sum of the
aggregate principal amount of Revolving Loans and L/C Obligations at any time
outstanding shall not exceed the Revolving Credit Commitments in effect at such
time. Each Borrowing of Revolving Loans shall be made ratably by the Lenders in
proportion to their respective Revolver Percentages. As provided in Section
1.6(a) hereof, the Parent may elect that each Borrowing of Revolving Loans
-1-
be either U.S. Base Rate Loans or Eurocurrency Loans. Revolving Loans may be
repaid and the principal amount thereof reborrowed before the Revolving Credit
Termination Date, subject to the terms and conditions hereof.
Section 1.3. Letters of Credit. (a) General Terms. Subject to the terms
and conditions hereof, as part of the Revolving Credit, the L/C Issuer shall
issue standby and commercial letters of credit (each a "Letter of Credit") for
the account of Parent in an aggregate undrawn face amount up to the L/C
Sublimit. Each Letter of Credit shall be issued by the L/C Issuer, but each
Lender shall be obligated to reimburse the L/C Issuer for such Lender's Revolver
Percentage of the amount of each drawing thereunder and, accordingly, each
Letter of Credit shall constitute usage of the Revolving Credit Commitment of
each Lender pro rata in an amount equal to its Revolver Percentage of the L/C
Obligations then outstanding.
(b) Applications. At any time before the Revolving Credit Termination
Date, the L/C Issuer shall, at the request of the Parent, issue one or more
Letters of Credit in U.S. Dollars, in a form satisfactory to the L/C Issuer,
with expiration dates no later than the earlier of 12 months from the date of
issuance (or which are cancelable not later than 12 months from the date of
issuance and each renewal) or the Revolving Credit Termination Date, in an
aggregate face amount as set forth above, upon the receipt of an application
duly executed by the Parent for the relevant Letter of Credit in the form then
customarily prescribed by the L/C Issuer for the Letter of Credit requested
(each an "Application"). Notwithstanding anything contained in any Application
to the contrary: (i) the Parent shall pay fees in connection with each Letter of
Credit as set forth in Section 2.1 hereof, (ii) except as otherwise provided in
Section 1.9 hereof, before the occurrence of an Event of Default, the L/C Issuer
will not call for the funding by the Parent of any amount under a Letter of
Credit before being presented with a drawing thereunder, and (iii) if the L/C
Issuer is not timely reimbursed for the amount of any drawing under a Letter of
Credit on the date such drawing is paid, the Parent's obligation to reimburse
the L/C Issuer for the amount of such drawing shall bear interest (which the
Parent hereby promises to pay) from and after the date such drawing is paid at a
rate per annum equal to the sum of the Applicable Margin plus the U.S. Base Rate
from time to time in effect (computed on the basis of a year of 360 days and the
actual number of days elapsed). If the L/C Issuer issues any Letter of Credit
with an expiration date that is automatically extended unless the L/C Issuer
gives notice that the expiration date will not so extend beyond its then
scheduled expiration date, unless the Required Lenders instruct the L/C Issuer
otherwise, the L/C Issuer will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date: (i) the expiration date of such Letter of Credit if so extended would be
after the Revolving Credit Termination Date, (ii) the Revolving Credit
Commitments have been terminated, or (iii) a Default or an Event of Default
exists and the Administrative Agent, at the request or with the consent of the
Required Lenders, has given the L/C Issuer instructions not to so permit the
extension of the expiration date of such Letter of Credit. The L/C Issuer agrees
to issue amendments to the Letter(s) of Credit increasing the amount, or
extending the expiration date, thereof at the request of the Parent subject to
the conditions of Section 7 hereof and the other terms of this Section 1.3.
(c) The Reimbursement Obligations. Subject to Section 1.3(b) hereof,
the obligation of the Parent to reimburse the L/C Issuer for all drawings under
a Letter of Credit (a "Reimbursement
-2-
Obligation") shall be governed by the Application related to such Letter of
Credit, except that reimbursement shall be made by no later than 12:00 Noon
(Chicago time) on the date when each drawing is to be paid if the Parent has
been informed of such drawing by the L/C Issuer on or before 11:30 a.m. (Chicago
time) on the date when such drawing is to be paid or, if notice of such drawing
is given to the Parent after 11:30 a.m. (Chicago time) on the date when such
drawing is to be paid, by the end of such day, in immediately available funds at
the Administrative Agent's principal office in Chicago, Illinois or such other
office as the Administrative Agent may designate in writing to the Parent (who
shall thereafter cause to be distributed to the L/C Issuer such amount(s) in
like funds). If the Parent does not make any such reimbursement payment on the
date due and the Participating Lenders fund their participations therein in the
manner set forth in Section 1.3(d) below, then all payments thereafter received
by the Administrative Agent in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 1.3(d) below.
(d) The Participating Interests. Each Lender (other than the Lender
acting as L/C Issuer in issuing the relevant Letter of Credit), by its
acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C
Issuer hereby agrees to sell to each such Lender (a "Participating Lender"), an
undivided percentage participating interest (a "Participating Interest"), to the
extent of its Revolver Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by the Parent
to pay any Reimbursement Obligation at the time required on the date the related
drawing is to be paid, as set forth in Section 1.3(c) above, or if the L/C
Issuer is required at any time to return to the Parent or to a trustee,
receiver, liquidator, custodian or other Person any portion of any payment of
any Reimbursement Obligation, each Participating Lender shall, not later than
the Business Day it receives a certificate in the form of Exhibit A hereto from
the L/C Issuer (with a copy to the Administrative Agent) to such effect, if such
certificate is received before 1:00 p.m. (Chicago time), or not later than 1:00
p.m. (Chicago time) the following Business Day, if such certificate is received
after such time, pay to the Administrative Agent for the account of the L/C
Issuer an amount equal to such Participating Lender's Revolver Percentage of
such unpaid or recaptured Reimbursement Obligation together with interest on
such amount accrued from the date the related payment was made by the L/C Issuer
to the date of such payment by such Participating Lender at a rate per annum
equal to: (i) from the date the related payment was made by the L/C Issuer to
the date 2 Business Days after payment by such Participating Lender is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date 2
Business Days after the date such payment is due from such Participating Lender
to the date such payment is made by such Participating Lender, the U.S. Base
Rate in effect for each such day. Each such Participating Lender shall
thereafter be entitled to receive its Revolver Percentage of each payment
received in respect of the relevant Reimbursement Obligation and of interest
paid thereon, with the L/C Issuer retaining its Revolver Percentage thereof as a
Lender hereunder. The several obligations of the Participating Lenders to the
L/C Issuer under this Section 1.3 shall be absolute, irrevocable, and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against the Parent, the L/C Issuer,
the Administrative Agent, any Lender or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any
-3-
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.3 shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Indemnification. The Participating Lenders shall, to the extent of
their respective Revolver Percentages, indemnify the L/C Issuer (to the extent
not reimbursed by the Parent) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the L/C Issuer's gross negligence or willful
misconduct) that the L/C Issuer may suffer or incur in connection with any
Letter of Credit issued by it. The obligations of the Participating Lenders
under this Section 1.3(e) and all other parts of this Section 1.3 shall survive
termination of this Agreement and of all Applications, Letters of Credit, and
all drafts and other documents presented in connection with drawings thereunder.
(f) Manner of Requesting a Letter of Credit. The Parent shall provide
at least five (5) Business Days' advance written notice to the Administrative
Agent of each request for the issuance of a Letter of Credit, such notice in
each case to be accompanied by an Application for such Letter of Credit properly
completed and executed by the Parent and, in the case of an extension or an
increase in the amount of a Letter of Credit, a written request therefor, in a
form acceptable to the Administrative Agent and the L/C Issuer, in each case,
together with the fees called for by this Agreement. The Administrative Agent
shall promptly notify the L/C Issuer of the Administrative Agent's receipt of
each such notice and the L/C Issuer shall promptly notify the Administrative
Agent and the Lenders of the issuance of the Letter of Credit so requested.
Section 1.4. Applicable Interest Rates. (a) U.S. Base Rate Loans. Each
U.S. Base Rate Loan made or maintained by a Lender shall bear interest (computed
on the basis of a year of 360 days and the actual days elapsed) on the unpaid
principal amount thereof from the date such Loan is advanced or continued, or
created by conversion from a Eurocurrency Loan, both before and after maturity
(whether by acceleration or otherwise), default, and judgment, until paid in
full at a rate per annum equal to the sum of the Applicable Margin plus the U.S.
Base Rate from time to time in effect, payable on the last day of its Interest
Period and at maturity (whether by acceleration or otherwise).
"U.S. Base Rate" means for any day the greater of: (i) the rate of
interest announced or otherwise established by the Administrative Agent from
time to time as its prime commercial rate as in effect on such day, with any
change in the U.S. Base Rate resulting from a change in said prime commercial
rate to be effective as of the date of the relevant change in said prime
commercial rate (it being acknowledged and agreed that such rate may not be the
Administrative Agent's best or lowest rate) and (ii) the sum of (x) the rate
determined by the Administrative Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the
Administrative Agent at approximately 10:00 a.m. (Chicago time) (or as soon
thereafter as is practicable) on such day (or, if such day is not a Business
Day, on the immediately preceding Business Day) by two or more Federal funds
brokers selected by the Administrative Agent for sale to the Administrative
Agent at face value of Federal funds in the secondary market in an amount equal
or comparable to the principal amount owed to the Administrative Agent for which
such rate is being determined, plus (y) 1/2 of 1%.
-4-
(b) Canadian Base Rate Loans. Each Canadian Base Rate Loan made or
maintained by a Canadian Lender shall bear interest (computed on the basis of a
year of 365 or 366 days, as the case may be, and the actual days elapsed) on the
unpaid principal amount thereof, both before and after maturity, default and
judgment, from the date such Loan is advanced or continued until maturity
(whether by acceleration or otherwise) at a rate per annum equal to the sum of
the Applicable Margin plus the Canadian Base Rate from time to time in effect
payable on the last day of its Interest Period and at maturity (whether by
acceleration or otherwise).
"Canadian Base Rate" means for any day the greater of: (i) the floating
annual rate of interest established by the Canadian Co-Agent from time to time
as the reference rate it will use to determine rates of interest on Canadian
dollar loans to customers in Canada and designated as its prime rate, as in
effect on such day (it being acknowledged and agreed that such rate may not be
the Canadian Co-Agent's best or lowest rate); and (ii) the CDOR Rate applicable
on such day plus 1.0%.
"CDOR Rate" means on any day the annual rate of interest which is the
rate determined as being the arithmetic average of the quotations of all
institutions listed in respect of the "BA 1 Month" Rate for Canadian Dollar
denominated bankers' acceptances displayed and identified as such on the
"Reuters Screen CDOR Page" (as defined in the International Swap Dealer
Association, Inc. definitions, as modified and amended from time to time) as of
10:00 a.m. Toronto, Ontario local time on such day and, if such day is not a
Business Day, then on the immediately preceding Business Day (as adjusted by the
Canadian Co-Agent after 10:00 a.m. Toronto, Ontario local time to reflect any
error in a posted rate of interest or in the posted average annual rate of
interest); and if such rates are not available on the Reuters Screen CDOR Page
on any particular day, then the CDOR Rate on that day shall be calculated as the
30 day rate applicable to Canadian Dollar denominated bankers' acceptances
quoted by the Canadian Co-Agent as of 10:00 a.m. Toronto, Ontario local time on
such day; or if such day is not a Business Day, then as quoted by the Canadian
Co-Agent on the immediately preceding Business Day.
(c) Eurocurrency Loans. Each Eurocurrency Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is advanced or
continued, or created by conversion from a U.S. Base Rate Loan (in the case of
Loans made in U.S. Dollars to the Parent) or Canadian Base Rate Loan (in the
case of Loans made in Canadian Dollars to the Borrowing Subsidiary), both before
and after maturity (whether by acceleration or otherwise), default, and
judgment, until paid in full at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period,
payable on the last day of the Interest Period and at maturity (whether by
acceleration or otherwise), and, if the applicable Interest Period is longer
than three months, on each day occurring every three months after the
commencement of such Interest Period.
-5-
"Adjusted LIBOR" means, for any Borrowing of Eurocurrency Loans, a rate
per annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
-----------------------------------
1 - Eurocurrency Reserve Percentage
"Eurocurrency Reserve Percentage" means, for any Borrowing of
Eurocurrency Loans, the daily average for the applicable Interest Period of the
maximum rate, expressed as a decimal, at which reserves (including, without
limitation, any supplemental, marginal, and emergency reserves) are imposed
during such Interest Period by the Board of Governors of the Federal Reserve
System (or any successor) on "eurocurrency liabilities", as defined in such
Board's Regulation D (or in respect of any other category of liabilities that
includes deposits by reference to which the interest rate on Eurocurrency Loans
is determined or any category of extensions of credit or other assets that
include loans by non-United States offices of any Lender to United States
residents), subject to any amendments of such reserve requirement by such Board
or its successor, taking into account any transitional adjustments thereto. For
purposes of this definition, the Eurocurrency Loans shall be deemed to be
"eurocurrency liabilities" as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.
"LIBOR" means, for any Interest Period, (a) for a Borrowing of
Eurocurrency Loans in U.S. Dollars, (i) the LIBOR Index Rate for such Interest
Period, if such rate is available, and (ii) if the LIBOR Index Rate cannot be
determined, the arithmetic average of the rates of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S.
Dollars in immediately available funds are offered to the Administrative Agent
at 11:00 a.m. (London, England time) 2 Business Days before the beginning of
such Interest Period by 3 or more major banks in the interbank eurocurrency
market selected by the Administrative Agent for delivery on the first day of and
for a period equal to such Interest Period and in an amount equal or comparable
to the principal amount of the Eurocurrency Loan scheduled to be made by the
Administrative Agent as part of such Borrowing and (b) for a Borrowing of
Eurocurrency Loans in Canadian Dollars, either (i) the rate per annum shown on
"LIBOR 02 Page" (or any substitute therefor) of Reuters Monitor Money Rates
Service or, if such LIBOR 02 Page is not available, at the rate per annum shown
on page 3740 of the Telerate screen (or any successor page) as the composite
offered rate for deposits in Canadian Dollars in the interbank eurocurrency
market with a period comparable to the Interest Period for such Eurocurrency
Loan as at 11:00 a.m. (London, England time) two Business Days prior to the
first day of such Interest Period or (ii) if the rate in clause (b)(i) of this
definition is not shown for any particular day, the average interest rate per
annum (rounded upwards if necessary to the next 1/100th of 1%) offered to the
Canadian Co-Agent in the interbank eurocurrency market for Canadian Dollar
deposits, for delivery in immediately available funds on the first day of such
Interest Period, of amounts comparable to the principal amount of the
Eurocurrency Loan to which such rate is to apply with maturities comparable to
the Interest Period for which such rate will apply as of approximately 11:00
a.m. (London, England time) two Business Days prior to the first day of such
Interest Period.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for
-6-
deposits in U.S. Dollars or in Canadian Dollars, as applicable to the relevant
Credit, for a period equal to such Interest Period, which appears on the
appropriate Telerate Page as of 11:00 a.m. (London, England time) on the day 2
Business Days before the commencement of such Interest Period.
"Telerate Page" means the display designated on the Telerate Service
(or such other service as may be nominated by the British Bankers' Association
as the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates) for the relevant currency.
(d) Rate Determinations. The Administrative Agent (directly or through
the Canadian Co-Agent) shall determine each interest rate applicable to the
Loans and the Reimbursement Obligations hereunder, and its determination thereof
shall be conclusive and binding except in the case of manifest error. The
Original Dollar Amount of each Eurocurrency Loan denominated in Canadian Dollars
shall be determined or re-determined, as applicable, effective as of the first
day of each Interest Period applicable to such Loan.
(e) Interest Act (Canada). For purposes of the Interest Act (Canada)
and the Term Loans, (i) whenever any interest or fee under this Agreement is
calculated using a rate based on a year of 360 days or 365 days, as the case may
be, the rate determined pursuant to such calculation, when expressed as an
annual rate, is equivalent to (x) the applicable rate based on a year of 360 or
365 days, as the case may be, (y) multiplied by the actual number of days in the
relevant year of calculation and (z) divided by 360 or 365, as the case may be,
(ii) the principle of deemed reinvestment of interest does not apply to any
interest calculation under this Agreement, and (iii) the rates of interest
stipulated in this Agreement are intended to be nominal rates and not effective
rates or yields.
Section 1.5. Minimum Borrowing Amounts; Maximum Eurocurrency Loans.
Each Borrowing of U.S. Base Rate Loans under a Credit shall be in an amount not
less than U.S. $100,000 or such greater amount which is an integral multiple of
U.S. $25,000. Each Borrowing of Canadian Base Rate Loans under a Credit shall be
in an amount not less than Cdn $100,000 or such greater amount which is an
integral multiple of Cdn $25,000. Each Borrowing of Eurocurrency Loans under a
Credit shall be in an amount not less than an Original Dollar Amount of
$1,000,000 or such greater amount in units of the relevant currency as would
have the Original Dollar Amount most closely approximating $100,000 or an
integral multiple thereof. Without the Administrative Agent's consent, there
shall not be more than four (4) Borrowings of Eurocurrency Loans outstanding
under a Credit at any one time.
Section 1.6. Manner of Borrowing Loans and Designating Applicable
Interest Rates. (a) Notice to the Administrative Agent. The Parent, on behalf of
the relevant Borrower, shall give notice to the Administrative Agent by no later
than 10:00 a.m. (Chicago time): (i) at least 3 Business Days before the date on
which the Borrowing Subsidiary requests the Canadian Lenders to advance a
Borrowing of Eurocurrency Loans denominated in Canadian Dollars, (ii) at least 3
Business Days before the date on which the Parent requests the relevant Lenders
to advance a Borrowing of Eurocurrency Loans denominated in U.S. Dollars, and
(iii) on the date the relevant Borrower requests the relevant Lenders to advance
a Borrowing of U.S. Base Rate
-7-
Loans or Canadian Base Rate Loans. The Loans included in each Borrowing shall
bear interest initially at the type of rate specified in such notice of a new
Borrowing. Thereafter, subject to the terms and conditions hereof, the Parent,
on behalf of the relevant Borrower, may from time to time elect to change or
continue the type of interest rate borne by each Borrowing or, subject to
Section 1.5's minimum amount requirement for each outstanding Borrowing, a
portion thereof, as follows: (i) if such Borrowing is of Eurocurrency Loans, on
the last day of the Interest Period applicable thereto, the relevant Borrower
may continue part or all of such Borrowing as Eurocurrency Loans or convert part
or all of such Borrowing into U.S. Base Rate Loans (in the case of Loans made in
U.S. Dollars to the Parent) or Canadian Base Rate Loans (in the case of Loans
made in Canadian Dollars to the Borrowing Subsidiary) or (ii) if such Borrowing
is of U.S. Base Rate Loans or Canadian Base Rate Loans, on any Business Day, the
relevant Borrower may convert all or part of such Borrowing into Eurocurrency
Loans in the same currency for an Interest Period or Interest Periods specified
by the Parent, on behalf of the relevant Borrower. The Parent, on behalf of the
relevant Borrower shall give all such notices requesting the advance,
continuation or conversion of a Borrowing to the Administrative Agent by
telephone or telecopy (which notice shall be irrevocable once given and, if by
telephone, shall be promptly confirmed in writing), substantially in the form
attached hereto as Exhibit B (Notice of Borrowing) or Exhibit C (Notice of
Continuation/Conversion), as applicable, or in such other form acceptable to the
Administrative Agent. Notice of the continuation of a Borrowing of Eurocurrency
Loans denominated in U.S. Dollars for an additional Interest Period or of the
conversion of part or all of a Borrowing of U.S. Base Rate Loans into
Eurocurrency Loans denominated in U.S. Dollars must be given by no later than
10:00 a.m. (Chicago time) at least 3 Business Days before the date of the
requested continuation or conversion. Notice of the continuation of a Borrowing
of Eurocurrency Loans denominated in Canadian Dollars for an additional Interest
Period or of the conversion of part or all of a Borrowing of Canadian Base Rate
Loans into Eurocurrency Loans denominated in Canadian Dollars must be given by
no later than 12:00 noon (Chicago time) at least 3 Business Days before the
requested continuation or conversion. All such notices concerning the advance,
continuation or conversion of a Borrowing shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued
or converted, the type of Loans to comprise such new, continued or converted
Borrowing and, if such Borrowing is to be comprised of Eurocurrency Loans, the
Interest Period applicable thereto. The Borrowers agree that the Administrative
Agent may rely on any such telephonic or telecopy notice given by any person the
Administrative Agent in good faith believes is an Authorized Representative
without the necessity of independent investigation, and in the event any such
notice by telephone conflicts with any written confirmation such telephonic
notice shall govern if the Administrative Agent has acted in reliance thereon.
(b) Notice to the Lenders. The Administrative Agent shall give prompt
telephonic or telecopy notice to each Lender of any notice from the Parent
received pursuant to Section 1.6(a) above and, if such notice requests the
Lenders to make Eurocurrency Loans, the Administrative Agent shall give notice
to the Parent and each Lender by like means of the interest rate applicable
thereto promptly after the Administrative Agent has made such determination and,
if such Borrowing is denominated in Canadian Dollars, of the Original Dollar
Amount thereof.
-8-
(c) Borrower's Failure to Notify; Automatic Continuations and
Conversions. Any outstanding Borrowing of U.S. Base Rate Loans or Canadian Base
Rate Loans shall automatically be continued for an additional Interest Period on
the last day of its then current Interest Period unless the Parent, on behalf of
the relevant Borrower, has notified the Administrative Agent within the period
required by Section 1.6(a) that the relevant Borrower intends to convert such
Borrowing, subject to Section 7.1 hereof, into a Borrowing of Eurocurrency Loans
(in the same currency) or such Borrowing is prepaid in accordance with Section
1.9(a). If the Parent fails to give notice pursuant to Section 1.6(a) above of
the continuation or conversion of any outstanding principal amount of a
Borrowing of Eurocurrency Loans before the last day of its then current Interest
Period within the period required by Section 1.6(a) or, whether or not such
notice has been given, one or more of the conditions set forth in Section 7.1
for the continuation or conversion of a Borrowing of Eurocurrency Loans would
not be satisfied, and such Borrowing is not prepaid in accordance with Section
1.9(a), such Borrowing shall automatically be converted into a Borrowing of U.S.
Base Rate Loans (in the case of Loans made in U.S. Dollars to the Parent) or
Canadian Base Rate Loans (in the case of Loans made in Canadian Dollars to the
Borrowing Subsidiary). In the event the Parent fails to give notice pursuant to
Section 1.6(a) above of a Borrowing equal to the amount of a Reimbursement
Obligation and has not notified the Administrative Agent by 12:00 noon (Chicago
time) on the day such Reimbursement Obligation becomes due that it intends to
repay such Reimbursement Obligation through funds not borrowed under this
Agreement, the Parent shall be deemed to have requested a Borrowing of U.S. Base
Rate Loans under the Revolving Credit on such day in the amount of the
Reimbursement Obligation then due, which Borrowing shall be applied to pay the
Reimbursement Obligation then due.
(d) Disbursement of Loans. Not later than 12:00 noon (Chicago time) on
the date of any requested advance of a new Borrowing, subject to Section 7
hereof, each Lender shall make available its Loan comprising part of such
Borrowing in funds immediately available (i) in the case of Loans in U.S.
Dollars to the Parent, at the principal office of the Administrative Agent in
Chicago, Illinois, and (ii) in the case of Loans in Canadian Dollars to the
Borrowing Subsidiary, at such office of the Canadian Co-Agent as the Canadian
Co-Agent has previously specified in a notice to such Canadian Lender in such
funds as are then customary for the settlement of international transactions in
such currency and no later than such local time as is necessary for such funds
to be received and transferred to the Borrowing Subsidiary for same day value on
the date of the Borrowing. The Administrative Agent shall make the proceeds of
each new Borrowing denominated in U.S. Dollars available to the Parent at the
Administrative Agent's principal office in Chicago, Illinois, by depositing such
proceeds to the credit of the Parent's operating account maintained with the
Administrative Agent or as the Parent and the Administrative Agent may otherwise
agree, and the Canadian Co-Agent shall make the proceeds of each Borrowing
advanced in Canadian Dollars available at such office as the Canadian Co-Agent
has previously agreed to with the Borrowing Subsidiary, in each case in the type
of funds received by the Administrative Agent or the Canadian Co-Agent, as the
case may be, from the relevant Lenders.
(e) Administrative Agent Reliance on Lender Funding. Unless the
Administrative Agent shall have been notified by a Lender prior to (or, in the
case of a Borrowing of U.S. Base Rate Loans or Canadian Base Rate Loans, by
12:00 noon (Chicago time) on) the date on which
-9-
such Lender is scheduled to make payment to the Administrative Agent (or the
Canadian Co-Agent, in the case of a Borrowing by the Borrowing Subsidiary) of
the proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume
that such Lender has made such payment when due and the Administrative Agent and
the Canadian Co-Agent may in reliance upon such assumption (but shall not be
required to) make available to the Parent or the Borrowing Subsidiary, as the
case may be, the proceeds of the Loan to be made by such Lender and, if any
Lender has not in fact made such payment to the Administrative Agent or the
Canadian Co-Agent, as applicable, such Lender shall, on demand, pay to the
Administrative Agent or the Canadian Co-Agent, as applicable, the amount made
available to the Parent or the Borrowing Subsidiary, as the case may be,
attributable to such Lender together with interest thereon in respect of each
day during the period commencing on the date such amount was made available to
the Parent or the Borrowing Subsidiary, as the case may be, and ending on (but
excluding) the date such Lender pays such amount to the Administrative Agent or
the Canadian Co-Agent, as applicable, at a rate per annum equal to: (i) from the
date the related advance was made by the Administrative Agent or the Canadian
Co-Agent, as applicable, to the date 2 Business Days after payment by such
Lender is due hereunder, the Federal Funds Rate for each such day or, in the
case of a Loan denominated in Canadian Dollars, the CDOR Rate for each such day,
as determined by the Administrative Agent or the Canadian Co-Agent, as
applicable, and (ii) from the date 2 Business Days after the date such payment
is due from such Lender to the date such payment is made by such Lender, the
U.S. Base Rate in effect for each such day or, in the case of a Loan denominated
in Canadian Dollars, the Canadian Base Rate in effect for each such day. If such
amount is not received from such Lender by the Administrative Agent or the
Canadian Co-Agent, as applicable, immediately upon demand, the Parent or the
Borrowing Subsidiary, as the case may be, will, on demand, repay to the
Administrative Agent or the Canadian Co-Agent, as applicable, the proceeds of
the Loan attributable to such Lender with interest thereon at a rate per annum
equal to the interest rate applicable to the relevant Loan, but without such
payment being considered a payment or prepayment of a Loan under Section 1.12
hereof so that the Parent will have no liability under such Section with respect
to such payment.
Section 1.7. Interest Periods. As provided in Section 1.6(a) hereof, at
the time of each request to advance, continue or create by conversion a
Borrowing of Eurocurrency Loans, the Parent, on behalf of the Borrowers, shall
select an Interest Period applicable to such Loans from among the available
options. The term "Interest Period" means the period commencing on the date a
Borrowing of Loans is advanced, continued or created by conversion and ending:
(a) in the case of U.S. Base Rate Loans and Canadian Base Rate Loans, on the
last day of the calendar quarter (i.e., last day of March, June, September, and
December, as applicable) in which such Borrowing is advanced, continued or
created by conversion (or on the last day of the following calendar quarter if
such Loan is advanced, continued or created by conversion on the last day of a
calendar quarter), and (b) in the case of a Eurocurrency Loan, 1, 2, 3, 6 or 12
months thereafter; provided, however, that:
(i) any Interest Period for a Borrowing of Revolving Loans
consisting of U.S. Base Rate Loans that otherwise would end after the
Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date, and any Interest Period for a Borrowing of Term Loans
consisting of Canadian Base Rate
-10-
Loans that otherwise would end after the final maturity date of the
Term Loans shall end on the final maturity date of the Term Loans;
(ii) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Credit Termination
Date, and no Interest Period with respect to any portion of the Term
Loans shall extend beyond the final maturity date of the Term Loans;
(iii) no Interest Period with respect to any portion of the
Term Loans consisting of Eurocurrency Loans shall extend beyond a date
on which the Borrowing Subsidiary is required to make a scheduled
payment of principal on the Term Loans, unless the sum of (a) the
aggregate principal amount of Term Loans that are Canadian Base Rate
Loans plus (b) the aggregate principal amount of Term Loans that are
Eurocurrency Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount to be paid on the Term
Loans on such payment date;
(iv) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided that, if such extension would cause the last day of an
Interest Period for a Borrowing of Eurocurrency Loans to occur in the
following calendar month, the last day of such Interest Period shall be
the immediately preceding Business Day; and
(v) for purposes of determining an Interest Period for a
Borrowing of Eurocurrency Loans, a month means a period starting on one
day in a calendar month and ending on the numerically corresponding day
in the next calendar month; provided, however, that if there is no
numerically corresponding day in the month in which such an Interest
Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end
on the last Business Day of the calendar month in which such Interest
Period is to end.
Section 1.8. Maturity of Loans. (a) Scheduled Payments of Term Loans.
The Borrowing Subsidiary shall make principal payments on the Term Loans in
installments on the last day of each March, June, September, and December in
each year, commencing with the calendar quarter ending March 31, 2005, with the
amount of each such principal installment to equal the amount set forth in
Column B below shown opposite of the relevant due date as set forth in Column A
below:
COLUMN A COLUMN B
SCHEDULED PRINCIPAL
PAYMENT DATE PAYMENT ON TERM LOANS
03/31/05 Cdn $ 1,230,000.00
06/30/05 Cdn $ 1,230,000.00
-11-
COLUMN A COLUMN B
SCHEDULED PRINCIPAL
PAYMENT DATE PAYMENT ON TERM LOANS
09/30/05 Cdn $ 1,230,000.00
12/31/05 Cdn $ 1,230,000.00
03/31/06 Cdn $ 1,537,500.00
06/30/06 Cdn $ 1,537,500.00
09/30/06 Cdn $ 1,537,500.00
12/31/06 Cdn $ 1,537,500.00
03/31/07 Cdn $ 1,537,500.00
06/30/07 Cdn $ 1,537,500.00
09/30/07 Cdn $ 1,537,500.00
12/31/07 Cdn $ 1,537,500.00
03/31/08 Cdn $ 1,537,500.00
06/30/08 Cdn $ 1,537,500.00
09/30/08 Cdn $ 1,537,500.00
12/31/08 Cdn $ 1,537,500.00
03/31/09 Cdn $ 1,537,500.00
06/30/09 Cdn $ 1,537,500.00
09/30/09 Cdn $ 1,537,500.00
10/29/09 Cdn $ 11,297,500.00
(or such lesser amount
then outstanding)
, it being agreed that the final payment of both principal and interest not
sooner paid on the Term Loans shall be due and payable on October 29, 2009, the
final maturity thereof. Each such principal payment shall be applied to the
Lenders holding the Term Loans pro rata based upon their Term Loan Percentages.
(b) Revolving Loans. Each Revolving Loan, both for principal and
interest not sooner paid, shall mature and become due and payable by the Parent
on the Revolving Credit Termination Date.
Section 1.9. Prepayments. (a) Optional. The relevant Borrower may
prepay in whole or in part (but, if in part, then: (i) if such Borrowing is of
U.S. Base Rate Loans, in an amount not less than U.S. $100,000, (ii) if such
Borrowing is of Eurocurrency Loans denominated in U.S. Dollars, in an amount not
less than U.S. $1,000,000, (iii) if such Borrowing is of Canadian Base Rate
Loans, in an amount not less than Cdn $100,000, and (iv) if such Borrowing is of
Eurocurrency Loans denominated in Canadian Dollars, in an amount not less than
the U.S. Dollar Equivalent of $1,000,000, and (iv) in each case, in an amount
such that the minimum amount
-12-
required for a Borrowing pursuant to Section 1.5 hereof remains outstanding) any
Borrowing of (x) Eurocurrency Loans denominated in U.S. Dollars at any time upon
3 Business Days prior notice by the relevant Borrower to the Administrative
Agent, (y) Eurocurrency Loans denominated in Canadian Dollars at any time upon 3
Business Days prior notice by the relevant Borrower to the Administrative Agent,
or (z) U.S. Base Rate Loans or Canadian Base Rate Loans, notice delivered by the
relevant Borrower to the Administrative Agent no later than 10:00 a.m. (Chicago
time) on the date of prepayment (or, in any case, such shorter period of time
then agreed to by the Administrative Agent), such prepayment to be made by the
payment of the principal amount to be prepaid and, in the case of any Term Loans
or Eurocurrency Loans, accrued interest thereon to the date fixed for prepayment
plus any amounts due the Lenders under Section 1.12 hereof.
(b) Mandatory. (i) Within 60 days of the date hereof, the Borrowing
Subsidiary agrees to prepay the Term Loans by an aggregate amount equal to the
difference (if any) between the cash and cash equivalents reflected on the
balance sheet of the Boomerang on the date of the Boomerang Acquisition (and
after giving effect to all payments in connection with the Boomerang
Acquisition) minus the U.S. Dollar Equivalent of $2,000,000 (except that the
Borrowing Subsidiary shall not be required to prepay more than the U.S. Dollar
Equivalent of $10,000,000 of the Term Loans under this Section).
(ii) The Parent shall, on each date the Revolving Credit Commitments are
reduced pursuant to Section 1.13 hereof, prepay the Revolving Loans and, if
necessary, prefund the L/C Obligations by the amount, if any, necessary to
reduce the sum of the aggregate principal amount of Revolving Loans and L/C
Obligations then outstanding to the amount to which the Revolving Credit
Commitments have been so reduced.
(iii) Unless the Parent otherwise directs, prepayments of Loans under
this Section 1.9(b) in U.S. Dollars shall be applied first to Borrowings of U.S.
Base Rate Loans until payment in full thereof with any balance applied to
Borrowings of Eurocurrency Loans denominated in U.S. Dollars in the order in
which their Interest Periods expire and prepayments of Loans under this Section
1.9(b) in Canadian Dollars shall be applied first to Borrowings of Canadian Base
Rate Loans until payments in full thereof with any balance applied to Borrowings
of Eurocurrency Loans denominated in Canadian Dollars shall be applied in the
order in which their Interest Periods expire. Each prepayment of Loans under
this Section 1.9(b) shall be made by the payment of the principal amount to be
prepaid and, in the case of any Term Loans or Eurocurrency Loans, accrued
interest thereon to the date of prepayment together with any amounts due the
Lenders under Section 1.12 hereof. Each prefunding of L/C Obligations shall be
made in accordance with Section 9.4 hereof.
(c) Any amount of Revolving Loans paid or prepaid before the Revolving
Credit Termination Date may, subject to the terms and conditions of this
Agreement, be borrowed, repaid and borrowed again. No amount of the Term Loans
paid or prepaid may be reborrowed, and, in the case of any partial prepayment,
such prepayment shall be applied to the remaining amortization payments on the
relevant Loans in the reverse order of maturity.
-13-
Section 1.10. Default Rate. Notwithstanding anything to the contrary
contained herein, while any Event of Default exists or after acceleration, the
relevant Borrower shall pay interest (after as well as before entry of judgment
thereon to the extent permitted by law) on the principal amount of all Loans and
Reimbursement Obligations, and letter of credit fees at a rate per annum equal
to:
(a) for any U.S. Base Rate Loan, the sum of 2.0% plus the
Applicable Margin plus the U.S. Base Rate from time to time in effect;
(b) for any Canadian Base Rate Loan, the sum of 2.0% plus the
Applicable Margin plus the Canadian Base Rate from time to time in
effect;
(c) for any Eurocurrency Loan denominated in U.S, the sum of
2.0% plus the rate of interest in effect thereon at the time of such
default until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of 2.0% plus the
Applicable Margin for U.S. Base Rate Loans plus the U.S. Base Rate from
time to time in effect;
(d) for any Eurocurrency Loan denominated in Canadian
Dollars, the sum of 2.0% plus the rate of interest in effect thereon at
the time of such default until the end of the Interest Period
applicable thereto and, thereafter, at a rate per annum equal to the
sum of 2.0% plus the Applicable Margin for Canadian Base Rate Loans
plus the Canadian Base Rate from time to time in effect;
(e) for any Reimbursement Obligation, the sum of 2.0% plus
the amounts due under Section 1.3 with respect to such Reimbursement
Obligation; and
(f) for any Letter of Credit, the sum of 2.0% plus the letter
of credit fee due under Section 2.1 with respect to such Letter of
Credit;
provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the relevant Borrower. While any Event of Default exists or after
acceleration, interest shall be paid on demand of the Administrative Agent at
the request or with the consent of the Required Lenders.
Section 1.11. The Notes. (a) The Term Loan made to the Borrowing
Subsidiary by a Canadian Lender shall be evidenced by a single promissory note
of the Borrowing Subsidiary issued to such Canadian Lender in the form of
Exhibit D-1 hereto. Each such promissory note is hereinafter referred to as a
"Term Note" and collectively such promissory notes are referred to as the "Term
Notes."
(b) The Revolving Loans made to the Parent by a Lender shall be
evidenced by a single promissory note of the Parent issued to such Lender in the
form of Exhibit D-2 hereto. Each such promissory note is hereinafter referred to
as a "Revolving Note" and collectively such promissory notes are referred to as
the "Revolving Notes."
-14-
(c) Each Lender shall record on its books and records or on a schedule
to its appropriate Note the amount of each Loan advanced, continued or converted
by it, all payments of principal and interest and the principal balance from
time to time outstanding thereon, the type of such Loan, and, for any
Eurocurrency Loan, the Interest Period, interest rate, and currency applicable
thereto. The record thereof, whether shown on such books and records of a Lender
or on a schedule to the relevant Note, shall be prima facie evidence as to all
such matters; provided, however, that the failure of any Lender to record any of
the foregoing or any error in any such record shall not limit or otherwise
affect the obligation of the Parent or the Borrowing Subsidiary, as the case may
be, to repay all Loans made to it hereunder together with accrued interest
thereon. At the request of any Lender and upon such Lender tendering to the
Parent or the Borrowing Subsidiary, as the case may be, the appropriate Note to
be replaced, the Parent or the Borrowing Subsidiary, as the case may be, shall
furnish a new Note to such Lender to replace any outstanding Note.
Section 1.12. Funding Indemnity. If any Lender shall incur any loss,
cost or expense (including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or re-employment of deposits or other
funds acquired by such Lender to fund or maintain any Eurocurrency Loan or the
relending or reinvesting of such deposits or amounts paid or prepaid to such
Lender) as a result of:
(a) any payment, prepayment or conversion of a Eurocurrency
Loan on a date other than the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions
of Section 7 or otherwise) by the relevant Borrower to borrow or
continue a Eurocurrency Loan or to convert a U.S. Base Rate Loan or
Canadian Base Rate Loan, as the case may be, into a Eurocurrency Loan
on the date specified in a notice given pursuant to Section 1.6(a)
hereof,
(c) any failure by the relevant Borrower to make any payment
of principal on any Eurocurrency Loan when due (whether by acceleration
or otherwise), or
(d) any acceleration of the maturity of a Eurocurrency Loan
as a result of the occurrence of any Event of Default hereunder,
then, upon the demand of such Lender, the relevant Borrower shall pay to such
Lender such amount as will reimburse such Lender for such loss, cost or expense.
If any Lender makes such a claim for compensation, it shall provide to the
relevant Borrower, with a copy to the Administrative Agent, a certificate
setting forth the amount of such loss, cost or expense in reasonable detail and
the amounts shown on such certificate shall be conclusive if reasonably
determined.
Section 1.13. Commitment Terminations. The Parent shall have the right
at any time and from time to time, upon 5 Business Days prior written notice to
the Administrative Agent (or such shorter period of time agreed to by the
Administrative Agent), to terminate the Revolving Credit Commitments without
premium or penalty and in whole or in part, any partial termination
-15-
to be (i) in an amount not less than $1,000,000 and (ii) allocated ratably among
the Lenders in proportion to their respective Revolver Percentages, provided
that the Revolving Credit Commitments may not be reduced to an amount less than
the sum of the aggregate principal amount of Revolving Loans and L/C Obligations
then outstanding. Any termination of the Revolving Credit Commitments below the
L/C Sublimit then in effect shall reduce the L/C Sublimit by a like amount. The
Administrative Agent shall give prompt notice to each Lender of any such
termination of the Revolving Credit Commitments. Any termination of the
Commitments pursuant to this Section 1.13 may not be reinstated.
Section 1.14. Substitution of Lenders. In the event (a) the Parent or
the Borrowing Subsidiary receives a claim from any Lender for compensation under
Section 10.3 or 13.1 hereof, (b) the Parent or the Borrowing Subsidiary receives
notice from any Lender of any illegality pursuant to Section 10.1 hereof, (c)
any Lender is in default in any material respect with respect to its obligations
under the Loan Documents, or (d) a Lender fails to consent to an amendment or
waiver requested under Section 13.13 hereof at a time when the Required Lenders
have approved such amendment or waiver (any such Lender referred to in clause
(a), (b), (c), or (d) above being hereinafter referred to as an "Affected
Lender"), the Parent (or, in the case of the Term Loans, the Borrowing
Subsidiary) may, in addition to any other rights the Parent or the Borrowing
Subsidiary may have hereunder or under applicable law, require, at its expense,
any such Affected Lender to assign, at par plus accrued interest and fees,
without recourse, all of its interest, rights, and obligations hereunder
(including all of its Commitments and the Loans and participation interests in
Letters of Credit and other amounts at any time owing to it hereunder and the
other Loan Documents) to a commercial bank or other financial institution
specified by the Parent (or, in the case of the Term Loans, the Borrowing
Subsidiary), provided that (i) such assignment shall not conflict with or
violate any law, rule or regulation or order of any court or other governmental
authority, (ii) the Parent (or, in the case of the Term Loans, the Borrowing
Subsidiary) shall have received the written consent of the Administrative Agent,
which consent shall not be unreasonably withheld, to such assignment, (iii) the
Parent (or, in the case of the Term Loans, the Borrowing Subsidiary) shall have
paid to the Affected Lender all monies (together with amounts due such Affected
Lender under Section 1.12 hereof as if the Loans owing to it were prepaid rather
than assigned) other than such principal owing to it hereunder, and (iv) the
assignment is entered into in accordance with the other requirements of Section
13.12 hereof (provided any assignment fees and reimbursable expenses due
thereunder shall be paid by the Parent (or, in the case of the Term Loans, the
Borrowing Subsidiary)).
Section 1.15. Appointment of Parent as Agent for Borrowing Subsidiary.
The Borrowing Subsidiary hereby irrevocably appoints the Parent as its agent
hereunder to make requests on Borrowing Subsidiary's behalf for Borrowings of
the relevant Credit, to select on such Borrowing Subsidiary's behalf the
interest rate and Interest Period to be applicable to such Borrowings, and to
take any other action contemplated by the Loan Documents with respect to credit
extended hereunder to the Borrowing Subsidiary. The Administrative Agent and the
Lenders shall be entitled to conclusively presume that any action by the Parent
under the Loan Documents is taken on behalf of the Parent and the Borrowing
Subsidiary whether or not the Parent so indicates.
-16-
SECTION 2. FEES.
Section 2.1. Fees. (a) Revolving Credit Commitment Fee. The Parent
shall pay to the Administrative Agent for the ratable account of the Lenders in
accordance with their Revolver Percentages a commitment fee at the rate per
annum equal to the Applicable Margin (computed on the basis of a year of 360
days and the actual number of days elapsed) on the average daily Unused
Revolving Credit Commitments. Such commitment fee shall be payable quarterly in
arrears on the last day of each March, June, September, and December in each
year (commencing on the first such date occurring after the date hereof) and on
the Revolving Credit Termination Date, unless the Revolving Credit Commitments
are terminated in whole on an earlier date, in which event the commitment fee
for the period to the date of such termination in whole shall be paid on the
date of such termination.
(b) Letter of Credit Fees. On the date of issuance or extension, or
increase in the amount, of any standby Letter of Credit pursuant to Section 1.3
hereof, the Parent shall pay to the L/C Issuer for its own account a fronting
fee equal to 0.125% of the face amount of (or of the increase in the face amount
of) such Letter of Credit. Quarterly in arrears, on the last day of each March,
June, September, and December, commencing on the first such date occurring after
the date hereof, the Parent shall pay to the Administrative Agent, for the
ratable benefit of the Lenders in accordance with their Revolver Percentages, a
letter of credit fee at a rate per annum equal to the Applicable Margin
(computed on the basis of a year of 360 days and the actual number of days
elapsed) in effect during each day of such quarter applied to the daily average
face amount of Letters of Credit outstanding during such quarter. In addition,
the Parent shall pay to the L/C Issuer for its own account the L/C Issuer's
standard issuance, drawing, negotiation, amendment, assignment, and other
administrative fees for each Letter of Credit as established by the L/C Issuer
from time to time.
(c) Upfront Fees. The Parent shall pay to the Administrative Agent, for
the benefit of the Lenders, (i) on the date hereof, an upfront fee of $160,000
(representing 0.50% multiplied by the difference between the sum of the
Commitments less $10,000,000) and (ii) within 60 days of the date hereof, a
supplemental upfront fee equal to 0.50% multiplied by the difference (if any)
between $10,000,000 less the mandatory prepayment of the Term Loans made
pursuant to Section 1.9(b)(i) hereof.
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.
Section 3.1. Place and Application of Payments. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and of
all other Obligations payable by the Borrowers under this Agreement and the
other Loan Documents, shall be made by the relevant Borrower (a) in the case of
payments by the Parent, to the Administrative Agent by no later than 12:00 noon
(Chicago time) on the due date thereof at the office of the Administrative Agent
in Chicago, Illinois (or such other location as the Administrative Agent may
designate to the Parent) and (b) in the case of payments by the Borrowing
Subsidiary, to the Canadian Co-Agent by no later than 12:00 noon local time at
the place of payment to such office as the Canadian Co-Agent has previously
specified in a notice to the Borrowing Subsidiary, in each case for the benefit
of the Lender or Lenders entitled thereto. Any payments received after such
-17-
time shall be deemed to have been received by the Administrative Agent or the
Canadian Co-Agent, as the case may be, on the next Business Day. All such
payments shall be made (i) in U.S. Dollars, in immediately available funds at
the place of payment, or (ii) in the case of amounts payable hereunder in
Canadian Dollars, in Canadian Dollars in such funds then customary for the
settlement of international transactions in such currency, in each case without
set-off or counterclaim. The Administrative Agent or the Canadian Co-Agent, as
the case may be, will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest on Loans and on Reimbursement
Obligations in which the Lenders have purchased Participating Interests ratably
to the Lenders and like funds relating to the payment of any other amount
payable to any Lender to such Lender, in each case to be applied in accordance
with the terms of this Agreement. If the Administrative Agent or the Canadian
Co-Agent, as the case may be, causes amounts to be distributed to the Lenders in
reliance upon the assumption that the Parent or the Borrowing Subsidiary will
make a scheduled payment and such scheduled payment is not so made, each Lender
shall, on demand, repay to the Administrative Agent or the Canadian Co-Agent, as
the case may be, the amount distributed to such Lender together with interest
thereon in respect of each day during the period commencing on the date such
amount was distributed to such Lender and ending on (but excluding) the date
such Lender repays such amount to the Administrative Agent or the Canadian
Co-Agent, at a rate per annum equal to: (i) from the date the distribution was
made to the date 2 Business Days after payment by such Lender is due hereunder,
(x) if such scheduled payment was to be made in U.S. Dollars, the Federal Funds
Rate for each such day and (y) if such scheduled payment was to be made in
Canadian Dollars, the CDOR Rate for each such day and (ii) from the date 2
Business Days after the date such payment is due from such Lender to the date
such payment is made by such Lender, (x) if such scheduled payment was to be
made in U.S. Dollars, the U.S. Base Rate in effect for each such day and (y) if
such scheduled payment was to be made in Canadian Dollars, the Canadian Base
Rate in effect for each such day.
Anything contained herein to the contrary notwithstanding (including,
without limitation, Section 1.9(b) hereof), all payments and collections
received in respect of the Obligations by the Administrative Agent or any of the
Lenders after acceleration or the final maturity of the Obligations or
termination of the Commitments as a result of an Event of Default shall be
remitted to the Administrative Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and
expenses incurred by the Administrative Agent and the Canadian Co-Agent
in protecting, preserving or enforcing rights under the Loan Documents,
and in any event including all costs and expenses of a character which
the Parent and the Borrowing Subsidiary have agreed to pay the
Administrative Agent and the Canadian Co-Agent under Section 13.15
hereof (such funds to be retained by the Administrative Agent or the
Canadian Co-Agent, as the case may be, for its own account unless it
has previously been reimbursed for such costs and expenses by the
Lenders, in which event such amounts shall be remitted to the Lenders
to reimburse them for payments theretofore made to the Administrative
Agent or the Canadian Co-Agent, as the case may be);
-18-
(b) second, to the payment of any outstanding interest and
fees due under the Loan Documents to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder
thereof;
(c) third, to the payment of principal on the Notes, unpaid
Reimbursement Obligations, together with amounts to be held by the
Administrative Agent as collateral security for any outstanding L/C
Obligations pursuant to Section 9.4 hereof (until the Administrative
Agent is holding an amount of cash equal to the then outstanding amount
of all such L/C Obligations), and Hedging Liability, the aggregate
amount paid to, or held as collateral security for, the Lenders and, in
the case of Hedging Liability, their Affiliates to be allocated pro
rata in accordance with the aggregate unpaid amounts owing to each
holder thereof; and
(d) finally, to the payment of all other unpaid Obligations
and all other indebtedness, obligations, and liabilities of the Parent
and its Subsidiaries secured by the Loan Documents (including, without
limitation, Funds Transfer and Deposit Account Liability) to be
allocated pro rata in accordance with the aggregate unpaid amounts
owing to each holder thereof.
SECTION 4. GUARANTIES.
Section 4.1. Guaranties. The payment and performance of the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability
of the Parent shall at all times be guaranteed by each direct and indirect
Domestic Subsidiary of the Parent and the payment and performance of the Term
Loans and all Obligations relating thereto and the Hedging Liability and Funds
Transfer and Deposit Account Liability of the Borrowing Subsidiary shall at all
times be guaranteed by the Parent, each direct and indirect Domestic Subsidiary
of the Parent, and each direct and indirect Foreign Subsidiary of the Parent and
of the Borrowing Subsidiary organized under the laws of Canada or any province
or territory of Canada (each such Person in such a capacity being referred to
herein as a "Guarantor" and collectively the "Guarantors") pursuant to Section
12 hereof or pursuant to one or more guaranty agreements in form and substance
acceptable to the Administrative Agent, as the same may be amended, modified or
supplemented from time to time (individually a "Guaranty" and collectively the
"Guaranties"); provided that if, and only so long as, a Subsidiary is an
Inactive Subsidiary, such Subsidiary shall not be required to be a Guarantor.
Section 4.2. Further Assurances. In the event the Parent or any
Guarantor forms or acquires any other Domestic Subsidiary after the date hereof,
except as otherwise provided in Section 4.1 above, the Parent shall promptly
upon such formation or acquisition cause such newly formed or acquired Domestic
Subsidiary to execute a Guaranty and the Parent shall also deliver to the
Administrative Agent, or cause such Domestic Subsidiary to deliver to the
Administrative Agent, at the Parent's cost and expense, such other instruments,
documents, certificates, and opinions reasonably required by the Administrative
Agent in connection therewith.
-19-
SECTION 5. DEFINITIONS; INTERPRETATION.
Section 5.1. Definitions. The following terms when used herein shall
have the following meanings:
"Adjusted LIBOR" is defined in Section 1.4(c) hereof.
"Administrative Agent" means Xxxxxx Trust and Savings Bank and any
successor pursuant to Section 11.7 hereof.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 10%
or more of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 10% or more of the partnership
or other ownership interest of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person.
"Agreement" means this Multicurrency Credit Agreement, as the same may
be amended, modified, restated or supplemented from time to time pursuant to the
terms hereof.
"Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees and letter of credit fees payable under
Section 2.1 hereof, until the first Pricing Date, the rates per annum shown
opposite Level II below, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:
APPLICABLE
MARGIN FOR
U.S. BASE RATE
LOANS AND APPLICABLE
CANADIAN BASE MARGIN FOR
RATE LOANS AND EUROCURRENCY APPLICABLE
LEVERAGE RATIO REIMBURSEMENT LOANS AND MARGIN FOR
FOR SUCH PRICING OBLIGATIONS SHALL LETTER OF CREDIT COMMITMENT FEE
LEVEL DATE BE: FEE SHALL BE: SHALL BE:
III Greater than 2.0 0.0% 1.75% 0.40%
to 1.0
II Less than or 0.0% 1.50% 0.30%
equal to 2.0 to
1.0, but greater
than or equal to
1.0 to 1.0
I Less than 1.0 to 0.0% 1.25% 0.25
1.0
-20-
For purposes hereof, the term "Pricing Date" means, for any fiscal quarter of
the Parent ending on or after December 31, 2004, the date on which the
Administrative Agent is in receipt of the Parent's most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof. The
Applicable Margin shall be established based on the Leverage Ratio for the most
recently completed fiscal quarter and the Applicable Margin established on a
Pricing Date shall remain in effect until the next Pricing Date. If the Parent
has not delivered its financial statements by the date such financial statements
(and, in the case of the year-end financial statements, audit report) are
required to be delivered under Section 8.5 hereof, until such financial
statements and audit report are delivered, the Applicable Margin shall be the
highest Applicable Margin (i.e., Level III shall apply). If the Parent
subsequently delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date. In all
other circumstances, the Applicable Margin established by such financial
statements shall be in effect from the Pricing Date that occurs immediately
after the end of the fiscal quarter covered by such financial statements until
the next Pricing Date. Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be conclusive and
binding on the Borrowers and the Lenders if reasonably determined.
"Application" is defined in Section 1.3(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Parent pursuant to Section 7.2 hereof or on any update
of any such list provided by the Parent to the Administrative Agent, or any
further or different officers of the Parent so named by any Authorized
Representative of the Parent in a written notice to the Administrative Agent.
"Boomerang" means Boomerang Tracking Inc., a Canadian corporation.
"Boomerang Acquisition" means the acquisition by the Borrowing
Subsidiary of not less than 95% of the outstanding shares of Boomerang's capital
stock pursuant to the terms of the Combination Agreement.
"Borrower" and "Borrowers" each is defined in the introductory
paragraph of this Agreement.
-21-
"Borrowing" means the total of Loans of a single type and currency
advanced, continued for an additional Interest Period, or converted from a
different type into such type by the Lenders under a Credit on a single date
and, in the case of Eurocurrency Loans, for a single Interest Period and in the
same currency. Borrowings of Loans are made and maintained ratably from each of
the Lenders under a Credit according to their Percentages of such Credit. A
Borrowing is "advanced" on the day Lenders advance funds comprising such
Borrowing to the relevant Borrower, is "continued" on the date a new Interest
Period for the same type of Loans commences for such Borrowing, and is
"converted" when such Borrowing is changed from one type of Loans to the other,
all as determined pursuant to Section 1.6 hereof.
"Borrowing Subsidiary" is defined in the introductory paragraph of this
Agreement.
"Business Day" means any day (other than a Saturday or Sunday) on which
banks are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the advance or continuation of, or conversion
into, or payment of a Eurocurrency Loan, on which banks are dealing in U.S.
Dollar deposits in the interbank Eurocurrency market in London, England and
Nassau, Bahamas and, if the applicable Business Day relates to the borrowing or
payment of a Eurocurrency Loan denominated in Canadian Dollars, on which banks
and foreign exchange markets are open for business in the city where
disbursements of or payments on such Loan are to be made.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate amount of all expenditures (whether paid in cash or
accrued as a liability) by such Person during that period for the acquisition or
leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of such Person in
accordance with GAAP.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"Canadian Base Rate" is defined in Section 1.4(b) hereof.
"Canadian Base Rate Loan" means a Loan bearing interest at a rate
specified in Section 1.4(b) hereof.
"Canadian Co-Agent" means Bank of Montreal, Toronto, Ontario, or any
successor appointed by the Administrative Agent.
"Canadian Dollars" and "Cdn $" each means the lawful currency of
Canada.
"CDOR Rate" is defined in Section 1.4(b) hereof.
-22-
"Change of Control" means any of (a) the acquisition by any "person" or
"group" (as such terms are used in sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) at any time of beneficial ownership of 50% or
more of the outstanding capital stock or other equity interests of the Parent on
a fully-diluted basis, or (b) the failure of individuals who are members of the
board of directors (or similar governing body) of the Parent on the Closing Date
(together with any new or replacement directors whose initial nomination for
election was approved by a majority of the directors who were either directors
on the Closing Date or previously so approved) to constitute a majority of the
board of directors (or similar governing body) of the Parent.
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 7.2 shall be satisfied or
waived in a manner acceptable to the Administrative Agent in its discretion.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral Account" is defined in Section 9.4 hereof.
"Commitments" means the Revolving Credit Commitments and the Term Loan
Commitments.
"Combination Agreement" means that certain Combination Agreement dated
as of August 16, 2004, by and among the Parent, the Borrowing Subsidiary, and
the Boomerang, all exhibits, schedules, and attachments thereto, and all
instruments and documents to be executed and delivered in connection therewith.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Parent, are treated as a single employer
under Section 414 of the Code.
"Credit" means any of the Revolving Credit or the Term Credit.
"Credit Event" means the advancing of any Loan, the continuation of or
conversion into a Eurocurrency Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"Domestic Subsidiary" means any Subsidiary which is not a Foreign
Subsidiary.
"EBITDA" means, with reference to any period, Net Income for such
period plus the sum of all amounts deducted in arriving at such Net Income
amount in respect of (a) Interest Expense for such period, (b) federal, state,
and local income taxes for such period, and (c) depreciation of fixed assets and
amortization of intangible assets for such period; provided that Net Income and
-23-
the amounts referred to in (a)-(c) above are to be calculated within the first
12 months of this Agreement as if the Boomerang Acquisition had taken place on
the first day of such period.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Eurocurrency Loan" means a Loan bearing interest at the rate specified
in Section 1.4(c) hereof.
"Eurocurrency Reserve Percentage" is defined in Section 1.4(b) hereof.
"Event of Default" means any event or condition identified as such in
Section 9.1 hereof.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of U.S. Base Rate
appearing in Section 1.4(a) hereof.
"Fixed Charges" means, with reference to any period, the sum of (a) all
payments of principal made or to be made during such period with respect to
Indebtedness for Borrowed Money of the Parent and its Subsidiaries, (b) cash
Interest Expense for such period, (c) federal, state, and local income taxes
paid or required to be paid by the Parent and its Subsidiaries during such
period, and (d) cash dividends paid or required to be paid by the Parent during
such period.
"Foreign Subsidiary" means each Subsidiary which (a) is organized under
the laws of a jurisdiction other than the United States of America or any state
thereof, (b) conducts substantially all of its business outside of the United
States of America, and (c) has substantially all of its assets outside of the
United States of America.
"Funds Transfer and Deposit Account Liability" means the liability of
any Borrower or any Guarantor owing to any of the Lenders, or any Affiliates of
such Lenders, arising out of (a) the execution or processing of electronic
transfers of funds by automatic clearing house transfer, wire transfer or
otherwise to or from deposit accounts of any Borrower and/or any Guarantor now
or hereafter maintained with any of the Lenders or their Affiliates, (b) the
acceptance for deposit or the honoring for payment of any check, draft or other
item with respect to any such deposit accounts, and (c) any other deposit,
disbursement, and cash management services afforded to any Borrower or any
Guarantor by any of such Lenders or their Affiliates.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Guarantor" and "Guarantors" each is defined in Section 4.1 hereof.
"Guaranty" and "Guaranties" each is defined in Section 4.1 hereof.
-24-
"Hedging Liability" means the liability of any Borrower or any
Guarantor to any of the Lenders, or any Affiliates of such Lenders, in respect
of any interest rate, foreign currency, and/or commodity swap, exchange, cap,
collar, floor, forward, future or option agreement, or any other similar
interest rate, currency or commodity hedging arrangement, as any Borrower or
such Guarantor, as the case may be, may from time to time enter into with any
one or more of the Lenders party to this Agreement or their Affiliates.
"Inactive Subsidiary" means any Subsidiary who is not actively engaged
in any trade or business and has total assets with a market value of not more
than $50,000. As of the date of this Agreement, Vehicle Recovery Systems Company
is the only Inactive Subsidiary.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (a) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (b) all indebtedness for the deferred purchase price of property or
services (other than trade accounts payable arising in the ordinary course of
business), (c) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness, (d) all Capitalized Lease Obligations of such Person, and
(e) all obligations of such Person on or with respect to letters of credit,
bankers' acceptances and other extensions of credit whether or not representing
obligations for borrowed money.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Parent and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Interest Period" is defined in Section 1.7 hereof.
"L/C Issuer" means the Administrative Agent, or any other Lender
requested by the Parent and approved by the Administrative Agent in its sole
discretion with respect to any Letter of Credit.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"L/C Sublimit" means U.S.$2,000,000, as reduced pursuant to the terms
hereof.
"Lenders" means and includes Xxxxxx Trust and Savings Bank, Bank of
Montreal, and the other financial institutions from time to time party to this
Agreement, including each assignee Lender pursuant to Section 13.12 hereof.
"Lending Office" is defined in Section 10.4 hereof.
"Letter of Credit" is defined in Section 1.3(a) hereof.
-25-
"Leverage Ratio" means, as of the last day of any fiscal quarter of the
Parent, the ratio of Total Funded Debt of the Parent and its Subsidiaries as of
the last day of such fiscal quarter to EBITDA of the Parent and its Subsidiaries
for the period of four fiscal quarters then ended.
"LIBOR" is defined in Section 1.4(c) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" means any Revolving Loan or Term Loan, whether outstanding as a
U.S. Base Rate Loan, Canadian Base Rate Loan or Eurocurrency Loan or otherwise,
each of which is a "type" of Loan hereunder.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Guaranties, and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.
"Material Adverse Effect" means (a) a material adverse change in, or
material adverse effect upon, the operations, business, Property, condition
(financial or otherwise) or prospects of the Parent or of the Parent and its
Subsidiaries taken as a whole, (b) a material impairment of the ability of the
Parent or any Subsidiary to perform its material obligations under any Loan
Document or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Parent or any Subsidiary of any Loan
Document or the rights and remedies of the Administrative Agent and the Lenders
thereunder.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, with reference to any period, the net income (or
net loss) of the Parent and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Subsidiary of, or has merged into or consolidated
with, the Parent or another Subsidiary, and (b) the net income (or net loss) of
any Person (other than a Subsidiary) in which the Parent or any of its
Subsidiaries has a equity interest in, except to the extent of the amount of
dividends or other distributions actually paid to the Parent or any of its
Subsidiaries during such period.
"Net Worth" means, at any time the same is to be determined, total
shareholder's equity (including capital stock, additional paid-in capital, and
retained earnings after deducting treasury stock) of the Parent and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Notes" means and includes the Revolving Notes and the Term Notes.
"Obligations" means all obligations of the Borrowers to pay principal
and interest on the Loans, all Reimbursement Obligations owing under the
Applications, all fees and charges
-26-
payable hereunder, and all other payment obligations of any Borrower or any
Guarantor arising under or in relation to any Loan Document, in each case
whether now existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or acquired.
"Original Dollar Amount" means the amount of any Obligation denominated
in U.S. Dollars and, in relation to any Loan denominated in Canadian Dollars,
the U.S. Dollar Equivalent of such Loan on the day it is advanced or continued
for an Interest Period.
"Parent" is defined in the introductory paragraph of this Agreement.
"Participating Interest" is defined in Section 1.3(d) hereof.
"Participating Lender" is defined in Section 1.3(d) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means for any Lender its Revolver Percentage or Term Loan
Percentage, as applicable; and where the term "Percentage" is applied on an
aggregate basis (including, without limitation, Section 11.6 hereof), such
aggregate percentage shall be calculated by aggregating the separate components
of the Revolver Percentage, and Term Loan Percentage, and expressing such
components on a single percentage basis.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (a) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (b) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Property" means, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"Reimbursement Obligation" is defined in Section 1.3(c) hereof.
"Required Lenders" means, as of the date of determination thereof and
on a U.S. Dollar Equivalent basis, Lenders whose outstanding Loans and interests
in Letters of Credit and Unused Revolving Credit Commitments constitute more
than 66-2/3% of the sum of the total outstanding Loans, interests in Letters of
Credit, and Unused Revolving Credit Commitments of the Lenders.
-27-
"Revolver Percentage" means, for each Lender, the percentage of the
Revolving Credit Commitments represented by such Lender's Revolving Credit
Commitment or, if the Revolving Credit Commitments have been terminated, the
percentage held by such Lender (including through participation interests in
Reimbursement Obligations) of the aggregate principal amount of all Revolving
Loans and L/C Obligations then outstanding.
"Revolving Credit" means the credit facility for making Revolving Loans
and issuing Letters of Credit described in Sections 1.2 and 1.3 hereof.
"Revolving Credit Commitment" means, as to any Lender, the obligation
of such Lender to make Revolving Loans and to participate in Letters of Credit
issued for the account of the Parent hereunder in an aggregate principal or face
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender's name on Schedule 1 attached hereto and made a part hereof, as the
same may be reduced or modified at any time or from time to time pursuant to the
terms hereof. The Parent and the Lenders acknowledge and agree that the
Revolving Credit Commitments of the Lenders aggregate U.S. $10,000,000 on the
date hereof.
"Revolving Credit Termination Date" means October 29, 2009, or such
earlier date on which the Revolving Credit Commitments are terminated in whole
pursuant to Section 1.13, 9.2 or 9.3 hereof.
"Revolving Loan" is defined in Section 1.2 hereof and, as so defined,
includes a U.S. Base Rate Loan or a Eurocurrency Loan, each of which is a "type"
of Revolving Loan hereunder.
"Revolving Note" is defined in Section 1.11 hereof.
"S&P" means Standard & Poor's Ratings Services Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"Subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
Unless otherwise expressly noted herein, the term "Subsidiary" means a
Subsidiary of the Parent or of any of its direct or indirect Subsidiaries.
"Term Credit" means the credit facility for the Term Loans described in
Section 1.1 hereof.
"Term Loan" is defined in Section 1.1(a) hereof and, as so defined,
includes a Canadian Base Rate Loan or a Eurocurrency Loan, each of which is a
"type" of Term Loan hereunder.
"Term Loan Commitment" means, as to any Lender, the obligation of such
Lender to make its Term Loan on the Closing Date in the principal amount not to
exceed the amount set forth opposite such Lender's name on Schedule 1 attached
hereto and made a part hereof. The
-28-
Borrowing Subsidiary and the Lenders acknowledge and agree that the Term Loan
Commitments of the Lenders aggregate Canadian $39,280,000.00 on the date hereof.
"Term Loan Percentage" means, for each Lender, the percentage of the
Term Loan Commitments represented by such Lender's Term Loan Commitment or, if
the Term Loan Commitments have been terminated or have expired, the percentage
held by such Lender of the aggregate principal amount of all Term Loans then
outstanding.
"Term Note" is defined in Section 1.11 hereof.
"Total Funded Debt" means, at any time the same is to be determined,
the sum (but without duplication) of (a) all Indebtedness for Borrowed Money of
the Parent and its Subsidiaries at such time, and (b) all Indebtedness for
Borrowed Money of any other Person which is directly or indirectly guaranteed by
the Parent or any of its Subsidiaries or which the Parent or any of its
Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which the Parent or any of its Subsidiaries has
otherwise assured a creditor against loss.
"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Unused Revolving Credit Commitments" means, at any time, the
difference between the Revolving Credit Commitments then in effect and the
aggregate outstanding principal amount of Revolving Loans and L/C Obligations.
"U.S. Base Rate" is defined in Section 1.4(a) hereof.
"U.S. Base Rate Loan" means a Loan bearing interest at a rate specified
in Section 1.4(a) hereof.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"U.S. Dollar Equivalent" means (a) the amount of any Obligation or
Letter of Credit denominated in U.S. Dollars, (b) in relation to any Obligation
denominated in Canadian Dollars, the amount of U.S. Dollars which would be
realized by converting Canadian Dollars into U.S. Dollars at the exchange rate
quoted to the Administrative Agent, at approximately 11:00 a.m. (London time)
three Business Days prior to the date on which a computation thereof is required
to be made by major banks in the interbank foreign exchange market for the
purchase of U.S. Dollars for such currency.
"Voting Stock" of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary power for
the election of directors or other similar
-29-
governing body of such Person, other than stock or other equity interests having
such power only by reason of the happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Parent and/or one
or more Wholly-owned Subsidiaries within the meaning of this definition.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois, time unless otherwise specifically provided. 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, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
Section 5.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the Parent
or the Required Lenders may by notice to the Lenders and the Parent,
respectively, require that the Lenders and the Parent negotiate in good faith to
amend such covenants, standards, and terms so as equitably to reflect such
change in accounting principles, with the desired result being that the criteria
for evaluating the financial condition of the Parent and its Subsidiaries shall
be the same as if such change had not been made. No delay by the Parent or the
Required Lenders in requiring such negotiation shall limit their right to so
require such a negotiation at any time after such a change in accounting
principles. Until any such covenant, standard, or term is amended in accordance
with this Section 5.3, financial covenants shall be computed and determined in
accordance with GAAP in effect prior to such change in accounting principles.
Without limiting the generality of the foregoing, the Parent shall neither be
deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may be, would not exist but for the occurrence of a
change in accounting principles after the date hereof.
-30-
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Parent represents and warrants to the Administrative Agent and the
Lenders as follows (it being understood that, upon the Boomerang Acquisition,
each of the following representations and warranties relating to Subsidiaries
shall apply to Boomerang and each of its Subsidiaries):
Section 6.1. Organization and Qualification. The Parent is duly
organized, validly existing, and in good standing as a corporation under the
laws of the State of Massachusetts, has full and adequate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect. The Borrowing Subsidiary is duly organized,
validly existing, and in good standing as a corporation under the laws of
Canada, has full and adequate power to own its Property and conduct its business
as now conducted, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it or the nature
of the Property owned or leased by it requires such licensing or qualifying,
except where the failure to do so would not have a Material Adverse Effect.
Section 6.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing, and in good standing under the laws of the jurisdiction in which it is
organized, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the nature of the Property owned or leased by it requires such licensing
or qualifying, except where the failure to do so would not have a Material
Adverse Effect. Schedule 6.2 hereto (as the same may be deemed amended from time
to time pursuant to Section 8.16 hereof) identifies each Subsidiary, the
jurisdiction of its organization, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Parent and the other Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law), a description of each class of
its authorized capital stock and other equity interests and the number of shares
of each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by the Parent or another
Subsidiary are owned, beneficially and of record, by the Parent or such
Subsidiary free and clear of all Liens. There are no outstanding commitments or
other obligations of any Subsidiary to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of any Subsidiary.
Section 6.3. Authority and Validity of Obligations. The Parent has full
right and authority to enter into this Agreement and the other Loan Documents
executed by it, to make the borrowings herein provided for, to issue its Notes
in evidence thereof, and to perform all of its obligations hereunder and under
the other Loan Documents executed by it. Each Subsidiary has full right and
authority to enter into the Loan Documents executed by it, to guarantee the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, and to
-31-
perform all of its obligations under the Loan Documents executed by it. The Loan
Documents delivered by the Parent and its Subsidiaries have been duly
authorized, executed, and delivered by such Persons and constitute valid and
binding obligations of the Parent and its Subsidiaries enforceable against them
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law); and this Agreement and the other Loan Documents do not, nor
does the performance or observance by the Parent or any Subsidiary of any of the
matters and things herein or therein provided for, (a) contravene or constitute
a default under any provision of law or any judgment, injunction, order or
decree binding upon the Parent or any Subsidiary or any provision of the
organizational documents (e.g., charter, certificate or articles of
incorporation and by-laws, certificate or articles of association and operating
agreement, partnership agreement, or other similar organizational documents) of
the Parent or any Subsidiary, (b) contravene or constitute a default under any
covenant, indenture or agreement of or affecting the Parent or any Subsidiary or
any of their Property, in each case where such contravention or default,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (c) result in the creation or imposition of any Lien
on any Property of the Parent or any Subsidiary other than the Liens granted in
favor of the Administrative Agent pursuant to the Collateral Documents.
Section 6.4. Use of Proceeds; Margin Stock. The Borrowing Subsidiary
shall use the proceeds of the Term Loans to finance payment of the purchase
price of the Boomerang Acquisition and to repay certain outstanding indebtedness
of the Boomerang concurrently therewith; and the Parent shall use the proceeds
of the Revolving Credit for its general working capital purposes and for such
other legal and proper purposes as are consistent with all applicable laws.
Neither the Parent nor any Subsidiary is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan or any other extension of
credit made hereunder will be used to purchase or carry any such margin stock or
to extend credit to others for the purpose of purchasing or carrying any such
margin stock. Margin stock (as hereinabove defined) constitutes less than 25% of
the assets of the Parent and its Subsidiaries which are subject to any
limitation on sale, pledge or other restriction hereunder.
Section 6.5. Financial Reports. (a) The consolidated balance sheet of
the Parent and its Subsidiaries as at December 31, 2003, and the related
consolidated statements of income, retained earnings and cash flows of the
Parent and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
Deloitte & Touche LLP, independent public accountants, and the unaudited interim
consolidated balance sheet of the Parent and its Subsidiaries as at June 30,
2004, and the related consolidated statements of income, retained earnings and
cash flows of the Parent and its Subsidiaries for the 6 months then ended,
heretofore furnished to the Administrative Agent and the Lenders, fairly present
(subject, in the case of the June 30, 2004 financial statements, to year-end
audit adjustments) the consolidated financial condition of the Parent and its
Subsidiaries as at said dates and the consolidated results of their operations
and cash flows for the periods then ended in conformity with GAAP applied on a
consistent basis.
-32-
(b) The consolidated balance sheet of Boomerang and its Subsidiaries as
at April 30, 2004, and the related consolidated statements of income, retained
earnings and cash flows of Boomerang and its Subsidiaries for the fiscal year
then ended, and accompanying notes thereto, which financial statements are
accompanied by the audit report of RSM Xxxxxxx, independent public accountants,
and the unaudited interim consolidated balance sheet of Boomerang and its
Subsidiaries as at July 31, 2004, and the related consolidated statements of
income, retained earnings and cash flows of Boomerang and its Subsidiaries for
the 3 months then ended, heretofore furnished to the Administrative Agent and
the Lenders, fairly present to the best of the Parent's knowledge the
consolidated financial condition of Boomerang and its Subsidiaries as at said
dates and the consolidated results of their operations and cash flows for the
periods then ended in conformity with Canadian generally accepted accounting
principles applied on a consistent basis.
(c) Neither the Parent nor any Subsidiary has contingent liabilities
which are material to it other than as indicated on such financial statements
or, with respect to future periods, on the financial statements furnished
pursuant to Section 8.5 hereof or as otherwise disclosed in writing by the
Borrowers to the Administrative Agent and the Lenders.
Section 6.6. No Material Adverse Change. Since December 31, 2003, there
has been no change in the condition (financial or otherwise) or business
prospects of the Parent and its Subsidiaries, taken as a whole, or, to the best
of the Parent's knowledge, of Boomerang and its Subsidiaries, taken as a whole,
except, in either case, those occurring in the ordinary course of business, none
of which individually or in the aggregate have been materially adverse.
Section 6.7. Full Disclosure. The statements and information furnished
to the Administrative Agent and the Lenders in connection with the negotiation
of this Agreement and the other Loan Documents and the commitments by the
Lenders to provide all or part of the financing contemplated hereby, taken as a
whole, do not contain any untrue statements of a material fact or omit a
material fact necessary to make the material statements contained herein or
therein not misleading, the Administrative Agent and the Lenders acknowledging
that as to any projections furnished to the Administrative Agent and the
Lenders, the Parent only represents that the same were prepared on the basis of
information and estimates the Parent believed to be reasonable on the date
hereof.
Section 6.8. Trademarks, Franchises, and Licenses. The Parent and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how, and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.
Section 6.9. Governmental Authority and Licensing. The Parent and its
Subsidiaries have received all licenses, permits, and approvals of all federal,
state, provincial, and local governmental authorities, if any, necessary to
conduct their businesses, in each case where the failure to obtain or maintain
the same could reasonably be expected to have a Material Adverse Effect. No
investigation or proceeding which, if adversely determined, could reasonably be
-33-
expected to result in revocation or denial of any material license, permit or
approval is pending or, to the knowledge of the Parent, threatened.
Section 6.10. Good Title. The Parent and its Subsidiaries have good and
defensible title (or valid leasehold interests) to their assets as reflected on
the most recent consolidated balance sheet of the Parent and its Subsidiaries
furnished to the Administrative Agent and the Lenders (except for sales of
assets in the ordinary course of business and as otherwise permitted under
Section 8.10 hereof), subject to no Liens other than such thereof as are
permitted by Section 8.8 hereof.
Section 6.11. Litigation and Other Controversies. Except as disclosed in
the Parent's letter to the Administrative Agent and the Lenders dated October
29, 2004, there is no litigation or governmental or arbitration proceeding or
labor controversy pending, nor to the knowledge of the Parent threatened,
against the Parent or any Subsidiary or any of their Property which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 6.12. Taxes. All material tax returns required to be filed by
the Parent or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees, and other governmental charges upon the Parent or
any Subsidiary or upon any of its Property, income or franchises, which are
shown to be due and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and as to which adequate reserves established in accordance
with GAAP have been provided. The Parent does not know of any proposed
additional tax assessment that is material against it or its Subsidiaries for
which adequate provisions in accordance with GAAP have not been made on their
accounts. Adequate provisions in accordance with GAAP for taxes on the books of
the Parent and each Subsidiary have been made for all open years, and for its
current fiscal period.
Section 6.13. Approvals. No authorization, consent, license or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of any other Person, is
or will be necessary to the valid execution, delivery or performance by the
Parent or any Subsidiary of any Loan Document, except for such approvals which
have been obtained prior to the date of this Agreement and remain in full force
and effect.
Section 6.14. Affiliate Transactions. Neither the Parent nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
on terms and conditions which are materially less favorable to the Parent or
such Subsidiary than would be usual and customary in similar contracts or
agreements between Persons not affiliated with each other.
Section 6.15. Investment Company; Public Utility Holding Company.
Neither the Parent nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
-34-
Section 6.16. ERISA. The Parent and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA. Neither the Parent nor any Subsidiary has any contingent
liabilities with respect to any post-retirement benefits under a Welfare Plan,
other than liability for continuation coverage described in article 6 of Title I
of ERISA.
Section 6.17. Compliance with Laws. The Parent and its Subsidiaries are
in compliance with the requirements of all federal, state, provincial, and local
laws, rules and regulations applicable to or pertaining to their Property or
business operations (including, without limitation, the Occupational Safety and
Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither the Parent nor any Subsidiary has received
notice to the effect that its operations are not in compliance with any of the
requirements of applicable federal, state, provincial, or local environmental,
health, and safety statutes and regulations or is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, where any such non-compliance or remedial action, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
Section 6.18. Other Agreements. Neither the Parent nor any Subsidiary is
in default under the terms of any covenant, indenture or agreement of or
affecting such Person or any of its Property, which default if uncured could
reasonably be expected to have a Material Adverse Effect.
Section 6.19. Boomerang Acquisition. The Parent has heretofore delivered
to the Lenders a true and correct copy of the Combination Agreement and, except
to the extent consented to in writing by the Administrative Agent and the
Required Lenders, the Combination Agreement has not been amended or modified in
any respect and no condition to the effectiveness thereof or the obligations of
the Parent or the Borrowing Subsidiary thereunder has been waived. The Parent
and the Borrowing Subsidiary and, to the best of the knowledge of the Parent,
Boomerang have all necessary right, power, and authority to consummate the
transactions contemplated by the Combination Agreement and to perform all of
their obligations thereunder. The Combination Agreement has been duly
authorized, executed, and delivered by the Parent and the Borrowing Subsidiary
and, to the best of the knowledge of the Parent, Boomerang and the Combination
Agreement constitutes the valid and binding obligation of the Parent and the
Borrowing Subsidiary and, to the best of the knowledge of the Parent, Boomerang,
enforceable against each of them in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law); and the Combination Agreement does not,
nor does the observance or performance by the Parent and the Borrowing
Subsidiary or, to the best of the knowledge of the Parent, Boomerang of any of
the matters and things therein provided for, contravene or constitute a default
under (i) any provision of law or any judgment, injunction,
-35-
order, or decree binding upon such Person that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (ii)
any provision of the charter, articles of incorporation, or by-laws of such
Person, (iii) any covenant, indenture, or agreement of or affecting such Person
or any of its Property that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, or result in the creation or
imposition of any Lien on any such Person's Property. No authorization, consent,
license, or exemption from, or filing or registration with, any court or
governmental department, agency, or instrumentality, nor any approval or consent
of any other Person, is or will be necessary to the valid execution, delivery,
or performance by the Parent or the Borrowing Subsidiary or, to the best of the
knowledge of the Parent, Boomerang of the Combination Agreement or of any other
instrument or document executed and delivered in connection therewith, except
for such thereof that will be obtained and be in full force and effect prior to
the initial Credit Event hereunder. Neither the Parent nor the Borrowing
Subsidiary nor, to the best of the knowledge of the Parent, Boomerang are in
default in any of their respective obligations under the Combination Agreement.
Section 6.20. No Default. No Default or Event of Default has occurred
and is continuing.
SECTION 7. CONDITIONS PRECEDENT.
The obligation of each Lender to advance, continue or convert any Loan
(other than the continuation of, or conversion into, a U.S. Base Rate Loan or
Canadian Base Rate Loan, as applicable) or of the L/C Issuer to issue, extend
the expiration date (including by not giving notice of non-renewal) of or
increase the amount of any Letter of Credit under this Agreement, shall be
subject to the following conditions precedent:
Section 7.1. All Credit Events. At the time of each Credit Event
hereunder:
(a) each of the representations and warranties set forth
herein and in the other Loan Documents shall be and remain true and
correct as of said time, except to the extent the same expressly relate
to an earlier date;
(b) no Default or Event of Default shall have occurred and be
continuing or would occur as a result of such Credit Event;
(c) in the case of a Borrowing the Administrative Agent shall
have received the notice required by Section 1.6 hereof, in the case of
the issuance of any Letter of Credit the L/C Issuer shall have received
a duly completed Application for such Letter of Credit together with
any fees called for by Section 2.1 hereof, and, in the case of an
extension or increase in the amount of a Letter of Credit, a written
request therefor in a form acceptable to the L/C Issuer together with
fees called for by Section 2.1 hereof; and
(d) such Credit Event shall not violate any order, judgment
or decree of any court or other authority or any provision of law or
regulation applicable to the Administrative Agent, the L/C Issuer, or
any Lender (including, without limitation, Regulation U of the Board of
Governors of the Federal Reserve System) as then in effect.
-36-
Each request for a Borrowing hereunder and each request for the
issuance of, increase in the amount of, or extension of the expiration date of,
a Letter of Credit shall be deemed to be a representation and warranty by the
relevant Borrower on the date on such Credit Event as to the facts specified in
subsections (a) through (c), both inclusive, of this Section.
Section 7.2. Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) the Administrative Agent shall have received for each
Lender this Agreement duly executed by the Parent, the Borrowing
Subsidiary, the initial Guarantors, and the Lenders;
(b) the Administrative Agent shall have received for each
Lender such Lender's duly executed Revolving Notes of the Parent and,
in the case of the Term B Notes, the Borrowing Subsidiary dated the
date hereof and otherwise in compliance with the provisions of Section
1.11 hereof;
(c) the Administrative Agent shall have received for each
Lender copies of the articles of incorporation and bylaws of the
Parent, the Borrowing Subsidiary, and the initial Guarantors (or
comparable organizational documents) and any amendments thereto,
certified in each instance by its Secretary or Assistant Secretary;
(d) the Administrative Agent shall have received for each
Lender copies of resolutions of the Board of Directors of the Parent,
the Borrowing Subsidiary, and the initial Guarantors (or similar
governing body) authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby,
together with specimen signatures of the persons authorized to execute
such documents on its behalf, all certified in each instance by its
Secretary or Assistant Secretary;
(e) the Administrative Agent shall have received for each
Lender copies of the certificates of good standing for the Parent,
certificates of compliance for the Borrowing Subsidiary, and the
substantive equivalent certificates for the initial Guarantors (dated
no earlier than 30 days prior to the date hereof) from the office of
the secretary of the state of its incorporation or organization and of
each state in which it is qualified to do business as a foreign
corporation or organization;
(f) the Administrative Agent shall have received for each
Lender a list of the Parent's Authorized Representatives;
(g) the Administrative Agent shall have received for itself
and for the Lenders the initial fees called for by Section 2.1 hereof;
(h) the capital and organizational structure of the Parent
and its Subsidiaries shall be satisfactory to the Administrative Agent
and the Lenders, including, without limitation, evidence that the
Parent's Net Worth as of the Closing Date, after giving effect to the
initial advances under the Credits, is not less than $29,188,000;
-37-
(i) the Administrative Agent shall have received financing
statement, tax, and judgment lien search results against the Property
of the Parent, the Borrowing Subsidiary, and the initial Guarantors and
of Boomerang and its Subsidiaries (if any) evidencing the absence of
Liens on its Property except as permitted by Section 8.8 hereof;
(j) the Administrative Agent shall have received a copy of
the executed Combination Agreement which shall in form and substance
reasonably acceptable to the Administrative Agent;
(k) other than the funding of the Term Loans, all conditions
to the Borrowing Subsidiary acquiring not less than 95% of the capital
stock of Boomerang pursuant to the Combination Agreement shall have
been satisfied and the Administrative Agent shall have received such
evidence thereof as it shall reasonably request;
(l) the Administrative Agent shall have received for each
Lender the favorable written opinion of counsel to the Parent and each
Subsidiary, in form and substance satisfactory to the Administrative
Agent; and
(m) the Administrative Agent shall have received for the
account of the Lenders such other agreements, instruments, documents,
certificates, and opinions as the Administrative Agent may reasonably
request.
SECTION 8. COVENANTS.
The Parent agrees that, so long as any credit is available to or in use
by the Parent or the Borrowing Subsidiary hereunder, except to the extent
compliance in any case or cases is waived in writing pursuant to the terms of
Section 13.13 hereof:
Section 8.1. Maintenance of Business. The Parent shall, and shall cause
each Subsidiary to, preserve and maintain its existence, except as otherwise
provided in Section 8.10(c) hereof. The Parent shall, and shall cause each
Subsidiary to, preserve and keep in force and effect all licenses, permits,
franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights, and other proprietary rights necessary to the proper conduct of its
business where the failure to do so could reasonably be expected to have a
Material Adverse Effect.
Section 8.2. Maintenance of Properties. The Parent shall, and shall
cause each Subsidiary to, maintain, preserve, and keep its property, plant, and
equipment in good repair, working order and condition (ordinary wear and tear
excepted), and shall from time to time make all needful and proper repairs,
renewals, replacements, additions, and betterments thereto so that at all times
the efficiency thereof shall be fully preserved and maintained, except to the
extent that, in the reasonable business judgment of such Person, any such
Property is no longer necessary for the proper conduct of the business of such
Person.
Section 8.3. Taxes and Assessments. The Parent shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all
material taxes, rates, assessments, fees, and governmental charges upon or
against it or its Property, in each case before the same become
-38-
delinquent and before penalties accrue thereon, unless and to the extent that
the same are being contested in good faith and by appropriate proceedings which
prevent enforcement of the matter under contest and adequate reserves are
provided therefor.
Section 8.4. Insurance. The Parent shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Parent shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including, without limitation, employers'
and public liability risks) with good and responsible insurance companies as and
to the extent usually insured by Persons similarly situated and conducting
similar businesses. The Parent shall, upon the request of the Administrative
Agent, furnish to the Administrative Agent and the Lenders a certificate setting
forth in summary form the nature and extent of the insurance maintained pursuant
to this Section.
Section 8.5. Financial Reports. The Parent shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Administrative Agent, each Lender and each of their
duly authorized representatives such information respecting the business and
financial condition of the Parent and each Subsidiary as the Administrative
Agent or such Lender may reasonably request; and without any request, shall
furnish to the Administrative Agent and the Lenders:
(a) as soon as available, and in any event within 45 days
after the last day of each of the first three fiscal quarters of each
fiscal year of the Parent, a copy of the consolidated balance sheet of
the Parent and its Subsidiaries as of the last day of such fiscal
quarter and the consolidated statements of income, retained earnings,
and cash flows of the Parent and its Subsidiaries for the fiscal
quarter and for the fiscal year-to-date period then ended, each in
reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by
the Parent in accordance with GAAP (subject to the absence of footnote
disclosures and year-end audit adjustments) and certified to by its
chief financial officer or another officer of the Parent acceptable to
the Administrative Agent;
(b) as soon as available, and in any event within 90 days
after the last day of each fiscal year of the Parent, a copy of the
consolidated balance sheet of the Parent and its Subsidiaries as of the
last day of the fiscal year then ended and the consolidated statements
of income, retained earnings, and cash flows of the Parent and its
Subsidiaries for the fiscal year then ended, and accompanying notes
thereto, each in reasonable detail showing in comparative form the
figures for the previous fiscal year, accompanied in the case of the
consolidated financial statements by an unqualified opinion of Deloitte
& Touche LLP or another firm of independent public accountants of
recognized national standing, selected by the Parent (and reasonably
satisfactory to the Administrative Agent and the Required Lenders
acting in good faith and in a commercially reasonable manner), to the
effect that the consolidated financial statements have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial
-39-
condition of the Parent and its Subsidiaries as of the close of such
fiscal year and the results of their operations and cash flows for the
fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance
with generally accepted auditing standards and, accordingly, such
examination included such tests of the accounting records and such
other auditing procedures as were considered necessary in the
circumstances;
(c) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in
writing concerning significant aspects of the Parent's or any
Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(d) promptly after the sending or filing thereof, copies of
each financial statement, report, notice or proxy statement sent by the
Parent or any Subsidiary to its stockholders or other equity holders,
and copies of each regular, periodic or special report, registration
statement or prospectus (including all Form 10-K, Form 10-Q and Form
8-K reports) filed by the Parent or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency;
(e) as soon as available, and in any event prior to January
31st of each fiscal year of the Parent, a copy of the Parent's
consolidated operating budget for the then current fiscal year, such
operating budget to show the Parent's projected consolidated revenues,
expenses and balance sheet on a quarter-by-quarter basis, such
operating budget to be in reasonable detail prepared by the Parent and
in form reasonably satisfactory to the Administrative Agent and the
Required Lenders (which shall include a summary of all assumptions made
in preparing such business plan);
(f) notice of any Change of Control;
(g) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Parent, written notice of
(i) any threatened or pending litigation or governmental or arbitration
proceeding or labor controversy against the Parent or any Subsidiary or
any of their Property which could reasonably be expected to have a
Material Adverse Effect or (ii) the occurrence of any Default or Event
of Default hereunder; and
(h) with each of the financial statements furnished to the
Lenders pursuant to subsections (a) and (b) above, a written
certificate in the form attached hereto as Exhibit F signed by the
chief financial officer of the Parent or another officer of the Parent
acceptable to the Administrative Agent to the effect that to the best
of such officer's knowledge and belief no Default or Event of Default
has occurred during the period covered by such statements or, if any
such Default or Event of Default has occurred during such period,
setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Parent or any Subsidiary to
remedy the same. Such certificate shall also set forth the calculations
supporting such statements in respect of Section 8.22 hereof.
-40-
Section 8.6. Inspection. The Parent shall, and shall cause each
Subsidiary to, permit the Administrative Agent, each Lender, and each of their
duly authorized representatives and agents to visit and inspect any of its
Property, corporate books, and financial records, to examine and make copies of
its books of accounts and other financial records, and to discuss its affairs,
finances, and accounts with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision the Parent
hereby authorizes such accountants to discuss with the Administrative Agent and
such Lenders the finances and affairs of the Parent and its Subsidiaries) at
such reasonable times and intervals as the Administrative Agent or any such
Lender may designate and with reasonable prior notice to the Parent.
Section 8.7. Borrowings and Guaranties. The Parent shall not, nor shall
it permit any Subsidiary to, issue, incur, assume, create or have outstanding
any Indebtedness for Borrowed Money, or be or become liable as endorser,
guarantor, surety or otherwise for any debt, obligation or undertaking of any
other Person, or otherwise agree to provide funds for payment of the obligations
of another, or supply funds thereto or invest therein or otherwise assure a
creditor of another against loss, or apply for or become liable to the issuer of
a letter of credit which supports an obligation of another, or subordinate any
claim or demand it may have to the claim or demand of any other Person;
provided, however, that the foregoing shall not restrict nor operate to prevent:
(a) the Obligations, Hedging Liability, and Funds Transfer
and Deposit Account Liability of the Parent and its Subsidiaries owing
to the Administrative Agent and the Lenders (and their Affiliates);
(b) purchase money indebtedness and Capitalized Lease
Obligations of the Parent and its Subsidiaries in an amount not to
exceed the U.S. Dollar Equivalent of $1,000,000 in the aggregate at any
one time outstanding;
(c) obligations arising out of interest rate, foreign
currency, and commodity hedging agreements entered into with financial
institutions in the ordinary course of business;
(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) intercompany advances from time to time owing by any
Guarantor to the Parent or another Guarantor or by the Parent to a
Guarantor in the ordinary course of business;
(f) intercompany advances from time to time owing by any
Foreign Subsidiary to the Parent or any Guarantor to the extent
permitted by Section 8.9(j) hereof;
(g) indebtedness of the Parent and its Subsidiaries disclosed
on Schedule 8.7/8.8 hereof; and
-41-
(h) unsecured indebtedness of the Parent and its Subsidiaries
not otherwise permitted by this Section in an amount not to exceed the
U.S. Dollar Equivalent of $5,000,000 in the aggregate at any one time
outstanding.
Section 8.8. Liens. The Parent shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges (other than Liens arising under ERISA), good faith cash
deposits in connection with tenders, contracts or leases to which the
Parent or any Subsidiary is a party or other cash deposits required to
be made in the ordinary course of business, provided in each case that
the obligation is not for borrowed money and that the obligation
secured is not overdue or, if overdue, is being contested in good faith
by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor or
which do not exceed the U.S. Dollar Equivalent of $100,000 in the
aggregate at any one time outstanding;
(b) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar Liens arising in the ordinary course of
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest or which do not exceed the U.S.
Dollar Equivalent of $100,000 in the aggregate at any one time
outstanding;
(c) judgment liens and judicial attachment liens not
constituting an Event of Default under Section 9.1(g) hereof and the
pledge of assets for the purpose of securing an appeal, stay or
discharge in the course of any legal proceeding, provided that the
aggregate amount of such judgment liens and attachments and liabilities
of the Parent and its Subsidiaries secured by a pledge of assets
permitted under this subsection, including interest and penalties
thereon, if any, shall not be in excess of the U.S. Dollar Equivalent
of $1,500,000 at any one time outstanding;
(d) Liens on equipment of the Parent or any Subsidiary
created solely for the purpose of securing indebtedness permitted by
Section 8.7(b) hereof, representing or incurred to finance the purchase
price of such Property, provided that no such Lien shall extend to or
cover other Property of the Parent or such Subsidiary other than the
respective Property so acquired, and the principal amount of
indebtedness secured by any such Lien shall at no time exceed the
purchase price of such Property, as reduced by repayments of principal
thereon;
(e) any interest or title of a lessor under any operating
lease;
(f) Liens, if any, described on Schedule 8.7/8.8 hereof; and
-42-
(g) easements, rights-of-way, restrictions, and other similar
encumbrances against real property incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and
which do not materially detract from the value of the Property subject
thereto or materially interfere with the ordinary conduct of the
business of the Parent or any Subsidiary.
Section 8.9. Investments, Acquisitions, Loans and Advances. The Parent
shall not, nor shall it permit any Subsidiary to, directly or indirectly, make,
retain or have outstanding any investments (whether through purchase of stock or
obligations or otherwise) in, or loans or advances to (other than for travel
advances and other similar cash advances made to employees in the ordinary
course of business), any other Person, or acquire all or any substantial part of
the assets or business of any other Person or division thereof; provided,
however, that the foregoing shall not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within
18-months of the date of acquisition thereof;
(b) investments in commercial paper rated at least P-1 by
Xxxxx'x and at least A-1 by S&P maturing within 18-months of the date
of acquisition thereof;
(c) investments in certificates of deposit issued by any
Lender or by any United States commercial bank having capital and
surplus of not less than $100,000,000 which have a maturity of
18-months or less;
(d) investments in repurchase obligations with a term of not
more than 7 days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the
qualifications specified in subsection (c) above, provided all such
agreements require physical delivery of the securities securing such
repurchase agreement, except those delivered through the Federal
Reserve Book Entry System;
(e) investments in money market funds that invest solely, and
which are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding
subsections (a), (b), (c), and (d) above;
(f) investments existing on the date of this Agreement in
Subsidiaries, including investments in the Borrowing Subsidiary and
Boomerang after giving effect to the Borrowing Acquisition;
(g) investments from time to time in Guarantors hereunder;
(h) intercompany advances made from time to time by the
Parent or a Guarantor to another Guarantor or by a Guarantor to the
Parent in the ordinary course of business;
-43-
(i) the Parent's initial investment in LoJack Ireland/Bermuda
and LoJack Ireland necessary to establish the Vehicle Recovery System
Foreign Subsidiary Distribution Arrangement;
(j) investments in, and loans or advances to, Subsidiaries
who are not Guarantors hereunder (determined exclusive of the initial
investment made in acquiring Boomerang on or about the Closing Date and
the investment permitted in Section 8.9(i) above) not to exceed the
U.S. Dollar Equivalent of $10,000,000 at any one time outstanding; and
(k) other investments, loans, and advances in addition to
those otherwise permitted by this Section in an amount not to exceed
the U.S. Dollar Equivalent of $1,500,000 in the aggregate at any one
time outstanding.
In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid. For the purpose of subsection (j) above,
the aggregate amount of outstanding investments in Subsidiaries that are not
Guarantors shall be determined net of 30% of the amounts actually received by
the Parent or any Guarantor as a return of such investment and royalty payments
actually paid by LoJack Ireland/Bermuda to the Parent or a Guarantor as
contemplated by Section 8.10(f) hereof.
Section 8.10. Mergers, Consolidations and Sales. The Parent shall not,
nor shall it permit any Subsidiary to, be a party to any amalgamation, merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any part
of its Property, including any disposition of Property as part of a sale and
leaseback transaction, or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however, that this
Section shall not apply to nor operate to prevent:
(a) the sale or lease of inventory in the ordinary course of
business;
(b) the sale, transfer, lease or other disposition of
Property of (i) the Parent and the Guarantors to one another and (ii)
any Foreign Subsidiary to another Foreign Subsidiary in the ordinary
course of business;
(c) the merger or amalgamation of any Subsidiary with and
into the Parent or any other Subsidiary, provided that, (i) in the case
of any merger or amalgamation involving a Borrower, such Borrower is
the surviving corporation and (ii) in the case of any merger or
amalgamation involving the Parent, the Parent is the surviving
corporation;
(d) the sale of delinquent notes or accounts receivable in
the ordinary course of business for purposes of collection only (and
not for the purpose of any bulk sale or securitization transaction);
-44-
(e) the sale, transfer or other disposition of any tangible
personal property that, in the reasonable business judgment of the
Parent or its Subsidiary, has become obsolete or worn out, and which is
disposed of in the ordinary course of business;
(f) the assignment or license by the Parent and/or its
Domestic Subsidiaries of non-U.S. rights to the LoJack Stolen Vehicle
Recovery System and related intellectual property to a non-resident
Irish Subsidiary of the Parent ("LoJack Ireland/Bermuda") in
consideration of LoJack Ireland/Bermuda's agreement to make fair market
(in the good faith opinion of the Parent) royalty payments, and the
further sublicense of such intellectual property by LoJack
Ireland/Bermuda to an Irish Subsidiary thereof ("LoJack Ireland"), and
in connection therewith, the assignment of existing distribution
agreements with non-U.S. distributors (collectively, the "Vehicle
Recovery System Foreign Subsidiary Distribution Arrangement"); and
(g) the sale, transfer, lease or other disposition of
Property of the Parent or any Subsidiary (including any disposition of
Property as part of a sale and leaseback transaction) aggregating for
the Parent and its Subsidiaries not more than the U.S. Dollar
Equivalent of $1,500,000 during any fiscal year of the Parent.
Section 8.11. Dividends and Certain Other Restricted Payments. The
Parent shall not, nor shall it permit any Subsidiary to, (a) declare or pay any
dividends on or make any other distributions in respect of any class or series
of its capital stock or other equity interests (other than dividends payable in
the Parent's capital stock) or (b) directly or indirectly purchase, redeem, or
otherwise acquire or retire any of its capital stock or other equity interests
or any warrants, options, or similar instruments to acquire the same; provided,
however, that the foregoing shall not operate to prevent (i) the making of
dividends or distributions by any Subsidiary to the Parent or (ii) the exchange
of shares of Exchangeco for shares of the Parent pursuant to the terms of the
Combination Agreement.
Section 8.12. ERISA. The Parent shall, and shall cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed could reasonably be expected
to result in the imposition of a Lien against any of its Property. The Parent
shall, and shall cause each Subsidiary to, promptly notify the Administrative
Agent and each Lender of: (a) the occurrence of any reportable event (as defined
in ERISA) with respect to a Plan, (b) receipt of any notice from the PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor,
(c) its intention to terminate or withdraw from any Plan, and (d) the occurrence
of any event with respect to any Plan which would result in the incurrence by
the Parent or any Subsidiary of any material liability, fine or penalty, or any
material increase in the contingent liability of the Parent or any Subsidiary
with respect to any post-retirement Welfare Plan benefit.
Section 8.13. Compliance with Laws. The Parent shall, and shall cause
each Subsidiary to, comply in all respects with the requirements of all federal,
state, provincial, and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its
Property.
-45-
Section 8.14. Burdensome Contracts With Affiliates. Except for the
transaction permitted under Section 8.10(f), the Parent shall not, nor shall it
permit any Subsidiary to, enter into any contract, agreement or business
arrangement with any of its Affiliates on terms and conditions which are
materially less favorable to the Parent or such Subsidiary than would be usual
and customary in similar contracts, agreements or business arrangements between
Persons not affiliated with each other.
Section 8.15. No Changes in Fiscal Year. The fiscal year of the Parent
ends on December 31st of each year; and the Parent shall not change its fiscal
year from its present basis without the prior written consent of the Required
Lenders.
Section 8.16. Formation of Subsidiaries. Promptly upon the formation or
acquisition of any Subsidiary, the Parent shall provide the Administrative Agent
and the Lenders notice thereof (at which time Schedule 6.2 shall be deemed
amended to include reference to such Subsidiary) and timely comply with the
requirements of Section 4 hereof to the extent applicable.
Section 8.17. Change in the Nature of Business. The Parent shall not,
nor shall it permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of the Parent and its Subsidiaries,
taken as a whole, would be changed in any material respect from the general
nature of the business engaged in by it as of the Closing Date.
Section 8.18. Use of Proceeds. The Parent and the Borrowing Subsidiary
shall use the credit extended under this Agreement solely for the purposes set
forth in, or otherwise permitted by, Section 6.4 hereof.
Section 8.19. No Restrictions. Except as provided herein, the Parent
shall not, nor shall it permit any Subsidiary to, directly or indirectly create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Parent or any
Subsidiary to: (a) pay dividends or make any other distribution on any
Subsidiary's capital stock or other equity interests owned by the Parent or any
other Subsidiary, (b) pay any indebtedness owed to the Parent or any other
Subsidiary, (c) make loans or advances to the Parent or any other Subsidiary,
(d) transfer any of its Property to the Parent or any other Subsidiary or (e)
guarantee the Obligations as required by the Loan Documents.
Section 8.20. Combination Agreement. Neither the Parent nor the
Borrowing Subsidiary shall permit the Combination Agreement, or any of the other
instruments or documents to be executed and delivered pursuant to the terms
thereof, to be amended or modified in any material respect, or permit any
material condition set forth therein to be waived, without the written consent
of the Required Lenders; and the Parent and the Borrowing Subsidiary shall
promptly furnish to the Administrative Agent and the Lenders true and correct
copies of each proposed amendment or modification or waiver thereto.
Section 8.21. Insolvency Applications. The Borrowing Subsidiary, for
itself and each of its Subsidiaries (if any), acknowledges that their business
and financial relationships with the Lenders are unique, and that the Lenders do
not have a common interest with any other of their creditors. The Borrowing
Subsidiary, for itself and each of its Subsidiaries (if any), agrees that if
-46-
any of them files any plan of arrangement under the Companies' Creditors
Arrangement Act or makes any proposal under the Bankruptcy and Insolvency Act,
the Lenders will be placed in their own class for voting and distribution
purposes, and that none of them will permit, directly or indirectly, the Lenders
to be classified with any other creditor for any purpose of such plan or
proposal or otherwise.
Section 8.22. Financial Covenants. (a) Leverage Ratio. As of the last
day of each fiscal quarter of the Parent, the Parent shall not permit the
Leverage Ratio as of such date to be greater than the following:
LEVERAGE RATIO SHALL
FROM AND INCLUDING TO AND INCLUDING NOT BE GREATER THAN:
the date hereof 12/31/06 2.75 to 1
01/01/07 12/31/07 2.25 to 1
01/01/08 and at all times thereafter 2.00 to 1
(b) Net Worth. The Parent shall, at all times, maintain Net Worth of
not less than the sum of (a) $29,188,000, plus (b) 50% of Net Income for each
fiscal quarter of the Parent ending after the date hereof (commencing with the
fiscal quarter ending December 31, 2004) for which such Net Income is a positive
amount (i.e., there shall be no reduction to the amount of Net Worth required to
be maintained hereunder for any fiscal year in which Net Income is less than
zero).
(c) Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter of the Parent, the Parent shall maintain a ratio of (a) EBITDA for the
four fiscal quarters of the Parent then ended to (b) Fixed Charges for the same
four fiscal quarters then ended of not less than 1.25 to 1.0.
(d) Capital Expenditures. The Parent shall not, nor shall it permit any
of its Subsidiaries to, incur Capital Expenditures in an amount in excess of the
U.S. Dollar Equivalent of $7,500,000 in the aggregate during any fiscal year.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
Section 9.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default in the payment when due of all or any part of the
principal of or interest on any Note (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any
Reimbursement Obligation or default for a period of 5 Business Days in
the payment when due of any interest, fee, or other Obligation payable
hereunder or under any other Loan Document;
-47-
(b) (i) default in the observance or performance of any
covenant set forth in Sections 8.1, 8.5(g), 8.5(h), 8.5(i), 8.7, 8.8,
8.9, 8.10, 8.11, or 8.22 hereof; or (ii) default in the observance or
performance of any covenant set forth in Section 8.5 (other than those
covered by Section 9.1(b)(i) above) which is not remedied within 5
Business Days after the earlier of the date on which such failure shall
first become known to any officer of the Parent or written notice
thereof is given to the Parent by the Administrative Agent;
(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within 30 days after the earlier of (i) the date on which such failure
shall first become known to any officer of the Parent or (ii) written
notice thereof is given to the Parent by the Administrative Agent;
(d) any representation or warranty made herein or in any
other Loan Document or in any certificate furnished to the
Administrative Agent or the Lenders pursuant hereto or thereto or in
connection with any transaction contemplated hereby or thereby proves
untrue in any material respect as of the date of the issuance or making
or deemed making thereof;
(e) any event occurs or condition exists (other than those
described in subsections (a) through (d) above) which is specified as
an event of default under any of the other Loan Documents, or any of
the Loan Documents shall for any reason not be or shall cease to be in
full force and effect or is declared to be null and void, or the
Parent, the Borrowing Subsidiary, or any of their Subsidiaries takes
any action for the purpose of repudiating or rescinding any Loan
Document executed by it or any of its obligations thereunder;
(f) default shall occur under any Indebtedness for Borrowed
Money issued, assumed or guaranteed by the Parent, the Borrowing
Subsidiary, or any of their Subsidiaries aggregating in excess of the
U.S. Dollar Equivalent of $1,500,000, or under any indenture, agreement
or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed
Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due
(whether by demand, lapse of time, acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, shall be
entered or filed against the Parent, the Borrowing Subsidiary, or any
of their Subsidiaries, or against any of their Property, in an
aggregate amount in excess of the U.S. Dollar Equivalent of $1,500,000
(except to the extent fully covered by insurance pursuant to which the
insurer has accepted liability therefor in writing), and which remains
undischarged, unvacated, unbonded or unstayed for a period of 30 days;
(h) the Parent, the Borrowing Subsidiary, or any of their
Subsidiaries, or any member of its Controlled Group, shall fail to pay
when due an amount or amounts aggregating in excess of the U.S. Dollar
Equivalent of $1,500,000 which it shall have
-48-
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of the U.S. Dollar Equivalent of
$1,500,000 (collectively, a "Material Plan") shall be filed under Title
IV of ERISA by the Parent, the Borrowing Subsidiary, or any of their
Subsidiaries, or any other member of its Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause
a trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material Plan
against the Parent, the Borrowing Subsidiary, or any of their
Subsidiaries, or any member of its Controlled Group, to enforce Section
515 or 4219(c)(5) of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated;
(i) any Change of Control shall occur;
(j) the Parent, the Borrowing Subsidiary, or any of their
Subsidiaries shall (i) have entered involuntarily against it an order
for relief under the United States Bankruptcy Code, the Bankruptcy and
Insolvency Act (Canada), the Companies' Creditors Arrangement Act
(Canada), or any other legislation respect of bankruptcy, insolvency,
or the relief of debtors (all as amended), (ii) not pay, or admit in
writing its inability to pay, its debts generally as they become due,
(iii) make an assignment for the benefit of creditors, (iv) apply for,
seek, consent to or acquiesce in, the appointment of a receiver,
interim receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its Property, (v) institute
any proceeding (including, without limitation, any assignment,
proposal, or notice of intention to make a proposal) seeking relief
under the United States Bankruptcy Code, the Bankruptcy and Insolvency
Act (Canada), the Companies' Creditors Arrangement Act (Canada), or any
other legislation respect of bankruptcy, insolvency, or the relief of
debtors (all as amended), to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying (or shall admit) the
material allegations of any such proceeding filed against it, (vi) take
any action in furtherance of any matter described in parts (i) through
(v) above, or (vii) fail to contest in good faith any appointment or
proceeding described in Section 9.1(k) hereof; or
(k) a custodian, monitor, receiver, receiver and manager,
interim receiver, trustee, examiner, liquidator or similar official (a
"Receiver") shall be appointed for the Parent, the Borrowing
Subsidiary, or any of their Subsidiaries, or any substantial part of
any of their Property, or a proceeding described in Section 9.1(j)(v)
shall be instituted against the Parent, the Borrowing Subsidiary, or
any of their Subsidiaries, and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 60
days or if, within such period, a Receiver or creditor shall take
possession of any Property of the Parent, the Borrowing Subsidiary, or
any of their Subsidiaries.
-49-
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsection (j) or (k) of Section 9.1 hereof has occurred
and is continuing, the Administrative Agent shall, by written notice to the
Parent: (a) if so directed by the Required Lenders, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which may be the date thereof); (b) if so directed by the
Required Lenders, declare the principal of and the accrued interest on all
outstanding Notes to be forthwith due and payable and thereupon all outstanding
Notes, including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable under the
Loan Documents without further demand, presentment, protest or notice of any
kind; and (c) if so directed by the Required Lenders, demand that the Parent
immediately pay to the Administrative Agent the full amount then available for
drawing under each or any Letter of Credit, and the Parent agrees to immediately
make such payment and acknowledges and agrees that the Lenders would not have an
adequate remedy at law for failure by the Parent to honor any such demand and
that the Administrative Agent, for the benefit of the Lenders, shall have the
right to require the Parent to specifically perform such undertaking whether or
not any drawings or other demands for payment have been made under any Letter of
Credit. The Administrative Agent, after giving notice to the Parent pursuant to
Section 9.1(c) or this Section 9.2, shall also promptly send a copy of such
notice to the other Lenders, but the failure to do so shall not impair or annul
the effect of such notice.
Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Parent shall immediately pay to the Administrative Agent the full amount
then available for drawing under all outstanding Letters of Credit, the Parent
acknowledging and agreeing that the Lenders would not have an adequate remedy at
law for failure by the Parent to honor any such demand and that the Lenders, and
the Administrative Agent on their behalf, shall have the right to require the
Parent to specifically perform such undertaking whether or not any draws or
other demands for payment have been made under any of the Letters of Credit.
Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 9.2 or 9.3 above, the Parent shall
forthwith pay the amount required to be so prepaid, to be held by the
Administrative Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be held
by the Administrative Agent in one or more separate collateral accounts (each
such account, and the credit balances, properties, and any investments from time
to time held therein, and any substitutions for such account, any certificate of
deposit or other instrument evidencing any of the foregoing and all proceeds of
and earnings on any of the foregoing being collectively called the "Collateral
Account") as security for, and for application by the Administrative Agent (to
the extent available) to, the reimbursement of any payment under any Letter of
Credit then or thereafter made by the Administrative Agent, and to the payment
of the unpaid balance of all other Obligations (and to all Hedging Liability and
Funds Transfer and Deposit Account
-50-
Liability). The Collateral Account shall be held in the name of and subject to
the exclusive dominion and control of the Administrative Agent for the benefit
of the Administrative Agent, the Lenders, and the L/C Issuer. If and when
requested by the Parent, the Administrative Agent shall invest funds held in the
Collateral Account from time to time in direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by, the
United States of America with a remaining maturity of one year or less, provided
that the Administrative Agent is irrevocably authorized to sell investments held
in the Collateral Account when and as required to make payments out of the
Collateral Account for application to amounts due and owing from the Parent to
the L/C Issuer, the Administrative Agent or the Lenders; provided, however, that
if the Parent shall have made payment of all obligations referred to in
subsection (a) above required under Section 9.2 or 9.3 hereof, so long as no
Letters of Credit, Commitments, Loans or other Obligations, Hedging Liability,
or Funds Transfer and Deposit Account Liability remain outstanding, at the
request of the Parent the Administrative Agent shall release to the Parent any
remaining amounts held in the Collateral Account.
Section 9.5. Notice of Default. The Administrative Agent shall give
notice to the Parent under Section 9.1(c) hereof promptly upon being requested
to do so by any Lender and shall thereupon notify all the Lenders thereof.
Section 9.6. Expenses. The Parent agrees (and, in the case of matters
relating to the Term B Loans, the Borrowing Subsidiary also agrees) to pay to
the Administrative Agent and each Lender, and any other holder of any Note
outstanding hereunder, all costs and expenses reasonably incurred or paid by the
Administrative Agent and such Lender or any such holder, including reasonable
legal fees and expenses (on a solicitor and client basis in Canada) and court
costs, in connection with any Default or Event of Default hereunder or in
connection with the enforcement of any of the Loan Documents (including all such
costs and expenses incurred in connection with any proceeding under the United
States Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada), or any other legislation in
respect of bankruptcy, insolvency, or relief of debtors involving the Parent,
the Borrowing Subsidiary, or any of their Subsidiaries as a debtor thereunder).
SECTION 10. CHANGE IN CIRCUMSTANCES.
Section 10.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any Lender to
make or continue to maintain any Eurocurrency Loans or to perform its
obligations as contemplated hereby, such Lender shall promptly give notice
thereof to the Parent and such Lender's obligations to make or maintain
Eurocurrency Loans under this Agreement shall be suspended until it is no longer
unlawful for such Lender to make or maintain Eurocurrency Loans. The Parent
(and, in the case of the Term B Loans, the Borrowing Subsidiary) shall prepay on
demand the outstanding principal amount of any such affected Eurocurrency Loans,
together with all interest accrued thereon and all other amounts then due and
payable to such Lender under this Agreement; provided, however, subject to all
of the terms and conditions of this Agreement, the Parent or the Borrowing
Subsidiary, as applicable, may then elect to borrow the principal amount of the
affected Eurocurrency Loans from such Lender by means of U.S. Base Rate Loans
(in the case of Loans made in U.S. Dollars) or Canadian Base
-51-
Rate Loans (in the case of Loans made in Canadian Dollars) from such Lender,
which U.S. Base Rate Loans and Canadian Base Rate Loans shall not be made
ratably by the Lenders but only from such affected Lender.
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurocurrency Loans:
(a) the Administrative Agent determines that deposits in U.S.
Dollars or Canadian Dollars (in the applicable amounts) are not being
offered to it in the interbank eurocurrency market for such Interest
Period, or that by reason of circumstances affecting the interbank
eurocurrency market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR, or
(b) the Required Lenders advise the Administrative Agent that
(i) LIBOR as determined by the Administrative Agent will not adequately
and fairly reflect the cost to such Lenders of funding their
Eurocurrency Loans for such Interest Period or (ii) that the making or
funding of Eurocurrency Loans become impracticable,
then the Administrative Agent shall forthwith give notice thereof to the Parent
and the Lenders, whereupon until the Administrative Agent notifies the Parent
that the circumstances giving rise to such suspension no longer exist, the
obligations of the Lenders to make Eurocurrency Loans shall be suspended.
Section 10.3. Increased Cost and Reduced Return. (a) If, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, in each case becoming effective
after the date hereof:
(i) shall subject any Lender (or its Lending Office) to any
tax, duty or other charge with respect to its Eurocurrency Loans, its
Notes, its Letter(s) of Credit, or its participation in any thereof,
any Reimbursement Obligations owed to it or its obligation to make
Eurocurrency Loans, issue a Letter of Credit, or to participate
therein, or shall change the basis of taxation of payments to any
Lender (or its Lending Office) of the principal of or interest on its
Eurocurrency Loans, Letter(s) of Credit, or participations therein or
any other amounts due under this Agreement or any other Loan Document
in respect of its Eurocurrency Loans, Letter(s) of Credit, any
participation therein, any Reimbursement Obligations owed to it, or its
obligation to make Eurocurrency Loans, or issue a Letter of Credit, or
acquire participations therein (except for changes in the rate of tax
on the overall net income of such Lender or its Lending Office imposed
by the jurisdiction in which such Lender's principal executive office
or Lending Office is located); or
-52-
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Eurocurrency Loans
any such requirement included in an applicable Eurocurrency Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Lender (or its Lending Office) or shall impose
on any Lender (or its Lending Office) or on the interbank market any
other condition affecting its Eurocurrency Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligation owed to it, or its obligation to make
Eurocurrency Loans, or to issue a Letter of Credit, or to participate
therein;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Eurocurrency Loan, issuing
or maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Parent
(and, in the case any such matter relates to the Term B Loans, the Borrowing
Subsidiary) shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or reduction.
(b) If, any Lender or the Administrative Agent shall have determined
that the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Lending Office) or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, in
each case becoming effective after the date hereof, has had the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within 15 days after demand by such Lender
(with a copy to the Administrative Agent), the Parent (and, in the case any such
matter relates to the Term B Loans, the Borrowing Subsidiary) shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) A certificate of a Lender claiming compensation under this Section
10.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive if reasonably determined. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
Section 10.4. Lending Offices. Each Lender may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice
-53-
to the Parent and the Administrative Agent. To the extent reasonably possible, a
Lender shall designate an alternative branch or funding office with respect to
its Eurocurrency Loans to reduce any liability of the Parent (and, in the case
any such matter relates to the Term B Loans, the Borrowing Subsidiary) to such
Lender under Section 10.3 hereof or to avoid the unavailability of Eurocurrency
Loans under Section 10.2 hereof, so long as such designation is not otherwise
disadvantageous to the Lender.
Section 10.5. Discretion of Lender as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder with respect to Eurocurrency Loans shall
be made as if each Lender had actually funded and maintained each Eurocurrency
Loan through the purchase of deposits in the interbank eurocurrency market
having a maturity corresponding to such Loan's Interest Period, and bearing an
interest rate equal to LIBOR for such Interest Period.
SECTION 11. THE ADMINISTRATIVE AGENT.
Section 11.1. Appointment and Authorization of Administrative Agent.
Each Lender hereby appoints Xxxxxx Trust and Savings Bank as the Administrative
Agent under the Loan Documents and hereby authorizes the Administrative Agent to
take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. The Lenders expressly agree that the Administrative Agent is not acting
as a fiduciary of the Lenders in respect of the Loan Documents, the Parent or
the Borrowing Subsidiary or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Administrative
Agent or any of the Lenders except as expressly set forth herein.
Section 11.2. Administrative Agent and its Affiliates. The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Parent, the
Borrowing Subsidiary, or any of their Affiliates as if it were not the
Administrative Agent under the Loan Documents. The term "Lender" as used herein
and in all other Loan Documents, unless the context otherwise clearly requires,
includes the Administrative Agent in its individual capacity as a Lender.
References in Section 1 hereof to the Administrative Agent's Loans, or to the
amount owing to the Administrative Agent for which an interest rate is being
determined, refer to the Administrative Agent in its individual capacity as a
Lender.
Section 11.3. Action by Administrative Agent. If the Administrative
Agent receives from the Parent a written notice of an Event of Default pursuant
to Section 8.5 hereof, the Administrative Agent shall promptly give each of the
Lenders written notice thereof. The obligations of the Administrative Agent
under the Loan Documents are only those expressly set forth therein. Without
limiting the generality of the foregoing, the Administrative Agent shall
-54-
not be required to take any action hereunder with respect to any Default or
Event of Default, except as expressly provided in Sections 9.2 and 9.5. Unless
and until the Required Lenders give such direction, the Administrative Agent may
(but shall not be obligated to) take or refrain from taking such actions as it
deems appropriate and in the best interest of all the Lenders. In no event,
however, shall the Administrative Agent be required to take any action in
violation of applicable law or of any provision of any Loan Document, and the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder or under any other Loan Document unless it first
receives any further assurances of its indemnification from the Lenders that it
may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall be entitled to assume that no Default or Event of
Default exists unless notified in writing to the contrary by a Lender or the
Parent. In all cases in which the Loan Documents do not require the
Administrative Agent to take specific action, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action thereunder. Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Loan Documents,
shall be binding upon all the Lenders and the holders of the Obligations.
Section 11.4. Consultation with Experts. The Administrative Agent may
consult with legal counsel, independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 11.5. Liability of Administrative Agent; Credit Decision.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with the Loan Documents: (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify: (i) any statement, warranty or representation made in
connection with this Agreement, any other Loan Document or any Credit Event;
(ii) the performance or observance of any of the covenants or agreements of the
Parent, the Borrowing Subsidiary, or any of their Subsidiaries contained herein
or in any other Loan Document; (iii) the satisfaction of any condition specified
in Section 7 hereof, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness, genuineness,
enforceability, perfection, value, worth or collectibility hereof or of any
other Loan Document or of any other documents or writing furnished in connection
with any Loan Document; and the Administrative Agent makes no representation of
any kind or character with respect to any such matter mentioned in this
sentence. The Administrative Agent may execute any of its duties under any of
the Loan Documents by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Lenders, the Parent, the Borrowing Subsidiary, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Administrative Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties. In particular and
without limiting any of the foregoing, the Administrative Agent shall have no
responsibility for confirming the accuracy of any compliance certificate or
other
-55-
document or instrument received by it under the Loan Documents. The
Administrative Agent may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with the Administrative Agent
signed by such payee in form satisfactory to the Administrative Agent. Each
Lender acknowledges that it has independently and without reliance on the
Administrative Agent or any other Lender, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Parent and the Borrowing
Subsidiary in the manner set forth in the Loan Documents. It shall be the
responsibility of each Lender to keep itself informed as to the creditworthiness
of the Parent, the Borrowing Subsidiary, and their Subsidiaries, and the
Administrative Agent shall have no liability to any Lender with respect thereto.
Section 11.6. Indemnity. The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Parent or the Borrowing Subsidiary and
except to the extent that any event giving rise to a claim was caused by the
gross negligence or willful misconduct of the party seeking to be indemnified.
The obligations of the Lenders under this Section shall survive termination of
this Agreement. The Administrative Agent shall be entitled to offset amounts
received for the account of a Lender under this Agreement against unpaid amounts
due from such Lender to the Administrative Agent hereunder (whether as fundings
of participations, indemnities or otherwise), but shall not be entitled to
offset against amounts owed to the Administrative Agent by any Lender arising
outside of this Agreement and the other Loan Documents.
Section 11.7. Resignation of Administrative Agent and Successor
Administrative Agent. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Parent. Upon any such resignation
of the Administrative Agent, the Required Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which may be
any Lender hereunder or any commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $200,000,000. Upon the acceptance of its appointment as
the Administrative Agent hereunder, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent under the Loan Documents, and the retiring
Administrative Agent shall be discharged from its duties and obligations
thereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 11 and all protective
provisions of the other Loan Documents shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent,
but no successor Administrative Agent shall in any event be liable or
responsible for any actions of its predecessor. If the Administrative Agent
resigns and no successor is appointed, the rights and obligations of such
Administrative Agent shall be automatically assumed by the Required Lenders and
the Parent
-56-
and the Borrowing Subsidiary shall be directed to make all payments due each
Lender hereunder directly to such Lender.
Section 11.8. Canadian Co-Agent and L/C Issuer. The Canadian Co-Agent
shall act on behalf of the Administrative Agent and the Lenders with respect to
the Term B Loans as provided in this Agreement and the L/C Issuer shall act on
behalf of the Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith. The Canadian Co-Agent and L/C Issuer shall have
all of the benefits and immunities (i) provided to the Administrative Agent in
this Section 11 with respect to any acts taken or omissions suffered by the
Canadian Co-Agent in connection with the Term B Loans and the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the Applications pertaining to such Letters of Credit as fully as if the
term "Administrative Agent", as used in this Section 11, included the Canadian
Co-Agent and L/C Issuer with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to such Canadian Co-Agent
and L/C Issuer.
Section 11.9. Hedging Liability and Funds Transfer and Deposit Account
Liability Arrangements. By virtue of a Lender's execution of this Agreement or
an assignment agreement pursuant to Section 13.12 hereof, as the case may be,
any Affiliate of such Lender with whom the Parent, the Borrowing Subsidiary, or
any Guarantor has entered into an agreement creating Hedging Liability or Funds
Transfer and Deposit Account Liability shall be deemed a Lender party hereto for
purposes of any reference in a Loan Document to the parties for whom the
Administrative Agent is acting, it being understood and agreed that the rights
and benefits of such Affiliate under the Loan Documents consist exclusively of
such Affiliate's right to share in payments and collections out of the
Guaranties as more fully set forth in Section 3.1 hereof. In connection with any
such distribution of payments and collections, the Administrative Agent shall be
entitled to assume no amounts are due to any Lender or its Affiliate with
respect to Hedging Liability or Funds Transfer and Deposit Account Liability
unless such Lender has notified the Administrative Agent in writing of the
amount of any such liability owed to it or its Affiliate prior to such
distribution.
Section 11.10. Designation of Additional Agents. The Administrative Agent
shall have the continuing right, for purposes hereof, at any time and from time
to time to designate one or more of the Lenders (and/or its or their Affiliates)
as "syndication agents," "documentation agents," "arrangers," or other
designations for purposes hereto, but such designation shall have no substantive
effect, and such Lenders and their Affiliates shall have no additional powers,
duties or responsibilities as a result thereof.
SECTION 12. THE GUARANTEES.
Section 12.1. The Guarantees. To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
the Borrowers by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, (a) the Parent and each
Domestic Subsidiary party hereto (including any Domestic Subsidiary formed or
acquired after the Closing Date executing an Additional Guarantor Supplement in
the form attached hereto as Exhibit G or such other form acceptable to
-57-
the Administrative Agent) hereby unconditionally and irrevocably guarantees
jointly and severally to the Administrative Agent, the Lenders, and their
Affiliates, the due and punctual payment of all present and future Obligations,
Hedging Liability, and Funds Transfer and Deposit Account Liability, including,
but not limited to, the due and punctual payment of principal of and interest on
the Notes, the Reimbursement Obligations, and the due and punctual payment of
all other Obligations now or hereafter owed by the Borrowers under the Loan
Documents and the due and punctual payment of all Hedging Liability and Funds
Transfer and Deposit Account Liability, in each case as and when the same shall
become due and payable, whether at stated maturity, by acceleration, or
otherwise, according to the terms hereof and thereof (including interest which,
but for the filing of a petition in bankruptcy, would otherwise accrue on any
such indebtedness, obligation, or liability) and (b) the Parent and each
Domestic Subsidiary and Foreign Subsidiary party hereto (including any
Subsidiary formed or acquired after the Closing Date executing an Additional
Guarantor Supplement in the form attached hereto as Exhibit G or such other form
acceptable to the Administrative Agent) hereby unconditionally and irrevocably
guarantees jointly and severally to the Administrative Agent, the Lenders, and
their Affiliates, the due and punctual payment of all present and future
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability
of the Borrowing Subsidiary, including, but not limited to, the due and punctual
payment of principal of and interest on the Term Notes, and the due and punctual
payment of all other Obligations now or hereafter owed by the Borrowing
Subsidiary under the Loan Documents and the due and punctual payment of all
Hedging Liability and Funds Transfer and Deposit Account Liability of the
Borrowing Subsidiary, in each case as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, according to
the terms hereof and thereof (including interest which, but for the filing of a
petition in bankruptcy, would otherwise accrue on any such indebtedness,
obligation, or liability). In case of failure by the Parent or other obligor
punctually to pay any Obligations, Hedging Liability, or Funds Transfer and
Deposit Account Liability guaranteed hereby, each Guarantor hereby
unconditionally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, and as if such payment were made by the
Parent or such obligor. In case of failure by the Borrowing Subsidiary
punctually to pay any Obligations, Hedging Liability, or Funds Transfer and
Deposit Account Liability guaranteed hereby, each Guarantor hereby
unconditionally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, and as if such payment were made by the
Borrowing Subsidiary. As used herein, the term "Guarantor" means each such
person in its capacity as a guarantor of the obligations of another and not, in
the case of any Borrower, as the primary obligor of its own obligations.
Section 12.2. Guarantee Unconditional. The obligations of each Guarantor
under this Section 12 shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged, or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver,
or release in respect of any obligation of the relevant Borrower or
other obligor or of any other guarantor under this Agreement or any
other Loan Document or by operation of law or otherwise;
-58-
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document or any agreement relating to
Hedging Liability or Funds Transfer and Deposit Account Liability;
(c) any change in the corporate existence, structure, or
ownership of, or any insolvency, bankruptcy, reorganization, or other
similar proceeding affecting, the relevant Borrower or other obligor,
any other guarantor, or any of their respective assets, or any
resulting release or discharge of any obligation of the relevant
Borrower or other obligor or of any other guarantor contained in any
Loan Document;
(d) the existence of any claim, set-off, or other rights
which the relevant Borrower or other obligor or any other guarantor may
have at any time against the Administrative Agent, any Lender, or any
other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against the relevant Borrower or other obligor, any other
guarantor, or any other Person or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of the relevant Borrower or other
obligor, regardless of what obligations of the relevant Borrower or
other obligor remain unpaid;
(g) any invalidity or unenforceability relating to or against
the relevant Borrower or other obligor or any other guarantor for any
reason of this Agreement or of any other Loan Document or any agreement
relating to Hedging Liability or Funds Transfer and Deposit Account
Liability or any provision of applicable law or regulation purporting
to prohibit the payment by the relevant Borrower or other obligor or
any other guarantor of the principal of or interest on any Note or any
Reimbursement Obligation or any other amount payable under the Loan
Documents or any agreement relating to Hedging Liability or Funds
Transfer and Deposit Account Liability; or
(h) any other act or omission to act or delay of any kind by
the Administrative Agent, any Lender, or any other Person or any other
circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations
of any Guarantor under this Section 12.
Section 12.3. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 12 shall
remain in full force and effect until the Commitments are terminated, all
Letters of Credit have expired, and the principal of and interest on the Notes
and all other amounts payable by the relevant Borrower and the Guarantors under
this Agreement and all other Loan Documents and, if then outstanding and unpaid,
all Hedging Liability and Funds Transfer and Deposit Account Liability shall
have been paid in full. If at any time any payment of the principal of or
interest on any Note or any Reimbursement Obligation or any other amount payable
by the relevant Borrower or other obligor or any Guarantor under the Loan
Documents or any agreement relating to Hedging
-59-
Liability or Funds Transfer and Deposit Account Liability is rescinded or must
be otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of the relevant Borrower or other obligor or of any guarantor, or
otherwise, each Guarantor's obligations under this Section 12 with respect to
such payment shall be reinstated at such time as though such payment had become
due but had not been made at such time.
Section 12.4. Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall have been paid in full subsequent
to the termination of all the Commitments and expiration of all Letters of
Credit. If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time prior to the later of (x) the payment in full of
the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability and all other amounts payable by the Borrowers hereunder and the other
Loan Documents and (y) the termination of the Commitments and expiration of all
Letters of Credit, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders (and their Affiliates) and shall forthwith
be paid to the Administrative Agent for the benefit of the Lenders (and their
Affiliates) or be credited and applied upon the Obligations, Hedging Liability,
and Funds Transfer and Deposit Account Liability, whether matured or unmatured,
in accordance with the terms of this Agreement.
Section 12.5. Waivers. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender, or any other Person against any Borrower or
other obligor, another guarantor, or any other Person.
Section 12.6. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 12 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor's
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.
Section 12.7. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the relevant Borrower or other obligor under
this Agreement or any other Loan Document, or under any agreement relating to
Hedging Liability or Funds Transfer and Deposit Account Liability, is stayed
upon the insolvency, bankruptcy or reorganization of the relevant Borrower or
such obligor, all such amounts otherwise subject to acceleration under the terms
of this Agreement or the other Loan Documents, or under any agreement relating
to Hedging Liability or Funds Transfer and Deposit Account Liability, shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Administrative Agent made at the request of the Required Lenders.
Section 12.8. Benefit to Guarantors. The Borrowers and the Guarantors
are engaged in related businesses and integrated to such an extent that the
financial strength and flexibility of the Borrowers has a direct impact on the
success of each Guarantor. Each Guarantor will derive substantial direct and
indirect benefit from the extensions of credit hereunder.
-60-
Section 12.9. Guarantor Covenants. Each Guarantor shall take such action
as the relevant Borrower is required by this Agreement to cause such Guarantor
to take, and shall refrain from taking such action as the relevant Borrower is
required by this Agreement to prohibit such Guarantor from taking.
SECTION 13. MISCELLANEOUS.
Section 13.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 13.1(b) hereof, each
payment by the relevant Borrower and the Guarantors under this Agreement or the
other Loan Documents shall be made without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient)
imposed by or within the jurisdiction in which the relevant Borrower or such
Guarantor is domiciled, any jurisdiction from which the relevant Borrower or
such Guarantor makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required, the
relevant Borrower or such Guarantor shall make the withholding, pay the amount
withheld to the appropriate governmental authority before penalties attach
thereto or interest accrues thereon, and forthwith pay such additional amount as
may be necessary to ensure that the net amount actually received by each Lender,
the Administrative Agent, and the Canadian Co-Agent free and clear of such taxes
(including such taxes on such additional amount) is equal to the amount which
that Lender, the Administrative Agent or the Canadian Co-Agent (as the case may
be) would have received had such withholding not been made; provided, that
neither the Borrowing Subsidiary, the Parent nor any Guarantor shall be required
to pay any additional amount in respect of withholding taxes to the Canadian
Co-Agent, any Canadian Lender or any holder of a Term Note if such withholding
taxes arise as a result of the failure of the Canadian Co-Agent, such Canadian
Lender or such holder to be a Person resident in Canada for purposes of the
Income Tax Act (Canada). If the Administrative Agent or the Canadian Co-Agent or
any Lender pays any amount in respect of any such taxes, penalties or interest,
the relevant Borrower or such Guarantor shall reimburse the Administrative
Agent, the Canadian Co-Agent, or such Lender for that payment on demand in the
currency in which such payment was made, subject to the proviso in the preceding
sentence. If the relevant Borrower or such Guarantor pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Lender, the Administrative Agent or
the Canadian Co-Agent on whose account such withholding was made (with a copy to
the Administrative Agent if not the recipient of the original) on or before the
thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrowers and the Administrative Agent on or before the date the
initial Credit Event is made hereunder or, if later, the date such financial
institution becomes a Lender hereunder, two duly completed and signed copies of
(i) either Form W-8 BEN (relating to such Lender and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Obligations) or
Form W-8 ECI (relating to all amounts to be received by such Lender, including
fees, pursuant to the Loan Documents and the Obligations) of the United States
Internal Revenue Service or (ii) solely if such Lender is claiming exemption
from United States withholding tax under Section 871(h) or 881(c) of the
-61-
Code with respect to payments of "portfolio interest", a Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, and a certificate
representing that such Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrowers and is not a controlled foreign
corporation related to the Borrowers (within the meaning of Section 864(d)(4) of
the Code). Thereafter and from time to time, each Lender shall submit to the
Borrowers and the Administrative Agent such additional duly completed and signed
copies of one or the other of such Forms (or such successor forms as shall be
adopted from time to time by the relevant United States taxing authorities) and
such other certificates as may be (i) requested by the Borrowers in a written
notice, directly or through the Administrative Agent, to such Lender and (ii)
required under then-current United States law or regulations to avoid or reduce
United States withholding taxes on payments in respect of all amounts to be
received by such Lender, including fees, pursuant to the Loan Documents or the
Obligations. Upon the request of the Borrowers or the Administrative Agent, each
Lender that is a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrowers and the Administrative
Agent a certificate to the effect that it is such a United States person.
(c) Inability of Lender to Submit Forms. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrowers or the Administrative Agent any form or certificate that such Lender
is obligated to submit pursuant to subsection (b) of this Section 13.1 or that
such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrowers and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.
(d) Treatment of Certain Refunds. If the Administrative Agent, the
Canadian Co-Agent, a Lender, or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any taxes described in this Section
12.1 above as to which it has been indemnified by a Borrower or a Guarantor or
with respect to which a Borrower or a Guarantor has paid additional amounts
pursuant to this Section, it shall pay to such Borrower or such Guarantor an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by such Borrower or such Guarantor under this
Section with respect to the taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent, the Canadian Co-Agent, such
Lender, or the L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant governmental authority with respect to such
refund), provided that the relevant Borrower or Guarantor, upon the request of
the Administrative Agent, the Canadian Co-Agent, such Lender, or the L/C Issuer,
agrees to repay the amount paid over to such Borrower or such Guarantor (plus
any penalties, interest or other charges imposed by the relevant governmental
authority) to the Administrative Agent, the Canadian Co-Agent, such Lender, or
the L/C Issuer in the event the Administrative Agent, the Canadian Co-Agent,
such Lender, or the L/C Issuer is required to repay such refund to such
governmental authority. This paragraph shall not be construed to require the
Administrative Agent, the Canadian Co-Agent, and Lender, or the L/C Issuer to
make available its tax returns (or any other information relating to its taxes
that it deems confidential) to a Borrower or a Guarantor or any other Person.
-62-
Section 13.2. No Waiver, Cumulative Remedies. No delay or failure on the
part of the Administrative Agent or any Lender or on the part of the holder or
holders of any of the Obligations in the exercise of any power or right under
any Loan Document shall operate as a waiver thereof or as an acquiescence in any
default, nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The rights and remedies hereunder of the Administrative Agent, the
Lenders and of the holder or holders of any of the Obligations are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.
Section 13.3. Non-Business Days. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
Section 13.4. Documentary Taxes. The Parent agrees to pay on demand any
documentary, stamp or similar taxes payable in respect of this Agreement or any
other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.
Section 13.5. Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.
Section 13.6. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.12, 10.3, and 13.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.
Section 13.7. Sharing of Set-Off. Each Lender agrees with each other
Lender a party hereto that if such Lender shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise, on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such Obligations then outstanding to the Lenders, then such
Lender shall purchase (in the case of a purchase from an affiliate of such
Lender, to the extent permitted by applicable law) for cash at face value, but
without recourse, ratably from each of the other Lenders such amount of the
Loans or Reimbursement Obligations, or participations therein, held by each such
other Lenders (or interest therein) as shall be necessary to cause such Lender
to share such excess payment ratably with all the other Lenders; provided,
however, that if any such purchase is made by any Lender, and if such excess
payment or part thereof is thereafter recovered from such purchasing Lender, the
related purchases from the other Lenders shall be rescinded ratably and the
purchase price restored as to the portion of such excess payment so recovered,
-63-
but without interest. For purposes of this Section, amounts owed to or recovered
by the L/C Issuer in connection with Reimbursement Obligations in which Lenders
have been required to fund their participation shall be treated as amounts owed
to or recovered by the L/C Issuer as a Lender hereunder.
Section 13.8. Notices. Except as otherwise specified herein, all notices
hereunder and under the other Loan Documents shall be in writing (including,
without limitation, notice by telecopy) and shall be given to the relevant party
at its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the
Administrative Agent and the Borrowers given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrowers or any Guarantor to:
c/o LoJack Corporation
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, CFP
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.
Section 13.9. Counterparts. This Agreement may be executed in any number
of counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 13.10. Successors and Assigns. This Agreement shall be binding
upon the Borrowers and the Guarantors and their successors and assigns, and
shall inure to the benefit of the Administrative Agent and each of the Lenders
and the benefit of their respective successors and assigns, including any
subsequent holder of any of the Obligations. The Borrowers and the Guarantors
may not assign any of their rights or obligations under any Loan Document
without the written consent of all of the Lenders.
Section 13.11. Participants. Each Lender shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Lender at any time and from time to time to one
or more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
-64-
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant. Any agreement pursuant to which such
participation is granted shall provide that the granting Lender shall retain the
sole right and responsibility to enforce the obligations of the Borrowers under
this Agreement and the other Loan Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Loan Documents, except that such agreement may provide that such Lender will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation in
which such participant has an interest. Any party to which such a participation
has been granted shall have the benefits of Section 1.12 and Section 10.3
hereof. The Borrowers authorize each Lender to disclose to any participant or
prospective participant under this Section any financial or other information
pertaining to the Borrowers or any Subsidiary.
Section 13.12. Assignments. (a) Each Lender shall have the right at any
time, with the prior consent of the Administrative Agent (and the L/C Issuers,
if other than the Administrative Agent) and, so long as no Event of Default then
exists, the Parent (which consent of the Parent shall not be unreasonably
withheld) to sell, assign, transfer or negotiate all or any part of its rights
and obligations under the Loan Documents (including, without limitation, the
indebtedness evidenced by the Notes then held by such assigning Lender, together
with an equivalent percentage of its obligation to make Loans and participate in
Letters of Credit) to one or more commercial banks or other financial
institutions or investors, provided that, unless otherwise agreed to by the
Administrative Agent, such assignment shall be of a fixed percentage (and not by
its terms of varying percentage) of the assigning Lender's rights and
obligations under the Loan Documents and provided further that, in the case of
an assignment of the Term Loans or Term Notes, the assignee lender must be a
resident of Canada for the purpose of The Income Tax Act (Canada) or an
"authorized foreign bank" that represents to the Borrowing Subsidiary prior to
the assignment that all amounts paid or credited to or by the assignee lender
are in respect of its Canadian banking business; provided, however, that in
order to make any such assignment (i) unless the assigning Lender is assigning
all of its Commitments, outstanding Loans and interests in L/C Obligations, the
assigning Lender shall retain at least $5,000,000 in unused Commitments,
outstanding Loans and interests in Letters of Credit, (ii) the assignee Lender
shall have Commitments, outstanding Loans and interests in Letters of Credit of
at least $5,000,000, (iii) each such assignment shall be evidenced by a written
agreement (substantially in the form attached hereto as Exhibit G or in such
other form acceptable to the Administrative Agent) executed by such assigning
Lender, such assignee Lender or Lenders, the Administrative Agent (and the L/C
Issuers, if other than the Administrative Agent) and, if required as provided
above, the Parent, which agreement shall specify in each instance the portion of
the Obligations which are to be assigned to the assignee Lender and the portion
of the Commitments of the assigning Lender to be assumed by the assignee Lender,
(iv) the assigning Lender shall pay to the Administrative Agent a processing fee
of $3,500 and any out-of-pocket attorneys' fees and expenses incurred by the
Administrative Agent in connection with any such assignment agreement. Any such
assignee shall become a Lender for all purposes hereunder to the extent of the
rights and obligations under the Loan Documents it assumes and the assigning
Lender shall be released from its obligations, and will have released its
rights, under the Loan Documents to the extent of such assignment, and (v) so
long as no Event of Default then exists, any assignment
-65-
of the Obligations of the Borrowing Subsidiary shall be to another commercial
bank or financial institution or investor located in Canada, or to a Canadian
branch of any such Person. The address for notices to such assignee Lender shall
be as specified in the assignment agreement executed by it. Promptly upon the
effectiveness of any such assignment agreement, the relevant Borrower shall
execute and deliver replacement Notes to the assignee Lender and the assigning
Lender in the respective amounts of their Commitments (or assigned principal
amounts, as applicable) after giving effect to the reduction occasioned by such
assignment (all such Notes to constitute "Notes" for all purposes of the Loan
Documents), and the assignee Lender shall thereafter surrender to relevant
Borrower its old Notes. The Borrowers authorize each Lender to disclose to any
purchaser or prospective purchaser of an interest in the Loans and interest in
Letters of Credit owed to it or its Commitments under this Section any financial
or other information pertaining to the Parent or any Subsidiary.
(b) Any Lender may at any time pledge or grant a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or grant to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or grant of a security interest;
provided that no such pledge or grant of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
secured party for such Lender as a party hereto; provided further, however, the
right of any such pledgee or grantee (other than any Federal Reserve Bank) to
further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.
Section 13.13. Amendments. Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrowers, (b) the Required
Lenders, and (c) if the rights or duties of the Administrative Agent, the
Canadian Co-Agent, or the L/C Issuer are affected thereby, the Administrative
Agent, the Canadian Co-Agent, or such L/C Issuer, as applicable; provided that:
(i) no amendment or waiver pursuant to this Section 13.13
shall (A) increase any Commitment of any Lender without the consent of
such Lender or (B) reduce the amount of or postpone the date for any
scheduled payment of any principal of or interest on any Loan or of any
Reimbursement Obligation or of any fee payable hereunder without the
consent of the Lender to which such payment is owing or which has
committed to make such Loan or Letter of Credit (or participate
therein) hereunder;
(ii) no amendment or waiver pursuant to this Section 13.13
shall, unless signed by each Lender, change the definitions of
Revolving Credit Termination Date or Required Lenders, change the
provisions of this Section 13.13, release any material guarantor or
affect the number of Lenders required to take any action hereunder or
under any other Loan Document; and
(iii) no amendment to Section 12 hereof shall be made without
the consent of the Guarantor(s) affected thereby.
-66-
Section 13.14. Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
Section 13.15. Costs and Expenses; Indemnification. The Borrowers agree
to pay all costs and expenses of the Administrative Agent and the Canadian
Co-Agent in connection with the preparation, negotiation, and syndication of the
Loan Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and the Canadian Co-Agent,
in connection with the preparation and execution of the Loan Documents, and any
amendment, waiver or consent related thereto, whether or not the transactions
contemplated herein are consummated. The Borrowers further agree to indemnify
the Administrative Agent, the Canadian Co-Agent, each Lender, and their
respective directors, officers, employees, agents, financial advisors, and
consultants against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all reasonable expenses
of litigation or preparation therefor, whether or not the indemnified Person is
a party thereto, or any settlement arrangement arising from or relating to any
such litigation) which any of them may pay or incur arising out of or relating
to any Loan Document or any of the transactions contemplated thereby or the
direct or indirect application or proposed application of the proceeds of any
Loan or Letter of Credit, other than those which arise from the gross negligence
or willful misconduct of the party claiming indemnification. The Borrowers, upon
demand by the Administrative Agent, the Canadian Co-Agent, or a Lender at any
time, shall reimburse the Administrative Agent, the Canadian Co-Agent, or such
Lender for any legal or other expenses incurred in connection with investigating
or defending against any of the foregoing (including any settlement costs
relating to the foregoing) except if the same is directly due to the gross
negligence or willful misconduct of the party to be indemnified. The obligations
of the Borrowers under this Section shall survive the termination of this
Agreement.
Section 13.16. Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender and each subsequent
holder of any Obligation is hereby authorized by each Borrower and each
Guarantor at any time or from time to time, without notice to any Borrower or
such Guarantor or to any other Person, any such notice being hereby expressly
waived, to set-off and to appropriate and to apply any and all deposits (general
or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts, and in whatever currency denominated) and any other indebtedness at
any time held or owing by that Lender or that subsequent holder to or for the
credit or the account of such Borrower or such Guarantor, whether or not
matured, against and on account of the Obligations of the such Borrower or such
Guarantor to that Lender or that subsequent holder under the Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with the Loan Documents, irrespective of whether or not (a)
that Lender or that subsequent holder shall have made any demand hereunder or
(b) the principal of or the interest on the Loans or Notes and other amounts due
hereunder shall have become due and payable pursuant to Section 9 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
-67-
Section 13.17. Entire Agreement. The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.
Section 13.18. Governing Law. This Agreement and the other Loan Documents
(except as otherwise specified therein), and the rights and duties of the
parties hereto, shall be construed and determined in accordance with the
internal laws of the State of Illinois.
Section 13.19. Severability of Provisions. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and the other Loan Documents may be
exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.
Section 13.20. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document ("Excess Interest"). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) no Borrower nor any guarantor or endorser shall be obligated to pay any
Excess Interest, (c) any Excess Interest that the Administrative Agent or any
Lender may have received hereunder shall, at the option of the Administrative
Agent, be (i) applied as a credit against the then outstanding principal amount
of Obligations hereunder and accrued and unpaid interest thereon (not to exceed
the maximum amount permitted by applicable law), (ii) refunded to the relevant
Borrower, or (iii) any combination of the foregoing, (d) the interest rate
payable hereunder or under any other Loan Document shall be automatically
subject to reduction to the maximum lawful contract rate allowed under
applicable usury laws (the "Maximum Rate"), and this Agreement and the other
Loan Documents shall be deemed to have been, and shall be, reformed and modified
to reflect such reduction in the relevant interest rate, and (e) no Borrower nor
any guarantor or endorser shall have any action against the Administrative Agent
or any Lender for any damages whatsoever arising out of the payment or
collection of any Excess Interest. Notwithstanding the foregoing, if for any
period of time interest on any of a Borrower's Obligations is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on such Borrower's Obligations shall remain at the Maximum Rate
until the Lenders have received the amount of interest which such Lenders would
have received during such period on such Obligations had the rate of interest
not been limited to the Maximum Rate during such period. Without limiting the
foregoing, with respect to the Obligations of the Borrowing Subsidiary, in no
event shall the aggregate "interest" (as that term
-68-
is defined in Section 347 of the Criminal Code (Canada) as the same may be
amended, replaced or re-enacted from time to time) payable by the Borrowing
Subsidiary hereunder exceed the effective annual rate of interest on the "credit
advanced" (as defined therein) hereunder lawfully permitted under that section;
and the effective annual rate of interest shall be determined in accordance with
generally accepted actuarial practices and principles over the term of the Term
Loans, and in the event of dispute, a certificate of a Fellow of the Canadian
Institute of Actuaries appointed by the Administrative Agent or the Canadian
Co-Agent will be conclusive for the purpose of such determination.
Section 13.21. Construction. NOTHING CONTAINED HEREIN SHALL BE DEEMED OR
CONSTRUED TO PERMIT ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF ANY
OTHER LOAN DOCUMENT, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING IN
ADDITION TO AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS CONTAINED
IN THE OTHER LOAN DOCUMENTS.
Section 13.22. Currency. Each reference in this Agreement to U.S.
Dollars or to Canadian Dollars (the "relevant currency") is of the essence. To
the fullest extent permitted by law, the obligation of each Borrower and each
Guarantor in respect of any amount due in the relevant currency under this
Agreement shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Person entitled to receive such payment
may, in accordance with normal banking procedures, purchase with the sum paid in
such other currency (after any premium and costs of exchange) on the Business
Day immediately following the day on which such Person receives such payment. If
the amount of the relevant currency so purchased is less than the sum originally
due to such Person in the relevant currency, the relevant Borrower or relevant
Guarantor agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Person against such loss, and if the amount of the
specified currency so purchased exceeds the sum of (a) the amount originally due
to the relevant Person in the specified currency plus (b) any amounts shared
with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Person under Section 13.7 hereof, such Person
agrees to remit such excess to the relevant Borrower.
Section 13.23. Lender's Obligations Several. The obligations of the
Lenders hereunder are several and not joint. Nothing contained in this Agreement
and no action taken by the Lenders pursuant hereto shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.
Section 13.24. Submission to Jurisdiction; Waiver of Jury Trial. The
Parent, the Borrowing Subsidiary, and the Guarantors hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Northern
District of Illinois and of any Illinois State court sitting in the City of
Chicago for purposes of all legal proceedings arising out of or relating to this
Agreement, the other Loan Documents or the transactions contemplated hereby or
thereby. The Parent, the Borrowing Subsidiary, and the Guarantors irrevocably
waive, to the fullest extent permitted by law, any objection which they may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. THE PARENT, THE BORROWING
-69-
SUBSIDIARY, THE GUARANTORS, THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
Section 13.25. USA Patriot Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) or the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada) (the "Acts") hereby notifies the Parent and the Borrowing
Subsidiary that pursuant to the requirements of the Acts, it is required to
obtain, verify, and record information that identifies the Parent and the
Borrowing Subsidiary, which information includes the name and address of the
Parent and the Borrowing Subsidiary and other information that will allow such
Lender to identify the Parent and the Borrowing Subsidiary in accordance with
the Acts.
[SIGNATURE PAGES TO FOLLOW]
-70-
This Multicurrency Credit Agreement is entered into between us for the
uses and purposes hereinabove set forth as of the date first above written.
LOJACK CORPORATION, as Parent and
Guarantor
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President
LOJACK EXCHANGECO CANADA INC., as
Borrowing Subsidiary
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President
LOJACK INTERNATIONAL CORPORATION, as
Guarantor
By /s/ Xxxxxxx X. Xxxxxx
Name Xxxxxxx X. Xxxxxx
Title President
LOJACK GLOBAL LLC, as Guarantor
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President
LOJACK OPERATING COMPANY, L.P., as
Guarantor
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President, LoJack Corporation,
its General Partner
S-1
6292887 CANADA INC., as Guarantor
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President
6297072 CANADA INC., as Guarantor
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President
BOOMERANG TRACKING INC.
By /s/ Xxxxxx X. Xxxxx
Name Xxxxxx X. Xxxxx
Title President
S-2
"LENDERS"
XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Lender, as
L/C Issuer, and as Administrative Agent
By /s/ Xxxxxxx X. Xxxxxxxx
Name Xxxxxxx X. Xxxxxxxx
Title Managing Director
Address:
000 Xxxx Xxxxxx Xxxxxx, 00X
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
S-3
BANK OF MONTREAL, in its individual
capacity as a Lender and as
Canadian Co-Agent
By /s/ Xxx Xxxxxxxxx
Name Xxx Xxxxxxxxx
Title Vice President
Address:
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxx X0X 0X0
Attention: ___________________________
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
S-4
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Lender]
[Address]
Attention:
Reference is made to the Multicurrency Credit Agreement, dated as of
October 29, 2004, among LoJack Corporation, LoJack Exchangeco Canada Inc., the
Lenders party thereto, and Xxxxxx Trust and Savings Bank, as Administrative
Agent (as extended, renewed, amended or restated from time to time, the "Credit
Agreement"). Capitalized terms used herein and not defined herein have the
meanings assigned to them in the Credit Agreement. [The Parent has failed to pay
its Reimbursement Obligation in the amount of $___________. Your Revolver
Percentage of the unpaid Reimbursement Obligation is $___________] or
[_______________________ has been required to return a payment by the Parent of
a Reimbursement Obligation in the amount of $_______________. Your Revolver
Percentage of the returned Reimbursement Obligation is $_______________.]
Very truly yours,
XXXXXX TRUST AND SAVINGS BANK, as L/C
Issuer
By
Name__________________________________
Title_________________________________
EXHIBIT B
NOTICE OF BORROWING
Date:________________________, ____
To: Xxxxxx Trust and Savings Bank, as Administrative Agent for the Lenders
parties to the Multicurrency Credit Agreement dated as of October 29,
2004 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), among LoJack Corporation, LoJack Exchangeco Canada
Inc., certain Lenders which are signatories thereto, and Xxxxxx Trust
and Savings Bank, as Administrative Agent
Ladies and Gentlemen:
The undersigned, LoJack Corporation (the "Parent"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.6 of the
Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
___________, ____.
2. The aggregate amount of the proposed Borrowing is
$______________.
3. The Borrowing is being advanced under the [Revolving]
[Term] Credit.
4. The Borrowing is to be comprised of [U.S. $___________ of
[U.S. Base Rate Loans] [Eurocurrency Loans]] or [Cdn $________ of
[Canadian Base Rate Loans] [Eurocurrency Loans]].
[5. The duration of the Interest Period for the Eurocurrency
Loans included in the Borrowing shall be ____________ months.]
The undersigned on its own behalf and on behalf of the Borrowing
Subsidiary hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the proposed Borrowing, before and after
giving effect thereto and to the application of the proceeds therefrom:
(a) the representations and warranties of the Parent
contained in Section 6 of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date); and
(b) no Default or Event of Default has occurred and is
continuing or would result from such proposed Borrowing.
LOJACK CORPORATION, as agent for the
Borrowers
By
Name__________________________________
Title_________________________________
EXHIBIT C
NOTICE OF CONTINUATION/CONVERSION
Date: ____________, ____
To: Xxxxxx Trust and Savings Bank, as Administrative Agent for the Lenders
parties to the Multicurrency Credit Agreement dated as of October 29,
2004 (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), among LoJack Corporation, LoJack Exchangeco Canada
Inc., certain Lenders which are signatories thereto, and Xxxxxx Trust and
Savings Bank, as Administrative Agent
Ladies and Gentlemen:
The undersigned, LoJack Corporation (the "Parent"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.6 of the
Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The conversion/continuation Date is __________, ____.
2. The aggregate amount of the [Revolving] [Term] Loans to
be [converted] [continued] is $____________.
3. The Loans are to be [converted into] [continued as]
[Eurocurrency] [U.S. Base Rate] [Canadian Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for
the [Revolving] [Term] Loans included in the [conversion]
[continuation] shall be _________ months.
The undersigned on its own behalf and on behalf of the Borrowing
Subsidiary hereby certifies that the following statements are true on the date
hereof, and will be true on the proposed conversion/continuation date, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Parent
contained in Section 6 of the Credit Agreement are true and correct as
though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date); provided, however, that
this condition shall not apply to the conversion of an outstanding
Eurocurrency Loan to a Base Rate Loan; and
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion]
[continuation].
LOJACK CORPORATION, as agent for the
Borrowers
By
Name___________________________________
Title__________________________________
EXHIBIT D-1
TERM NOTE
Cdn. $_______________ ____________, _______
FOR VALUE RECEIVED, the undersigned, LOJACK EXCHANGECO CANADA INC., a
Canadian corporation (the "Borrowing Subsidiary"), hereby promises to pay to the
order of _________________________ (the "Lender") at the principal office of the
Canadian Co-Agent, in immediately available funds, the principal sum of
___________________ Cdn Dollars (Cdn $__________) or, if less, the aggregate
unpaid principal amount of all Term Loans made or maintained by the Lender to
the Borrowing Subsidiary pursuant to the Credit Agreement, in installments in
the amounts called for by Section 1.8(a) of the Credit Agreement, commencing on
___________, together with interest on the principal amount of such Term Loan
from time to time outstanding hereunder at the rates, and payable in the manner
and on the dates, specified in the Credit Agreement.
This Note is one of the Term Notes referred to in the Multicurrency
Credit Agreement dated as of October 29, 2004, among LoJack Corporation, as
Parent, the Borrowing Subsidiary, the Guarantors party thereto, the Lenders
party thereto, and Xxxxxx Trust and Savings Bank, as Administrative Agent for
the Lenders (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), and this Note and the holder hereof are entitled to all the
benefits provided for thereby or referred to therein, to which Credit Agreement
reference is hereby made for a statement thereof. All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement. This Note shall be governed by and construed in accordance
with the internal laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The Borrowing Subsidiary hereby waives demand, presentment, protest or
notice of any kind hereunder.
LOJACK EXCHANGECO CANADA INC.
By
Name___________________________________
Title__________________________________
EXHIBIT D-2
REVOLVING NOTE
U.S. $_______________ ____________, ______
FOR VALUE RECEIVED, the undersigned, LOJACK CORPORATION, a
Massachusetts corporation (the "Parent"), hereby promises to pay to the order of
____________________ (the "Lender") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office of the
Administrative Agent, in immediately available funds, the principal sum of
___________________ U.S. Dollars (U.S. $__________) or, if less, the aggregate
unpaid principal amount of all Revolving Loans made by the Lender to the Parent
pursuant to the Credit Agreement, together with interest on the principal amount
of each Revolving Loan from time to time outstanding hereunder at the rates, and
payable in the manner and on the dates, specified in the Credit Agreement.
This Note is one of the Revolving Notes referred to in the
Multicurrency Credit Agreement dated as of October 29, 2004, among the Parent,
the Borrowing Subsidiary referred to therein, the Guarantors party thereto, the
Lenders party thereto, and Xxxxxx Trust and Savings Bank, as Administrative
Agent for the Lenders (as extended, renewed, amended or restated from time to
time, the "Credit Agreement"), and this Note and the holder hereof are entitled
to all the benefits provided for thereby or referred to therein, to which Credit
Agreement reference is hereby made for a statement thereof. All defined terms
used in this Note, except terms otherwise defined herein, shall have the same
meaning as in the Credit Agreement. This Note shall be governed by and construed
in accordance with the internal laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.
The Parent hereby waives demand, presentment, protest or notice of any
kind hereunder.
LOJACK CORPORATION
By
Name___________________________________
Title__________________________________
EXHIBIT E
LOJACK CORPORATION
COMPLIANCE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as
Administrative Agent under, and the Lenders
party to, the Credit Agreement described below
This Compliance Certificate is furnished to the Administrative Agent
and the Lenders pursuant to that certain Multicurrency Credit Agreement dated as
of October 29, 2004, among LoJack Corporation, LoJack Exchangeco Canada Inc.,
and you (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"). Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ____________ of LoJack Corporation;
2. I have reviewed the terms of the Credit Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Parent and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or the occurrence of any
event which constitutes a Default or Event of Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Compliance Certificate, except as set forth below;
4. The financial statements required by Section 8.5 of the Credit
Agreement and being furnished to you concurrently with this Compliance
Certificate are true, correct and complete as of the date and for the periods
covered thereby; and
5. The Schedule I hereto sets forth financial data and computations
evidencing the Parent's compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Parent has taken, is taking, or proposes to
take with respect to each such condition or event:
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ______ day of
__________________ 20___.
LOJACK CORPORATION
By
Name___________________________________
Title__________________________________
-2-
SCHEDULE I
TO COMPLIANCE CERTIFICATE
LOJACK CORPORATION
COMPLIANCE CALCULATIONS
FOR MULTICURRENCY CREDIT AGREEMENT DATED AS OF OCTOBER 29, 2004
CALCULATIONS AS OF _____________, _______
================================================================================
A. Leverage Ratio (Section 8.22(a))
1. Total Funded Debt $___________
2. Net Income for past 4 quarters ___________
3. Interest Expense for past 4 quarters ___________
4. Income taxes for past 4 quarters ___________
5. Depreciation and Amortization Expense for past 4 quarters ___________
6. Boomerang adjustment ___________
7. Sum of Lines A2, A3, A4, A5 and A6 ("EBITDA") ___________
8. Ratio of Line A1 to A7 ____:1.0
9. Line A8 ratio must not exceed ____:1.0
10. The Parent is in compliance (circle yes or no) yes/no
B. Net Worth (Section 8.22(b))
1. Net Worth $___________
2. Line B1 shall not be less than $___________
3. The Parent is in compliance (circle yes or no) yes/no
C. Fixed Charge Coverage Ratio (Section 8.22(c))
1. EBITDA (Line A7 above) $___________
2. Principal payments for past 4 quarters $___________
3. Interest Expense for past 4 quarters $___________
4. Rental Expense for past 4 quarters $___________
5. Income taxes for past 4 quarters $___________
6. Sum of Lines C2, C3, C4, and C5 $___________
7. Ratio of Line C1 to Line C6 ____:1.0
8. Line C7 ratio must not be less than ____:1.0
9. The Parent is in compliance (circle yes or no) yes/no
D. Capital Expenditures (Section 8.22(d))
1. Year-to-date Capital Expenditures $___________
2. Maximum permitted amount $___________
3. The Parent is in compliance (circle yes or no) yes/no
-2-
EXHIBIT F
ADDITIONAL GUARANTOR SUPPLEMENT
______________, ____
XXXXXX TRUST AND SAVINGS BANK, as Administrative
Agent for the Lenders named in the Multicurrency
Credit Agreement dated as of October 29, 2004, among
LoJack Corporation, as Parent, the Borrowing
Subsidiary and Guarantors referred to therein, the
Lenders from time to time party thereto, and the
Administrative Agent (as extended, renewed, amended
or restated from time to time, the "Credit Agreement")
Ladies and Gentlemen:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of
incorporation or organization] hereby elects to be a "Guarantor" for all
purposes of the Credit Agreement, effective from the date hereof. The
undersigned confirms that the representations and warranties set forth in
Section 6 of the Credit Agreement are true and correct as to the undersigned as
of the date hereof and the undersigned shall comply with each of the covenants
set forth in Section 8 of the Credit Agreement applicable to it.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 12 thereof, to the same extent and with the same force and
effect as if the undersigned were a signatory party thereto.
The undersigned acknowledges that this Agreement shall be effective
upon its execution and delivery o by the undersigned to the Administrative
Agent, and it shall not be necessary for the Administrative Agent or any Lender,
or any of their Affiliates entitled to the benefits hereof, to execute this
Agreement or any other acceptance hereof. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Illinois.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By
Name__________________________________
Title_________________________________
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated _____________, _____
Reference is made to the Multicurrency Credit Agreement dated as of
October 29, 2004 (as extended, renewed, amended or restated from time to time,
the "Credit Agreement") among LoJack Corporation, LoJack Exchangeco Canada Inc,
as Borrowing Subsidiary, the Guarantors party thereto, the Lenders party
thereto, and Xxxxxx Trust and Savings Bank, as Administrative Agent for the
Lenders (the "Administrative Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
______________________________________________________ (the "Assignor")
and _________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, a
_______% interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the Effective Date (as
defined below), including, without limitation, such percentage interest
in the Assignor's Commitments as in effect on the Effective Date and
the Loans, if any, owing to the Assignor on the Effective Date and the
Assignor's Revolver Percentage of any outstanding L/C Obligations.
2. The Assignor (i) represents and warrants that as of the
date hereof (A) its Revolving Credit Commitment is U.S.
$_______________, its Term Loan Commitment is Cdn. $_______________,
(B) the aggregate outstanding principal amount of Loans made by it
under the Credit Agreement that have not been repaid is U.S.
$___________ of Revolving Loans, and Cdn $____________ of Term Loans,
and a description of the interest rates and interest periods of such
Loans is attached as Annex 1 hereto, and (C) the aggregate principal
amount of Assignor's Revolver Percentage of outstanding L/C Obligations
is $___________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim, lien, or
encumbrance of any kind; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Parent or any Subsidiary or the performance or
observance by the Parent or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the most recent financial
statements delivered to the Lenders pursuant to Section 8.5 (a) and (b)
thereof and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) appoints and authorizes the
Administrative Agent to take such action as Administrative Agent on its
behalf and to exercise such powers under the Credit Agreement and the
other Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (v)
specifies as its lending office (and address for notices) the offices
set forth beneath its name on the signature pages hereof.
4. As consideration for the assignment and sale contemplated
in Annex 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in Federal funds an amount equal to $________________*.
It is understood that commitment and/or letter of credit fees accrued
to the Effective Date with respect to the interest assigned hereby are
for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of
the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other
party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
5. The effective date for this Assignment and Acceptance
shall be ___________ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative
Agent and, if required, the Parent.
6. Upon such acceptance and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and
______
***
-2-
Assignee shall make all appropriate adjustments in payments under the
Credit Agreement for periods prior to the Effective Date directly
between themselves.
8. In accordance with Section 13.12 of the Credit Agreement,
the Assignor and the Assignee request and direct that the
Administrative Agent prepare and cause the Parent to execute and
deliver to the Assignee the relevant Notes payable to the Assignee in
the amount of its Commitments and new Notes to the Assignor in the
amount of its Commitments after giving effect to this assignment.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[Assignor Lender]
By
Name__________________________________
Title_________________________________
[Assignee Lender]
By
Name__________________________________
Title_________________________________
Lending office (and address for notices):
Accepted and consented this
____ day of _____________
LOJACK CORPORATION
By_________________________________
Name__________________________
Title_________________________
Accepted and consented to by the Administrative
Agent and L/C Issuer this ___ day of ________
XXXXXX TRUST AND SAVINGS BANK, as
Administrative Agent and L/C Issuer
By_________________________________
Name__________________________
Title_________________________
-3-
ANNEX I
TO ASSIGNMENT AND ACCEPTANCE
PRINCIPAL AMOUNT TYPE OF LOAN INTEREST RATE MATURITY DATE
SCHEDULE 1
COMMITMENTS
TERM B LOAN REVOLVING CREDIT
NAME OF LENDER COMMITMENT COMMITMENT
Xxxxxx Trust and Savings Bank N/A U.S. $10,000,000
Bank of Montreal Cdn. $_________ N/A
TOTAL Cdn. $ U.S. $10,000,000
========== ================
SCHEDULE 6.2
SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME ORGANIZATION OWNERSHIP OWNER
LoJack Exchangeco Canada Inc. Canada 100% LoJack Corporation
LoJack International Corporation Delaware 100% LoJack Corporation
LoJack Global LLC Delaware 100% LoJack Corporation
LoJack Operating Company, L.P. Delaware 100% LoJack Corporation
6292887 Canada Inc. Canada 100% LoJack Corporation
6297072 Canada Inc. Canada 100% LoJack Corporation
Vehicle Recovery Systems Company* Canada 100% LoJack Corporation
LoJack de Mexico, S. de X.X. de CV Mexico 100% LoJack Corporation
LoJack do Brasil LTDA Brazil 100% LoJack Corporation
LoJack International Benelux Belgium 100% LoJack Corporation
LoJack Italia Srl Italy 100% LoJack Corporation
And, after giving effect to the Boomerang Acquisition:
Boomerang Tracking Inc. Canada ____% LoJack Exchangeco Canada Inc.
______________
*Inactive Subsidiary
SCHEDULE 8.7/8/8
PERMITTED INDEBTEDNESS AND LIENS
DESCRIPTION OF
DESCRIPTION OF INDEBTEDNESS COLLATERAL/SECURITY, IF ANY
1. Revolving line of credit extended by Citizens Bank None
and Trust Company to the Parent, including loans and
letters of credit issued for the account of the Parent,
in an aggregate amount not exceed U.S. $5,000,000 at
any one time outstanding
--------
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
