Exhibit 10.1
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JOSTENS, INC.
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CREDIT AGREEMENT
dated as of July 29, 2003
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Senior Secured Credit Facilities
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CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
and
CREDIT SUISSE FIRST BOSTON TORONTO BRANCH,
as Canadian Administrative Agent
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CREDIT SUISSE FIRST BOSTON
and
DEUTSCHE BANK SECURITIES INC.,
as Joint Bookrunners and Joint Lead Arrangers
and
DEUTSCHE BANK SECURITIES INC.,
as Syndication Agent
and
THE BANK OF NEW YORK,
FLEET NATIONAL BANK
and
XXXXX FARGO BANK, N.A.
As Co-Documentation Agents
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.......................................................1
1.1 Defined Terms.....................................................1
1.2 Other Definitional Provisions....................................32
1.3 Designated Senior Debt...........................................33
1.4 Several Obligations; Power of Attorney...........................33
1.5 Exchange Rate Calculations.......................................33
SECTION 2. TERM LOANS.......................................................33
2.1 Term Loans.......................................................33
2.2 Repayment of Term Loans..........................................34
2.3 Use of Proceeds..................................................34
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS.................34
3.1 Revolving Credit Commitments.....................................34
3.2 Commitment Fee...................................................35
3.3 Proceeds of Revolving Credit Loans...............................35
3.4 Swing Line Commitment............................................35
3.5 Issuance of Letters of Credit....................................37
3.6 Participating Interests..........................................38
3.7 Procedure for Opening Letters of Credit..........................38
3.8 Payments in Respect of Letters of Credit.........................38
3.9 Letter of Credit Fees............................................39
3.10 Letter of Credit Reserves........................................40
3.11 Further Assurances...............................................41
3.12 Obligations Absolute.............................................41
3.13 Assignments......................................................42
3.14 Participations...................................................42
3.15 Increase in Revolving Credit Commitments.........................42
SECTION 4. AMOUNT AND TERMS OF THE CANADIAN DOLLAR LOAN SUB-FACILITY........44
4.1 The Canadian Dollar Loan Commitment..............................44
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TABLE OF CONTENTS
(continued)
Page
4.2 Procedure for C$ Prime Loan Borrowing............................44
4.3 Bankers' Acceptances.............................................44
4.4 Conversion Option................................................48
4.5 Circumstances Making Bankers' Acceptances Unavailable............49
4.6 Reports..........................................................49
4.7 Use of Proceeds of C$ Loans......................................50
4.8 Non-BA Lenders...................................................50
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS...........................50
5.1 Procedure for Borrowing..........................................50
5.2 Conversion and Continuation Options..............................51
5.3 Changes of Commitment Amounts....................................52
5.4 Optional and Mandatory Prepayments; Repayments of Term Loans.....53
5.5 Interest Rates and Payment Dates.................................57
5.6 Computation of Interest and Fees.................................59
5.7 Certain Fees.....................................................59
5.8 Inability to Determine Interest Rate.............................59
5.9 Pro Rata Treatment and Payments..................................60
5.10 Illegality.......................................................63
5.11 Requirements of Law..............................................64
5.12 Indemnity........................................................68
5.13 Repayment of Loans; Evidence of Debt.............................69
5.14 Replacement of Lenders...........................................70
5.15 Reliance on Representation of the U.S. Borrower..................71
SECTION 6. REPRESENTATIONS AND WARRANTIES...................................71
6.1 Financial Condition..............................................72
6.2 No Material Adverse Change.......................................72
6.3 Existence; Compliance with Law...................................72
6.4 Power; Authorization.............................................73
6.5 Enforceable Obligations..........................................73
6.6 No Legal Bar.....................................................73
6.7 No Material Litigation...........................................74
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TABLE OF CONTENTS
(continued)
Page
6.8 Investment Company Act; Public Utility Holding Company Act.......74
6.9 Federal Reserve Regulation.......................................74
6.10 No Default.......................................................74
6.11 Taxes............................................................75
6.12 Subsidiaries.....................................................75
6.13 Ownership of Property; Liens.....................................75
6.14 ERISA............................................................75
6.15 Collateral Documents.............................................76
6.16 Copyrights, Patents, Permits, Trademarks and Licenses............77
6.17 Environmental Matters............................................77
6.18 Accuracy and Completeness of Information.........................78
6.19 Solvency.........................................................79
6.20 Labor Matters....................................................79
SECTION 7. CONDITIONS PRECEDENT.............................................79
7.1 Conditions to Initial Loans and Letters of Credit................79
7.2 Conditions to All Post-Closing Date Loans (Other than the
Change of Control Loans) and Letters of Credit................83
7.3 Conditions to Borrowing of the Change of Control Loans...........84
SECTION 8. AFFIRMATIVE COVENANTS............................................84
8.1 Financial Statements.............................................84
8.2 Certificates; Other Information..................................85
8.3 Payment of Obligations...........................................86
8.4 Conduct of Business and Maintenance of Existence.................87
8.5 Maintenance of Property; Insurance...............................87
8.6 Inspection of Property; Books and Records; Discussions...........87
8.7 Notices..........................................................88
8.8 Environmental Laws...............................................89
8.9 Additional Collateral............................................89
8.10 Change of Control Offers.........................................92
SECTION 9. NEGATIVE COVENANTS...............................................92
9.1 Indebtedness.....................................................92
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TABLE OF CONTENTS
(continued)
Page
9.2 Limitation on Liens..............................................95
9.3 Limitation on Contingent Obligations.............................98
9.4 Prohibition of Fundamental Changes...............................99
9.5 Prohibition on Sale of Assets....................................99
9.6 Limitation on Investments, Loans and Advances...................102
9.7 Capital Expenditures............................................104
9.8 Interest Rate Agreements........................................105
9.9 Debt to EBITDA..................................................105
9.10 Interest Coverage...............................................107
9.11 Limitation on Restricted Payments...............................107
9.12 Transactions with Affiliates....................................110
9.13 Limitation on Changes in Fiscal Year............................111
9.14 Limitation on Lines of Business.................................111
9.15 Amendments to Certain Documents.................................111
9.16 Limitation on Amendments of Certain Debt........................111
9.17 Limitation on Sales and Leasebacks..............................112
9.18 Limitations on Changes in Holding Company Status................112
SECTION 10. EVENTS OF DEFAULT...............................................112
SECTION 11. THE ADMINISTRATIVE AGENTS; THE ISSUING LENDER...................115
11.1 Appointment.....................................................115
11.2 Delegation of Duties............................................116
11.3 Exculpatory Provisions..........................................116
11.4 Reliance by Administrative Agents...............................116
11.5 Notice of Default...............................................117
11.6 Non-Reliance on Administrative Agent and Other Lenders..........117
11.7 Indemnification.................................................118
11.8 The Administrative Agents in their Individual Capacities........118
11.9 Successor Administrative Agent..................................118
11.10 Issuing Lender as Issuer of Letters of Credit...................119
11.11 Administrative Agent as Joint and Several Creditor..............119
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TABLE OF CONTENTS
(continued)
Page
SECTION 12. MISCELLANEOUS...................................................119
12.1 Amendments and Waivers..........................................119
12.2 Notices.........................................................121
12.3 No Waiver; Cumulative Remedies..................................123
12.4 Survival of Representations and Warranties......................123
12.5 Payment of Expenses and Taxes...................................123
12.6 Successors and Assigns; Participations and Assignments..........125
12.7 Adjustments; Set-off............................................130
12.8 Counterparts....................................................131
12.9 Governing Law; No Third Party Rights............................132
12.10 Submission to Jurisdiction; Waivers.............................132
12.11 Releases........................................................132
12.12 Interest........................................................133
12.13 Special Indemnification.........................................133
12.14 Tax Disclosure..................................................134
12.15 Documentation Agents............................................134
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SCHEDULES
Schedule I Lenders; Addresses and Commitments
Schedule II Pricing Grid
Schedule 1.1(a) Specified Sale-Leaseback Transactions
Schedule 6.7 Litigation
Schedule 6.12 Subsidiaries
Schedule 6.13 Fee and Leased Properties
Schedule 6.15(b) UCC Filing Offices
Schedule 6.16 Trademarks and Copyrights
Schedule 9.1(a) Existing Indebtedness
Schedule 9.2(h) Existing Liens
Schedule 9.3(d) Existing Contingent Obligations
Schedule 9.6(k) Existing Investments
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B-1 Form of Closing Date Term Note
EXHIBIT B-2 Form of Change of Control Term Note
EXHIBIT C-1 Form of Swing Line Note
EXHIBIT C-2 Form of C$ Note
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Collateral Agreement
EXHIBIT F Form of Domestic Subsidiary Guarantee
EXHIBIT G Form of L/C Participation Certificate
EXHIBIT H Form of Swing Line Loan Participation Certificate
EXHIBIT I Form of Subsection 5.11(e)(2) Certificate
EXHIBIT J-1 Form of Opinion of Weil, Gotshal & Xxxxxx LLP
EXHIBIT J-2 Form of Opinion of General Counsel to the Borrower
EXHIBIT J-3 Form of Opinion of Special Canadian Counsel
EXHIBIT K-1 Form of Borrower Closing Certificate
EXHIBIT K-2 Form of Credit Parties Closing Certificate
EXHIBIT L Form of Canadian Guarantee
EXHIBIT M Form of Canadian Collateral Agreement
EXHIBIT N [Reserved]
EXHIBIT O Form of Report
EXHIBIT P [Reserved]
EXHIBIT Q Form of Holdings Guarantee
EXHIBIT R Form of Scotiabank Intercreditor Agreement
EXHIBIT S Form of Canadian Subsidiary Guarantee
vi
CREDIT AGREEMENT dated as of July 29, 2003, among RING ACQUISITION
CORP., a Minnesota corporation (the "U.S. Borrower"), JOSTENS CANADA LTD., a
Manitoba corporation (the "Canadian Borrower" and, collectively with the U.S.
Borrower, the "Borrowing Parties"), RING IH CORP., a Delaware corporation
("Holdings"), the Lenders (as defined in subsection 1.1), CREDIT SUISSE FIRST
BOSTON, a bank organized under the laws of Switzerland ("CSFB"), as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), and CREDIT SUISSE FIRST BOSTON TORONTO BRANCH, as administrative agent
for the Canadian Lenders (as defined in subsection 1.1) (the "Canadian
Administrative Agent").
W I T N E S S E T H :
WHEREAS, pursuant to the Agreement and Plan of Merger dated as of June
17, 2003 (as amended, restated, supplemented or otherwise modified from time to
time, the "Merger Agreement"), among the U.S. Borrower, Ring Holding Corp., a
Delaware corporation that owns 100% of the issued and outstanding common stock
of Holdings (to be known as Jostens Holding Corp. following the Merger) (the
"Parent"), and Jostens, Inc., a Minnesota corporation (the "Company"), the U.S.
Borrower will merge (the "Merger") with and into the Company, with the Company
being the surviving entity. Upon the effectiveness of the Merger, (a) the
Company shall succeed to all rights and obligations of the U.S. Borrower by
operation of law and without further action by any Person, and all references
herein and in the other Credit Documents to the term "U.S. Borrower" shall
thereupon be deemed to be references to the Company and (b) Holdings will change
its name to Jostens IH Corp., and all references herein and in the other Credit
Documents to the term "Holdings" shall thereupon be deemed to be references to
Jostens IH Corp..
WHEREAS, the U.S. Lenders and the Swing Line Lender are willing to
extend credit to the U.S. Borrower, the Issuing Lender is willing to issue
Letters of Credit for the account of the U.S. Borrower, and the Canadian Lenders
are willing to extend credit to the Canadian Borrower and, through their
respective Affiliates, to the U.S. Borrower, in each case on the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms defined in the
Preamble or Recitals hereto shall have the meanings set forth therein, and the
following terms have the following meanings:
"Acceptance Fee": the fee payable in Canadian Dollars by the Canadian
Borrower to the Canadian Administrative Agent for the account of a Canadian
Lender with respect to any Bankers' Acceptance pursuant to subsection 4.3(e).
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"Acquired Capital Expenditures": as defined in subsection 9.7.
"Acquired Person": as defined in subsection 9.7.
"Additional U.S. Revolving Credit Commitment": for each Additional
U.S. Revolving Credit Lender, any commitment to make U.S. Revolving Credit Loans
by such Lender pursuant to subsection 3.15, in such amount as agreed to by such
Lender in the respective Additional U.S. Revolving Credit Commitment Agreement;
provided that on the date upon which an Additional U.S. Revolving Credit
Commitment of any Additional U.S. Revolving Credit Lender becomes effective
(each, an "Additional U.S. Revolving Credit Commitment Date"), such Additional
U.S. Revolving Credit Commitment of such Additional U.S. Revolving Credit Lender
shall be added to (and thereafter become a part of) (i) the U.S. Revolving
Credit Commitment of such Additional U.S. Revolving Credit Lender for all
purposes of this Agreement as contemplated by subsection 3.15 and (ii) the U.S.
Revolving Credit Commitments.
"Additional U.S. Revolving Credit Commitment Agreement": an agreement
pursuant to which any Person agrees to provide an Additional U.S. Revolving
Credit Commitment, which agreement shall be in such form and substance as shall
be reasonably approved by the Administrative Agent and reasonably acceptable to
the U.S. Borrower.
"Additional U.S. Revolving Credit Commitment Date": as defined in the
definition of Additional U.S. Revolving Credit Commitment.
"Additional U.S. Revolving Credit Lender": as defined in subsection
3.15(b).
"Adjustment Date": as defined in the definition of Applicable Margin.
"Administrative Agent": as defined in the Preamble hereto.
"Administrative Agents": the collective reference to the
Administrative Agent and the Canadian Administrative Agent.
"Affiliate": of any Person means any Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such Person; provided, however, that, for purposes of
subsection 9.12 only, the term "Affiliate" shall also include (a) any Person who
is a director or officer of such Person and (b) any Person that directly or
indirectly owns 15% or more of the issued and outstanding Capital Stock having
ordinary voting power in the election of directors (or comparable governing
body) of such Person. For purposes of this definition, control of a Person shall
mean the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether by ownership of securities,
contract, proxy or otherwise. Notwithstanding the foregoing, neither of the
Administrative Agents nor any Lender shall be deemed to be an Affiliate of the
Parent, Holdings, the U.S. Borrower or any of their respective Subsidiaries.
2
"Aggregate Canadian Revolving Credit Exposure": with respect to all
Canadian Lenders at any time, the aggregate principal amount at such time of all
outstanding Canadian Revolving Credit Loans of such Lenders plus the U.S. Dollar
Equivalent of the aggregate principal amount at such time of all outstanding C$
Loans of such Lenders.
"Aggregate U.S. Revolving Credit Exposure": with respect to all U.S.
Lenders at any time, the aggregate principal amount at such time of all
outstanding U.S. Revolving Credit Loans, Swing Line Loans, amounts available to
be drawn under outstanding Letters of Credit and L/C Obligations.
"Agreement": this Credit Agreement, as amended, restated, supplemented
or otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day, and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate
of interest per annum determined from time to time by the Administrative Agent
as its prime rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to debtors); and
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it. Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"Alternate Base Rate Loans": Loans at such time as they are made
and/or being maintained at a rate of interest based upon the Alternate Base
Rate.
"Applicable Administrative Agent": (a) with respect to the Swing Line
Loans, the Term Loans, the U.S. Revolving Credit Loans, the L/C Obligations and
the U.S. Revolving Credit Commitments, the Administrative Agent, and (b) with
respect to the Canadian Loans and the Canadian Revolving Credit Commitments, the
Canadian Administrative Agent.
"Applicable BA Discount Rate": (a) with respect to any Canadian Lender
that is a Schedule I Bank, as applicable to a Bankers' Acceptance being
purchased by such Canadian Lender on any day, the CDOR Rate; and (b) with
respect to any Canadian Lender that is not a Schedule I Bank, as applicable to a
Bankers' Acceptance being purchased by such Canadian Lender on any day, the
lesser of (i) the CDOR Rate plus 10 basis points (0.10%) and (ii) the arithmetic
average (as determined by the Canadian
3
Administrative Agent in good faith) of the respective percentage discount rates
(expressed to two decimal places and rounded upward, if necessary, to the
nearest 1/100th of 1%) quoted by the Schedule II/III Reference Banks as the
percentage discount rates at which the Schedule II/III Reference Banks would, in
accordance with their normal market practices, at or about 10:00 A.M. (Toronto
time) on such day, be prepared to purchase bankers' acceptances accepted by the
Schedule II/III Reference Banks having a term and face amount comparable to the
term and face amount of such Bankers' Acceptance.
"Applicable Margin": for Term Loans, Revolving Credit Loans and Swing
Line Loans of the Types set forth below, the rate per annum set forth under the
relevant column heading opposite such Loans below:
Alternate
Base Rate Eurodollar
Loans Loans
--------- --------------
Term Loans 1.50% 2.50%
Revolving Credit Loans 1.75% 2.75%
Swing Line Loans 1.75% Not applicable
; provided that, (a) from and after the date on which financial statements for
the Fiscal Year ended January 2, 2004 are delivered pursuant to subsection 8.1,
the Applicable Margin with respect to the Revolving Credit Loans and Swing Line
Loans will be adjusted on each Adjustment Date (as defined below) to the
applicable rate per annum set forth in the pricing grid attached hereto as
Schedule II based on the Leverage Ratio as determined from the relevant
financial statements most recently delivered pursuant to subsection 8.1. Changes
in the Applicable Margin resulting from changes in the Leverage Ratio shall
become effective on the date (the "Adjustment Date") on which such financial
statements are delivered to the Lenders (but in any event not later than the
50th day after the end of each of the first three quarterly periods of each
Fiscal Year or the 95th day after the end of each Fiscal Year as the case may
be) and shall remain in effect until the next change to be effected pursuant to
this definition; provided that (a) the Applicable Margin shall be initially the
rate per annum set forth under the relevant column heading above; (b) if for any
reason the financial statements required by subsection 8.1 are not timely
delivered to the Lenders, (i) during the period from the date upon which such
financial statements were required to be delivered until the date upon which
they actually are delivered, the Applicable Margin shall be the Applicable
Margin in effect immediately prior to the date such financial statements were
due, and (ii) if such financial statements, when actually delivered, would have
required an increase in the Applicable Margin over the Applicable Margin in
effect immediately prior to the date such financial statements were due, the
applicable Borrowing Party shall promptly following the delivery of such
financial statements pay to the Applicable Administrative Agent, for the account
of the applicable Lenders, any additional amounts of interest or fees which
would have been payable on any previous Interest Payment Date had such
4
higher Applicable Margin been in effect from the date such financial statements
were required to be delivered; (c) any change in the Applicable Margin as a
result of a change in the Leverage Ratio shall apply to all Loans for each day
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change in the
Applicable Margin; and (d) if an Event of Default exists on any Adjustment Date
or other date upon which the Applicable Margin would otherwise be adjusted
hereunder, the Applicable Margin shall in no event be reduced on such Adjustment
Date or other date from the Applicable Margin in effect immediately prior to
such Adjustment Date or other date until such Event of Default is cured or
waived.
"Arrangers": CSFB and Deutsche Bank Securities Inc.
"Asset Sale": any sale, sale-leaseback, or other disposition by the
U.S. Borrower or any of its Subsidiaries restricted by subsection 9.5 of any of
its property or assets, including the stock of any Subsidiary, except sales and
dispositions permitted by subsections 9.5(a), (b), (c), (f), (g), (j), (k), (l)
and (m).
"Assignee": as defined in subsection 12.6(c).
"Assignment and Acceptance": an assignment and acceptance
substantially in the form of Exhibit D, or such other form as shall be approved
by the Applicable Administrative Agent and reasonably acceptable to the U.S.
Borrower.
"Available Canadian Revolving Credit Commitment": as to any Canadian
Lender, at a particular time, an amount equal to (a) the amount of such Lender's
Canadian Revolving Credit Commitment at such time less (b) the sum of (i) the
aggregate unpaid principal amount at such time of all Canadian Revolving Credit
Loans made by such Lender pursuant to subsection 3.1, (ii) such Lender's
Revolving Credit Commitment Percentage of the aggregate unpaid principal amount
at such time of C$ Prime Loans and BA Loans and (iii) such Lender's Revolving
Credit Commitment Percentage of the aggregate undiscounted face amount at such
time of any Bankers' Acceptance; collectively, as to all Canadian Lenders, the
"Available Canadian Revolving Credit Commitments."
"Available Revolving Credit Commitments": the collective reference to
the Available U.S. Revolving Credit Commitments and the Available Canadian
Revolving Credit Commitments.
"Available U.S. Revolving Credit Commitment": as to any U.S. Revolving
Credit Lender, at a particular time, an amount equal to (a) the amount of such
Lender's U.S. Revolving Credit Commitment at such time less (b) the sum of (i)
the aggregate unpaid principal amount at such time of all U.S. Revolving Credit
Loans made by such Lender pursuant to subsection 3.1, (ii) such Lender's
Revolving Credit Commitment Percentage of the aggregate unpaid principal amount
at such time of all Swing Line Loans; provided that for purposes of calculating
the Available U.S. Revolving Credit Commitments pursuant to subsection 3.2 the
amount referred to in this
5
clause (ii) shall be zero, (iii) such Lender's L/C Participating Interest in the
aggregate amount available to be drawn at such time under all outstanding
Letters of Credit issued by the Issuing Lender and (iv) such Lender's U.S.
Revolving Credit Commitment Percentage of the aggregate outstanding amount of
L/C Obligations; collectively, as to all the U.S. Revolving Credit Lenders, the
"Available U.S. Revolving Credit Commitments."
"BA Loan": as defined in subsection 4.8.
"BA Discount Proceeds": in respect of any Bankers' Acceptance to be
purchased by the Canadian Lenders on any day under subsection 4.3, an amount
(rounded to the nearest whole Canadian cent, and with one-half of one Canadian
cent being rounded up) calculated on such day by dividing:
(a) the face amount of such Bankers' Acceptance; by
(b) the sum of one plus the product of:
(i) the Applicable BA Discount Rate (expressed as a decimal)
applicable to such Bankers' Acceptance; and
(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptance and the denominator of
which is 365;
with such product being rounded up or down to the fifth decimal
place and .000005 being rounded up.
"Backstop L/C": as defined in subsection 5.3.
"Bankers' Acceptance": a xxxx of exchange or a depository xxxx
governed by the Bills of Exchange Act (Canada) or the Depository Bills and Notes
Act (Canada), as applicable, denominated in C$ drawn by the Canadian Borrower
and accepted by the Canadian Lenders pursuant to subsection 4.3 and, except
where the context otherwise requires, a BA Loan made pursuant to subsection 4.8.
"Bankruptcy Code": Title I of the Bankruptcy Reform Act of 1978, as
amended and codified at Title 11 of the United States Code.
"Base Amount": as defined in subsection 9.7 hereof.
"Board": the Board of Governors of the Federal Reserve System,
together with any successor.
"Borrower Bridge Loan Agreement": that certain Bridge Loan Agreement
which may be entered into following the Closing Date by and among Holdings, the
U.S. Borrower, CSFB and Deutsche Bank AG Cayman Islands Branch, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with its terms and the terms of this Agreement.
6
"Borrower Bridge Subordinated Debt": the subordinated bridge loans,
subordinated term loans or exchange notes of the U.S. Borrower outstanding from
time to time pursuant to the Borrower Bridge Loan Agreement or the indenture
contemplated thereby.
"Borrowing Date": any Business Day specified in a notice pursuant to
(a) subsection 3.4 or 5.1 as a date on which the U.S. Borrower requests the
Swing Line Lender or the Lenders to make Loans hereunder or (b) subsection 3.5
as a date on which the U.S. Borrower requests the Issuing Lender to issue,
extend, renew or amend a Letter of Credit hereunder.
"Borrowing Date (Canada)": any Business Day (Canada) specified in a
notice pursuant to subsection 4.2 or 4.3 as a date on which the Canadian
Borrower requests the Canadian Lenders to make C$ Loans hereunder.
"Borrowing Parties": as defined in the Preamble hereto.
"Bridge Debt": collectively, the Borrower Bridge Subordinated Debt and
the Holdings Bridge Debt.
"Bridge Loan Agreements": collectively, the Borrower Bridge Loan
Agreement and the Holdings Bridge Loan Agreement.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close; provided, however, that when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Business Day (Canada)": a day (i) on which banks are open for
business in Xxxxxxx, Xxxxxxx, Xxxxxx, but excluding Saturday, Sunday and any
other day which is a legal holiday in Xxxxxxx, Xxxxxxx, Xxxxxx and (ii) that is
a Business Day.
"Calculation Date": (a) the last Business Day of each month and (b)
the date of each borrowing request with respect to a C$ Loan; provided, however,
that neither of the foregoing shall constitute a Calculation Date unless at the
time thereof (or after giving effect to any borrowing then being requested)
Canadian Loans denominated in Canadian Dollars are outstanding.
"Canadian Administrative Agent": as defined in the Preamble hereto.
"Canadian Borrower": as defined in the Preamble hereto.
"Canadian Collateral Agreement": the Canadian Collateral Agreement,
substantially in the form of Exhibit M, to be made by the Canadian Borrower and
the Canadian Subsidiaries in favor of the Canadian Administrative Agent for the
ratable benefit of the Canadian Lenders, as the same may be amended, modified or
supplemented from time to time.
7
"Canadian Dollars" or "C$": dollars in lawful currency of Canada.
"Canadian Exchange Rate": on a particular date, the rate at which
Canadian Dollars may be exchanged into Dollars, which shall be the spot rate at
which the Canadian Administrative Agent is able to obtain Dollars in exchange
for Canadian Dollars on such date.
"Canadian Guarantee": the Guarantee, substantially in the form of
Exhibit L, to be made by Holdings, the U.S. Borrower and the Domestic
Subsidiaries in favor of the Canadian Administrative Agent for the ratable
benefit of the Canadian Lenders, in respect of the obligations of the Canadian
Borrower hereunder, as the same may be amended, modified or supplemented from
time to time.
"Canadian Lenders": Lenders having Canadian Revolving Credit
Commitments or outstanding Canadian Loans. Each Canadian Lender shall at all
times be a resident of Canada for purposes of the ITA.
"Canadian Lending Office": such lending office of a Canadian Lender
(or of an Affiliate thereof) as any Canadian Lender may from time to time
specify to the Canadian Administrative Agent and the Canadian Borrower as the
office by which C$ Loans of each type are to be made and maintained.
"Canadian Loans": the collective reference to the Canadian Revolving
Credit Loans and the C$ Loans.
"Canadian Revolving Credit Commitment": as to any Lender, its
obligation, expressed in Dollars, to (i) make Canadian Revolving Credit Loans to
the U.S. Borrower pursuant to subsection 3.1, (ii) advance C$ Prime Loans to the
Canadian Borrower pursuant to subsection 4.2, (iii) purchase Bankers'
Acceptances from the Canadian Borrower pursuant to subsection 4.3 and (iv) if
applicable, advance BA Loans to the Canadian Borrower pursuant to subsection
4.8, in an aggregate amount not to exceed the amount set forth under such
Lender's name in Schedule I opposite the caption "Canadian Revolving Credit
Commitment" or in Schedule 1 to the Assignment and Acceptance by which such
Lender acquired its Canadian Revolving Credit Commitment, as the same may be
reduced from time to time pursuant to subsection 5.3 or adjusted pursuant to
subsection 12.6(c); collectively, as to all the Canadian Lenders, the "Canadian
Revolving Credit Commitments". The original aggregate principal amount of the
Canadian Revolving Credit Commitments is $20,000,000.
"Canadian Revolving Credit Loans": as defined in subsection 3.1.
"Canadian Subsidiaries": any Subsidiary of the Canadian Borrower which
is formed or organized under the federal laws of Canada or any province of
Canada.
"Canadian Subsidiary Guarantee": the Canadian Subsidiary Guarantee,
substantially in the form of Exhibit S, to be made by certain Canadian
Subsidiaries in favor of the Canadian Administrative Agent for the ratable
benefit of the Canadian Lenders, as the same may be amended, modified or
supplemented from time to time.
8
"Capital Expenditures": for any period, all amounts which would, in
accordance with GAAP, be set forth as capital expenditures (exclusive of any
amount attributable to capitalized interest) on the consolidated statement of
cash flows or other similar statement of the U.S. Borrower and its Subsidiaries
for such period but shall exclude (a) any expenditures made with the proceeds of
condemnation or eminent domain proceedings affecting real property or with
insurance proceeds and (b) any expenditures made in connection with subsection
9.6(g) or (h); provided that any Capital Expenditures financed with the proceeds
of any Indebtedness permitted hereunder (other than Indebtedness incurred
hereunder) shall be deemed to be a Capital Expenditure only in the period in
which, and by the amount which, any principal of such Indebtedness is repaid.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof having maturities of not more than six months from the date of
acquisition, (b) certificates of deposit and Eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any Lender or with any domestic (in the case of any
investments, acquisitions or holdings by Holdings, the U.S. Borrower or its
Domestic Subsidiaries) commercial bank or trust company having capital and
surplus in excess of $300,000,000, (c) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(a) and (b) entered into with any financial institution meeting the
qualifications specified in clause (b) above, (d) commercial paper having the
highest rating obtainable from S&P or Xxxxx'x and in each case maturing within
one year after date of acquisition; (e) investment funds investing 95% of their
assets in securities of the type described in clauses (a) through (d) above, (f)
readily marketable direct obligations issued by any state of the United States
or any political subdivision thereof having one of the two highest rating
categories obtainable from either S&P or Xxxxx'x and (g) indebtedness with a
rating of "A" or higher from S&P or "A2" or higher from Xxxxx'x.
"C$ Loans": the collective reference to C$ Prime Loans, Bankers'
Acceptances and BA Loans; for the purposes of this Agreement, the principal
amount of any C$ Loan constituting a Bankers' Acceptance shall be deemed to be
the undiscounted face amount of such Bankers' Acceptance; provided that for
purposes of the definitions of "Available Revolving Credit Commitments",
"Required Lenders" and "Supermajority Lenders" and for purposes of subsection
5.3, the principal amount of any C$ Loan at any time shall be the U.S. Dollar
Equivalent at such time of the principal amount of such C$ Loan.
"C$ Note": as defined in subsection 5.13(f).
9
"C$ Prime Loans": advances by the Canadian Lenders to the Canadian
Borrower denominated in Canadian Dollars that bear interest at a rate based upon
the C$ Prime Rate.
"C$ Prime Rate": on any day, the greater of (a) the annual rate of
interest determined from time to time by the Canadian Administrative Agent as
its reference rate then in effect for determining interest rates on C$
denominated commercial loans in Canada and (b) the annual rate of interest equal
to the sum of (i) the CDOR Rate and (ii) 1.00% per annum.
"CDOR Rate": for each day in any period, the annual rate of interest
that is the rate based on an average rate applicable to C$ bankers' acceptances
for a term equal to the term selected pursuant to subsection 4.3(b)(4) appearing
on the "Reuters Screen CDOR Page" (as defined in the International Swaps and
Derivatives Association, Inc. definitions, as modified and amended from time to
time) at approximately 10:00 A.M. (Toronto time), on such date, or if such date
is not a Business Day (Canada), then on the immediately preceding Business Day
(Canada); provided, however, that if such rate does not appear on the Reuters
Screen CDOR Page on such date as contemplated, then the CDOR Rate on such date
shall be the arithmetic average (as determined by the Canadian Administrative
Agent in good faith) of the respective percentage discount rates (expressed to
two decimal places and rounded upward, if necessary to the nearest 1/100th of
1%) quoted by the Schedule I Reference Banks (determined by the Canadian
Administrative Agent as of 10:00 A.M. (Toronto time) on such date) that would be
applicable to C$ bankers' acceptances for a term equal to the term selected
pursuant to subsection 4.3(b)(4) or, if such date is not a Business Day
(Canada), then on the immediately preceding Business Day (Canada).
"Certificate of Designation": the Certificate of Designation of the
redeemable, payment-in-kind preferred stock of the Company.
"Change in Law": with respect to any Lender or Issuing Lender, as the
case may be, the adoption of, or change in, any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law) or any change in
the interpretation or application thereof by any Governmental Authority having
jurisdiction over such Lender or Issuing Lender, as applicable, in each case
after the Closing Date.
"Change of Control": shall be considered to have occurred if (a) at
any time prior to an IPO by the Parent or Holdings: the Permitted Investors
shall cease to own, directly or indirectly, in the aggregate, more than 50% of
the issued and outstanding voting stock of the U.S. Borrower, (b) at any time
after an IPO by the Parent or Holdings: if any Person (other than the Permitted
Investors), whether singly or in concert with one or more Persons, shall,
directly or indirectly, have acquired, or acquire the power (i) to vote or
direct the voting of 30% or more, on a fully diluted basis, of the outstanding
common stock of the U.S. Borrower or (ii) to elect or designate for election a
majority of the Board of Directors of the U.S. Borrower by voting power,
contract or otherwise, (c) Holdings (or, following any merger or consolidation
between Holdings and the Parent effected in accordance with subsection 9.4, the
surviving entity in any such transaction)
10
shall cease to directly own, beneficially and of record, 100% of the issued and
outstanding common stock of the U.S. Borrower or (d) a Specified Change of
Control shall have occurred.
"Change of Control Offers": a collective reference to the Existing
Notes Change of Control Offer and the Preferred Stock Change of Control Offer;
individually, a "Change of Control Offer."
"Change of Control Payment Date": a collective reference to the
Existing Notes Payment Date and the Preferred Stock Payment Date, which shall be
the same date.
"Change of Control Payments": a collective reference to the Existing
Notes Payment and the Preferred Stock Payment; individually, a "Change of
Control Payment."
"Change of Control Term Loan": as defined in subsection 2.1.
"Change of Control Term Loan Commitment": as to any Lender, its
obligation to make a Change of Control Term Loan to the U.S. Borrower pursuant
to subsection 2.1 in an aggregate amount not to exceed the amount set forth
under such Lender's name in Schedule I opposite the caption "Change of Control
Term Loan Commitment" or in Schedule 1 to the Assignment and Acceptance pursuant
to which a Lender acquires its Change of Control Term Loan Commitment, as the
same may be adjusted pursuant to subsection 12.6(c); collectively, as to all the
Term Loan Lenders, the "Change of Control Term Loan Commitments." The original
aggregate principal amount of the Change of Control Term Loan Commitments is
$50,000,000.
"Change of Control Term Loan Commitment Percentage": as to any Term
Loan Lender at any time, the percentage of the aggregate Change of Control Term
Loan Commitments then constituted by such Lender's Change of Control Term Loan
Commitment.
"Change of Control Term Note": as defined in subsection 5.13(f).
"Class": when used in reference to any Revolving Credit Commitment,
refers to whether such Revolving Credit Commitment is a U.S. Revolving Credit
Commitment or a Canadian Revolving Credit Commitment.
"Closing Date": July 29, 2003.
"Closing Date Term Loan": as defined in subsection 2.1.
"Closing Date Term Loan Commitment": as to any Lender, its obligation
to make a Closing Date Term Loan to the U.S. Borrower pursuant to subsection 2.1
in an aggregate amount not to exceed the amount set forth under such Lender's
name in Schedule I opposite the caption "Closing Date Term Loan Commitment" or
in Schedule 1 to the Assignment and Acceptance pursuant to which a Lender
acquires its Closing Date Term Loan Commitment, as the same may be adjusted
pursuant to subsection 12.6(c);
11
collectively, as to all the Term Loan Lenders, the "Closing Date Term Loan
Commitments". The original aggregate principal amount of the Closing Date Term
Loan Commitments is $475,000,000.
"Closing Date Term Note": as defined in subsection 5.13(f).
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Credit Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
The Collateral under the Canadian Collateral Agreement is referred to as the
"Canadian Collateral" and the Collateral under the Collateral Agreement is
referred to as the "U.S. Collateral". The U.S. Collateral shall not include any
Canadian Collateral.
"Collateral Agreement": the Collateral Agreement, substantially in the
form of Exhibit E, to be made by Holdings, the U.S. Borrower and its Domestic
Subsidiaries from time to time parties thereto in favor of the Administrative
Agent, for the ratable benefit of the Administrative Agents and the Lenders, as
the same may be amended, modified or supplemented from time to time.
"Commercial L/C": a commercial documentary Letter of Credit under
which the Issuing Lender agrees to make payments in Dollars for the account of
the U.S. Borrower, on behalf of the U.S. Borrower or a Subsidiary of the U.S.
Borrower, in respect of obligations of the U.S. Borrower or such Subsidiary in
connection with the purchase of goods or services in the ordinary course of
business.
"Commitment": as to any Lender at any time, such Lender's Swing Line
Commitment, Term Loan Commitment and/or Revolving Credit Commitment;
collectively, as to all the Lenders, the "Commitments."
"Commitment Fee Rate": 3/4 of 1% per annum; provided, that from and
after the date on which financial statements for the Fiscal Year ended January
2, 2004 are delivered pursuant to subsection 8.1, and so long as no Event of
Default has occurred and is continuing, the Commitment Fee Rate will be
determined pursuant to the pricing grid attached hereto as Schedule II based
upon the Leverage Ratio as determined from the relevant financial statements
delivered pursuant to subsection 8.1 and the level of utilization of the
Revolving Credit Commitments.
"Commitment Percentage": as to any Lender at any time, its Term Loan
Commitment Percentage or its Revolving Credit Commitment Percentage, as the
context may require.
"Commodity Hedging Agreements": any futures contract or other similar
agreement or arrangement designed to protect the U.S. Borrower or its
Subsidiaries against fluctuations in commodities prices and not for purposes of
speculation.
12
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the U.S. Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the U.S. Borrower and
which is treated as a single employer under Section 414(b) or (c) of the Code.
"Company": as defined in the Recitals hereto.
"Confidential Information Memorandum": the Confidential Information
Memorandum of the U.S. Borrower dated July 2003.
"Consolidated Current Assets": at a particular date, all amounts
(other than cash and Cash Equivalents) which would, in conformity with GAAP, be
included under current assets on a consolidated balance sheet of the U.S.
Borrower and its Subsidiaries as at such date.
"Consolidated Current Liabilities": at a particular date, all amounts
which would, in conformity with GAAP, be included under current liabilities on a
consolidated balance sheet of the U.S. Borrower and its Subsidiaries as at such
date, excluding the current portion of long-term debt and the entire outstanding
principal amount of the Revolving Credit Loans and C$ Loans.
"Consolidated EBITDA": for any period, the Consolidated Net Income of
the U.S. Borrower and its Subsidiaries for such period, plus, without
duplication and to the extent reflected as either a charge or reduction of
revenue in the statement of such Consolidated Net Income for such period, the
sum of (a) total income tax expense, (b) interest expense, amortization or
write-off of debt discount, debt issuance, warrant and other equity issuance
costs and commissions, discounts, redemption premium and other fees and charges
associated with the Loans, letters of credit permitted hereunder, Financing
Leases (excluding any precious metals leases) or the acquisition or repayment of
any debt securities of the U.S. Borrower or its Subsidiaries permitted
hereunder, and net costs associated with Interest Rate Agreements to which the
U.S. Borrower is a party in respect of the Loans (including commitment fees and
other periodic bank charges), (c) costs of surety bonds, (d) depreciation and
amortization expense, (e) amortization of intangibles (including, but not
limited to, goodwill and costs of interest-rate caps and the cost of
non-competition agreements) and organization costs, (f) non-cash amortization of
Financing Leases, (g) franchise taxes, (h) management fees paid as contemplated
by subsection 9.11 (or, with respect to periods prior to the Closing Date, as
contemplated under the Existing Credit Agreement) and charges related to
management fees prepaid in connection with the Transactions (or, with respect to
periods prior to the Closing Date, the Original Transactions), (i) any expenses
incurred in connection with any merger, any acquisition or joint venture
permitted herein, including, without limitation, the Transactions (including any
payments of success/transition bonuses to management of the U.S. Borrower in
connection therewith), (j) any other non-cash write-downs, write-offs (including
of minority interests) and other non-cash charges or expenses, (k) any non-cash
restructuring or other type of non-cash special charge or reserve, (l) expenses
and charges related to any equity offering, (m) expenses consisting of internal
software development costs that are expensed during the period but could have
been capitalized in
13
accordance with GAAP and (n) nonrecurring litigation or claim settlement charges
and related outside counsel's fees and expenses; provided that (i) the
cumulative effect of a change in accounting principles (effected either through
cumulative effect adjustment or a retroactive application) shall be excluded,
(ii) the net income of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be excluded, (iii)
the impact of foreign currency and hedging translations and transactions shall
be excluded, (iv) all other extraordinary or non-recurring gains, losses and
charges shall be excluded, (v) up to $5,000,000 of the amount of expenditures
made in any Fiscal Year of the U.S. Borrower in respect of subsection 9.6(h)
shall be excluded and (vi) the non-cash impact of any adjustments attributable
to the application of purchase accounting to the Transactions in accordance with
Statement of Financial Accounting Standards No. 141 or other relevant GAAP
provision (e.g., adjustments to customer deposits, adjustments to inventory or
other working capital elements, etc.) shall be excluded.
"Consolidated Indebtedness": at a particular date, all Indebtedness
other than Indebtedness described in clauses (b) or (c) of the definition of
"Indebtedness" included in this subsection 1.1 of the U.S. Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP at such
date.
"Consolidated Net Income": for any period, net income of the U.S.
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP (adjusted to reflect any charge, tax or expense incurred or accrued by
Holdings as though such charge, tax or expense had been incurred by the U.S.
Borrower, to the extent that the U.S. Borrower has made any payment to or for
the account of Holdings in respect thereof (excluding any portion of any such
payment returned to the U.S. Borrower pursuant to the proviso to paragraph (k)
of subsection 9.11)); provided that: (i) the net income (but not loss) of any
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the U.S. Borrower or a wholly owned Subsidiary and
(ii) the net income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that net income is prohibited or not permitted at the date of determination.
"Contingent Obligation": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (b) to advance
or supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation
14
shall be deemed to be an amount equal to the stated or determinable amount
(based on the maximum reasonably anticipated net liability in respect thereof as
determined by the U.S. Borrower in good faith) of the primary obligation or
portion thereof in respect of which such Contingent Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated net liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by the U.S. Borrower in good faith.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of the property owned by it
is bound.
"Credit Documents": the collective reference to this Agreement, the
Notes, the Security Agreements, the Mortgages and the Guarantees.
"Credit Parties": the collective reference to (i) the U.S. Borrower
and each of its direct and indirect Subsidiaries other than any Foreign
Subsidiaries of the U.S. Borrower (or any other United States Person) and (ii)
the Canadian Borrower and the Canadian Subsidiaries.
"CSFB": as defined in the Preamble hereto.
"Default": any of the events specified in Section 10, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DLJMB": DLJ Merchant Banking III, Inc., a Delaware corporation.
"Dollars" and "$": refers to lawful money of the United States.
"Domestic Subsidiary": as to any Person, any Subsidiary of such Person
other than a Foreign Subsidiary of such Person.
"Draft": a xxxxx xxxx of exchange or depository xxxx, within the
meaning of the Bills of Exchange Act (Canada) or the Depository Bills and Notes
Act (Canada), as applicable, drawn by the Canadian Borrower on a Canadian
Lender, denominated in C$ and bearing such distinguishing letters and numbers as
such Canadian Lender may determine, but which at such time, except as otherwise
provided herein, has not been completed or accepted by such Canadian Lender.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority or requirements of law (including,
without limitation, common law) regulating or imposing liability or standards of
conduct concerning environmental or public health protection matters, including,
without limitation, Hazardous Materials, as now or may at any time hereafter be
in effect.
"Environmental Permits": any and all permits, licenses, registrations,
notifications, exemptions and any other authorizations required under any
Environmental Law.
15
"Equity Contribution": as defined in subsection 7.1(c).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period by reference to the
British Bankers' Association Interest Settlement Rates (as set forth by any
service selected by the Administrative Agent that has been nominated by the
British Bankers' Association as an authorized information vendor for the purpose
of displaying such rates) as of 11:00 A.M., London time, two Business Days prior
to the beginning of such Interest Period. In the event that an interest rate is
not ascertainable pursuant to the foregoing provisions of this definition, the
"Eurodollar Base Rate" for purposes of this definition shall be determined by
reference to such other comparable publicly available service for displaying
Eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period in the
interbank Eurodollar market where its Eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Eurodollar Lending Office": as to any Lender the office of such
Lender which shall be making or maintaining Eurodollar Loans.
"Eurodollar Loans": Loans at such time as they are made and/or being
maintained at a rate of interest based upon a Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula:
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 10;
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
16
"Excess Cash Flow": for any Fiscal Year of the U.S. Borrower,
commencing with the first complete Fiscal Year ending after the Closing Date,
the excess of (a) Consolidated EBITDA for such Fiscal Year over (b) the sum,
without duplication, of (i) the aggregate amount actually paid by the U.S.
Borrower and its Subsidiaries in cash during such Fiscal Year on account of
capital expenditures or acquisitions (other than capital expenditures made with
the proceeds of eminent domain or condemnation proceedings to the extent such
proceeds are not included in the determination of Consolidated EBITDA for such
Fiscal Year), (ii) the aggregate amount of payments of principal in respect of
any Indebtedness during such Fiscal Year (other than any such payments of
principal pursuant to subsections 5.4(b)(i), (ii), (iii) and (iv) to the extent
such amounts are not included in Consolidated EBITDA, or any such payments of
principal in respect of any revolving credit facility to the extent that there
is not an equivalent reduction in such facility), (iii) increases in non-cash
working capital (calculated as the increase, if any, in Consolidated Current
Assets of the U.S. Borrower and its Subsidiaries minus Consolidated Current
Liabilities of the U.S. Borrower and its Subsidiaries from the beginning to the
end of such Fiscal Year), (iv) cash interest expense (including fees paid in
connection with letters of credit and surety bonds and commitment fees and other
periodic bank charges) of the U.S. Borrower and its Subsidiaries, (v) the amount
of taxes actually paid in cash by the U.S. Borrower and its Subsidiaries for
such Fiscal Year either during such Fiscal Year or within a normal payment
period thereof, (vi) to the extent added to Consolidated Net Income of the U.S.
Borrower and its Subsidiaries in calculating Consolidated EBITDA for such Fiscal
Year, the net cash cost of Interest Rate Agreements, franchise taxes and
management fees, (vii) the net income of any Subsidiary shall be excluded to the
extent that such amount is accounted for under the equity method to the extent
cash dividends are not paid or the declaration or payment of dividends is not
permitted without prior governmental approval (which has not been obtained) and
(viii) the amount of cash actually paid by the U.S. Borrower and its
Subsidiaries in connection with clauses (b) (without duplication), (i), (l), (m)
and (n), and clauses (iii) and (iv) of the proviso in the definition of
Consolidated EBITDA; and (ix) the amount of any cash actually paid in connection
with reserves established in accordance with GAAP; provided that to the extent
any amount of cash is actually paid by the U.S. Borrower or its Subsidiaries in
connection with clause (n) in the definition of Consolidated EBITDA in any
Fiscal Year in which the U.S. Borrower does not have Excess Cash Flow, such
amount, to the extent it was not applied to reduce Consolidated EBITDA in
determining the existence of Excess Cash Flow in the year such amount was paid,
may be carried forward to subsequent Fiscal Years of the U.S. Borrower and
applied once to reduce the amount or any Excess Cash Flow for any such Fiscal
Year.
"Existing Credit Agreement": that certain Credit Agreement dated as of
May 10, 2000, by and among the Company, the lenders and agents from time to time
party thereto and JPMorgan Chase Bank, as administrative agent, as amended and
restated as of July 31, 2002, and as of December 13, 2002, as in effect
immediately prior to the Closing Date.
"Existing Notes": the Company's 12-3/4% senior subordinated notes due
2010 issued pursuant to the Existing Notes Indenture.
17
"Existing Notes Change of Control Offer": the offer by the U.S.
Borrower to repurchase the Existing Notes in accordance with the terms of the
Existing Notes Indenture as a result of the consummation of the Merger.
"Existing Notes Indenture": that certain Indenture dated as of May 10,
2000, between the Company and The Bank of New York, as amended and in effect on
the Closing Date.
"Existing Notes Payment": the payment required to be made by the U.S.
Borrower to those holders of the Existing Notes who accept the Existing Notes
Change of Control Offer in accordance with the terms thereof.
"Existing Notes Payment Date": a date occurring during the period from
September 5, 2003 to September 12, 2003 (or such later date as may be agreed to
by the Administrative Agent in its sole discretion).
"Fee Property": as defined in subsection 6.13.
"Financing Lease": (a) any lease of property, real or personal, the
obligations under which are capitalized on a consolidated balance sheet of the
U.S. Borrower and its consolidated Subsidiaries in accordance with GAAP and (b)
any other such lease to the extent that the then present value of any rental
commitment thereunder should, in accordance with GAAP, be capitalized on a
balance sheet of the lessee.
"Fiscal Quarter": with respect to Holdings, the U.S. Borrower or any
Subsidiary, the 12 or 13 week, as applicable, fiscal quarter of such Person
ending on the Saturday closest to March 31, June 30, September 30 or December
31, as applicable.
"Fiscal Year": with respect to Holdings, the U.S. Borrower or any
Subsidiary, the 52 or 53 week, as applicable, fiscal year of such Person ending
on the Saturday closest to December 31.
"Foreign Subsidiary": as to any Person, any Subsidiary of such Person
which is not organized under the laws of the United States or any state thereof
or the District of Columbia.
"GAAP": generally accepted accounting principles in the United States
in effect from time to time.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantees": the collective reference to the Holdings Guarantee,
Subsidiary Guarantee, the Canadian Guarantee, the Canadian Subsidiary Guarantee
and any guarantee which may from time to time be executed and delivered by a
Subsidiary or a Canadian Subsidiary pursuant to subsection 8.9.
18
"Hazardous Materials": any hazardous materials, hazardous wastes,
hazardous pesticides or hazardous or toxic substances, and any other material
that may give rise to liability under any Environmental Law, including, without
limitation, asbestos, petroleum, any other petroleum products (including
gasoline, crude oil or any fraction thereof), polychlorinated biphenyls and
urea-formaldehyde insulation.
"Highest Lawful Rate": as defined in subsection 12.12.
"Holdings": as defined in the Preamble hereto.
"Holdings Bridge Debt": the bridge loans, term loans or exchange notes
of Holdings outstanding from time to time pursuant to the Holdings Bridge Loan
Agreement or the indenture contemplated thereby.
"Holdings Bridge Loan Agreement": that certain Bridge Loan Agreement
which may be entered into following the Closing Date by and among Holdings, CSFB
and Deutsche Bank AG Cayman Islands Branch, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms and the terms of this Agreement.
"Holdings Capital Stock": as defined in paragraph (d) of subsection
9.11.
"Holdings Guarantee": the Holdings Guarantee, substantially in the
form of Exhibit Q, to be made by Holdings in favor of the Administrative Agent
for the ratable benefit of the Administrative Agents and the Lenders, as the
same may be amended, modified or supplemented from time to time.
"Indebtedness": of a Person, at a particular date (excluding the
impact of any adjustments attributable to the application of purchase accounting
in accordance with SFAS No. 141 or other relevant GAAP provision), (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) the undrawn face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder and unpaid reimbursement obligations with respect
thereto, (c) all liabilities (other than Lease Obligations and liabilities in
connection with reserves established in accordance with GAAP) secured by any
Lien on any property owned by such Person, even though such Person has not
assumed or become liable for the payment thereof (provided that if such Person
has not assumed or otherwise become liable for such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the lesser of the
amount of such Indebtedness and the fair market value of the property to which
such Lien relates as determined in good faith by such Person), (d) Financing
Leases, (e) all indebtedness of such Person arising under acceptance facilities,
but excluding (i) trade and other accounts payable and accrued expenses payable
in the ordinary course of business which are not overdue for a period of more
than 90 days or, if overdue for more than 90 days, as to which a dispute exists
and adequate reserves in conformity with GAAP have been established on the books
of such Person, (ii) letters of credit supporting the purchase of goods in the
ordinary course of business and expiring no more than six months from the date
of issuance, (iii) precious
19
metal leases, whether capital or operating and (iv) obligations in respect of
Interest Rate Agreements and Commodity Hedging Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Installment Payment Date": as defined in subsection 5.4(c).
"Interest Coverage Ratio": on the last day of any Fiscal Quarter of
the U.S. Borrower, the ratio of (a) Consolidated EBITDA for the period of twelve
months ending on such day to (b) cash interest expense (excluding (i) fees
payable on account of letters of credit, (ii) to the extent included in interest
expense in accordance with GAAP, net administrative costs associated with
Interest Rate Agreements to which the U.S. Borrower is a party in respect of the
Loans and other periodic bank charges and amortization of debt discount or
premium (including discount of liabilities and reserves established under SFAS
141), (iii) interest expense in respect of costs of debt issuance and interest
expense on customer deposits for such period net of interest income, (iv)
interest in respect of seasonal borrowings of the Borrowing Parties occurring in
the third Fiscal Quarter of the U.S. Borrower which seasonal borrowings shall be
calculated as the lesser of (x) $85,000,000 and (y) the amount of Revolving
Credit Loans and C$ Loans outstanding on the date of such calculation, at the
applicable interest rate for the relevant period and (v) to the extent included
in interest expense in accordance with GAAP, interest payable to the United
States government in connection with the settlement of appeals relating to tax
claims pending with the Internal Revenue Service on the Closing Date), in each
case, for or during such period on a consolidated basis for the U.S. Borrower
and its Subsidiaries in accordance with GAAP. For clarification, cash interest
expense does not include accretion of interest expense, amortization of debt
discount or premium, or amortization of deferred financing costs, in each case
recorded in accordance with GAAP.
"Interest Payment Date": (a) as to Alternate Base Rate Loans or C$
Prime Loans, the last Business Day or Business Day (Canada), respectively, of
each Fiscal Quarter of the U.S. Borrower or the Canadian Borrower, respectively,
commencing on the first such day to occur after any Alternate Base Rate Loans or
C$ Prime Loans are made or any Eurodollar Loans are converted to Alternate Base
Rate Loans, (b) as to any Eurodollar Loan in respect of which the U.S. Borrower
has selected an Interest Period of one, two or three months, the last day of
such Interest Period and (c) as to any Eurodollar Loan in respect of which the
U.S. Borrower has selected a longer Interest Period than the periods described
in clause (b), the last day of each three calendar month interval during such
Interest Period and, in addition, the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case may be, the
Borrowing Date or conversion date with respect to such Eurodollar Loan
20
and ending one, two, three or six months thereafter (or, if and when
agreed to by all the relevant Lenders, nine or twelve months
thereafter) as selected by the U.S. Borrower in its notice of
borrowing as provided in subsection 5.1 or its notice of conversion as
provided in subsection 5.2; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter (or, if and when
agreed to by all the relevant Lenders, nine or twelve months
thereafter) as selected by the U.S. Borrower by irrevocable notice to
the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect to such
Eurodollar Loan;
provided that the foregoing provisions relating to Interest Periods are subject
to the following:
(A) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be
to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(B) any Interest Period that would otherwise extend beyond (i) in
the case of an Interest Period for a Term Loan, the final Installment
Payment Date shall end on such Installment Payment Date or, if such
Installment Payment Date shall not be a Business Day, on the next
preceding Business Day; and (ii) in the case of any Interest Period
for a Revolving Credit Loan, the Revolving Credit Termination Date
shall end on the Revolving Credit Termination Date, or if the
Revolving Credit Termination Date shall not be a Business Day, on the
next preceding Business Day;
(C) if the U.S. Borrower shall fail to give notice as provided
above in clause (b), it shall be deemed to have selected a conversion
of a Eurodollar Loan into an Alternate Base Rate Loan (which
conversion shall occur automatically and without need for compliance
with the conditions for conversion set forth in subsection 5.2);
(D) any Interest Period that begins on the last day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(E) the U.S. Borrower shall select Interest Periods so as not to
require a prepayment (to the extent practicable) or a scheduled
payment of a Eurodollar Loan during an Interest Period for such
Eurodollar Loan.
21
"Interest Rate Agreement": any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement.
"Investment Grade Securities": (i) securities issued or directly and
fully guaranteed or insured by the Unites States government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB- or higher by S&P or Baa3 by Moody's or
the equivalent of such rating by such rating organization, or if no rating of
S&P's or Moody's then exists, the equivalent of such rating by any other
nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the U.S. Borrower
and its Subsidiaries and (iii) investments in any fund that invests exclusively
in investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
"Investor Group": the collective reference to DLJMB, certain
affiliated entities and other investors arranged by DLJMB, and members of senior
management of Holdings or the U.S. Borrower.
"IPO": as to any Person, any sale by such Person through a public
offering of its common (or other voting) stock pursuant to an effective
registration statement (other than a registration statement on Form X-0, X-0 or
any successor or similar form) filed under the Securities Act of 1933, as
amended.
"Issuing Lender": collectively, CSFB and any other Lender having U.S.
Revolving Credit Commitments selected by the U.S. Borrower and reasonably
acceptable to the Administrative Agent, which other Lender has agreed in its
sole discretion to so act, and any of their respective Affiliates, as issuer of
the Letters of Credit; with respect to any Letter of Credit, the term "Issuing
Lender" shall mean the Issuing Lender with respect to such Letter of Credit.
"ITA": the Income Tax Act (Canada), as amended, and any successor
thereto, and any regulations promulgated thereunder.
"L/C Application": as defined in subsection 3.5(a).
"L/C Obligations": the obligations of the U.S. Borrower to reimburse
the Issuing Lender for any payments made by the Issuing Lender under any Letter
of Credit that have not been reimbursed by the U.S. Borrower pursuant to
subsection 3.8(a).
"L/C Participating Interest": an undivided participating interest in
the face amount of each issued and outstanding Letter of Credit and the L/C
Application relating thereto.
"L/C Participation Certificate": a certificate in substantially the
form of Exhibit G.
"Lease Obligations": of the U.S. Borrower and its Subsidiaries, as of
the date of any determination thereof, the rental commitments of the U.S.
Borrower and its
22
Subsidiaries determined on a consolidated basis in accordance with GAAP, if any,
under leases for real and/or personal property (net of rental commitments from
sub-leases thereof), excluding however, obligations under Financing Leases.
"Leased Properties": as defined in subsection 6.13.
"Lenders": the collective reference to (a) the U.S. Lenders and
Canadian Lenders listed on Schedule I (other than any such Person that has
ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b)
any Person that has become a party hereto pursuant to an Assignment and
Acceptance.
"Letters of Credit": the collective reference to the Commercial L/Cs,
the Standby L/Cs, individually, a "Letter of Credit."
"Leverage Ratio": as defined in subsection 9.9(a); provided that for
purposes of calculating the Leverage Ratio, the unencumbered (other than Liens
permitted pursuant to subsection 9.2 (other than subsections 9.2(i) (only to the
extent such Lien is in respect of cash and Cash Equivalents specifically
securing Indebtedness in respect of one or more Commercial L/Cs and not all
Indebtedness under this Agreement generally) and 9.2(l)) cash and Cash
Equivalents balances of the U.S. Borrower and its Subsidiaries on such date
shall be deducted from the amount of Consolidated Indebtedness on such date.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing, except for the filing of financing statements in
connection with Lease Obligations incurred by the U.S. Borrower or its
Subsidiaries to the extent that such financing statements relate to the property
subject to such Lease Obligations).
"Loans": the collective reference to the U.S. Loans and the C$ Loans;
individually, a "Loan."
"Management Agreement": the collective reference to the letter
agreement dated as of July 29, 2003, between the U.S. Borrower and DLJMB,
pursuant to which DLJMB has agreed to provide certain monitoring and other
services on behalf of the U.S. Borrower, and the letter agreement dated as of
July 29, 2003, between the U.S. Borrower and Credit Suisse First Boston LLC
("CSFBL"), pursuant to which CSFBL has agreed to provide certain financial
advisory services to the U.S. Borrower, in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Material Adverse Effect": (a) a material adverse effect on the
business, assets, properties, condition (financial or otherwise) or results of
operations of the U.S.
23
Borrower and its Subsidiaries, taken as a whole, (b) a material impairment of
the ability of the U.S. Borrower or any other Credit Party to perform any of its
obligations under any Credit Document to which it is or will be a party or (c) a
material impairment of the rights of or benefits available to the Lenders under
any Credit Document.
"Merger": as defined in the Recitals hereto.
"Merger Agreement": as defined in the Recitals hereto.
"Modified Maturity Date": as defined in the definition of "Term Loan
Maturity Date".
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgaged Properties": any real property owned in fee and covered by
a Mortgage delivered pursuant to subsection 8.9(d) or 8.9(g).
"Mortgages": each of the mortgages and deeds of trust made by any
Credit Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Lenders, in a form reasonably acceptable to the
Administrative Agent and the U.S. Borrower, as the same may be amended,
supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds received by Holdings, the
U.S. Borrower or any Subsidiary (or solely with respect to clause (a)(ii) below,
the Parent) in respect of:
(a) (i) any issuance or borrowing of any debt securities or loans
by Holdings, the U.S. Borrower or any of its Subsidiaries other than
debt or loans permitted to be incurred or borrowed pursuant to
subsection 9.1 or (ii) any issuance by the Parent, Holdings, the U.S.
Borrower or any of its Subsidiaries of Capital Stock (excluding any
such issuance to any member of the Investor Group or any Affiliate
thereof or any such issuance to employees of the Parent, Holdings, the
U.S. Borrower or any of its Subsidiaries);
(b) any Asset Sale, excluding (i) any net proceeds received upon
any condemnation or exercise of rights of eminent domain and (ii) any
proceeds of insurance received upon any casualty or loss, in each case
to the extent the same shall be deemed not to constitute Net Proceeds
pursuant to the proviso to subsection 9.5(d);
(c) any cash received in respect of substantially like-kind
exchanges of property to the extent provided in the proviso to
subsection 9.5(e); and
24
(d) any cash payments received in respect of promissory notes
delivered to the U.S. Borrower or any of its Subsidiaries in respect
of an Asset Sale;
in each case net of (without duplication) (A) an amount used to repay any
Indebtedness (other than the Loans) secured by a Lien on any assets of the U.S.
Borrower or any of its Subsidiaries that are collateral for any such debt
securities or loans that are sold or otherwise disposed of in connection with
such Asset Sale, (B) the reasonable expenses (including legal fees and brokers'
and underwriters' commissions, lenders fees or credit enhancement fees, in any
case, paid to third parties or, to the extent permitted hereby, Affiliates)
incurred in effecting such issuance or sale and (C) any taxes reasonably
attributable to such sale and reasonably estimated by the U.S. Borrower or its
Subsidiaries to be actually payable.
"Non-Consenting Lender": as defined in subsection 5.14.
"Non-Funding Lender": as defined in subsection 5.9(c).
"Notes": the collective reference to the Swing Line Note, the C$ Note,
the Revolving Credit Notes and the Term Loan Notes; each of the Notes, a "Note."
"Original Transactions": "Transactions", as defined in the Existing
Credit Agreement.
"Parent": as defined in the Recitals hereto.
"Parent Capital Stock": the Capital Stock of the Parent.
"Participants": as defined in subsection 12.6(b).
"Participating Lender": any U.S. Revolving Credit Lender (other than
the Issuing Lender) with respect to its L/C Participating Interest in each
Letter of Credit.
"Payment Sharing Notice": a written notice from the U.S. Borrower or
the Canadian Borrower or any Lender informing the Administrative Agent or the
Canadian Administrative Agent, as the case may be, that an Event of Default has
occurred and is continuing and directing the Administrative Agent or the
Canadian Administrative Agent, as the case may be, to allocate payments
thereafter received from or on behalf of any Borrowing Party in accordance with
the provisions of subsection 5.9.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
"Permitted Investors": the collective reference to: (a) DLJMB or any
of its Affiliates or Subsidiaries, (b) any member of the Investor Group on the
Closing Date (and, to the extent approved by the Administrative Agent (such
approval not to be unreasonably withheld or delayed; it being understood and
agreed that the approval of the Administrative Agent shall not be required with
respect to any Person which is a general
25
partner or limited partner of, or a stockholder of or investor in, DLJ Merchant
Banking III, L.P., DLJ Offshore Partners III, C.V., DLJ Offshore Partners XXX-0,
X.X., XXX Xxxxxxxx Xxxxxxxx XXX-0, X.X., XXX MB Partners III GmbH & Co. KG,
Millennium Partners II, L.P. or MBP III Plan Investors, L.P.), other Persons who
become members of the Investor Group on or prior to December 31, 2003), (c) any
member of the senior management of Holdings or the U.S. Borrower on the Closing
Date or (d) any entity a majority of the equity ownership interests of which is
owned by a Person described in clause (c) or (d) above.
"Permitted Liens": Liens permitted to exist under subsection 9.2.
"Permitted Notes": as defined in subsection 9.1(f).
"Permitted Senior Notes": as defined in subsection 9.1(f).
"Permitted Subordinated Debt": the collective reference to the
Existing Notes, the Borrower Bridge Subordinated Debt, the Permitted
Subordinated Notes and other subordinated Indebtedness of the U.S. Borrower and
its Subsidiaries incurred pursuant to clause (iii) of paragraph (h), or
paragraphs (i) or (n), of subsection 9.1.
"Permitted Subordinated Notes": as defined in subsection 9.1(f).
"Person": an individual, partnership, corporation, business trust,
joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Photography Division": businesses relating to selling portraits and
activity photos.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the U.S. Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PPSA": the Personal Property Security Act (Manitoba).
"Preferred Stock": the preferred stock of the Company described in the
Certificate of Designation.
"Preferred Stock Change of Control Offer": the offer by the U.S.
Borrower to redeem the Preferred Stock in accordance with the Certificate of
Designation as a result of the consummation of the Merger.
"Preferred Stock Payment": the payment required to be made by the U.S.
Borrower to those holders of Preferred Stock who accept the Preferred Stock
Change of Control Offer in accordance with the terms thereof.
26
"Preferred Stock Payment Date": a date occurring during the period
from September 5, 2003 to September 12, 2003 (or such later date as may be
agreed to by the Administrative Agent in its sole discretion).
"Refunded Swing Line Loans": as defined in subsection 3.4(b).
"Refunding Bankers' Acceptance": as defined in subsection 4.3(d).
"Register": as defined in subsection 12.6(d).
"Related Fund": shall mean, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization as such term is used in Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice is waived under
subpart B of PBGC Reg. (S) 4042.
"Required Lenders": at a particular time, the holders of more than 50%
of the sum of (i) the aggregate unpaid principal amount of the Term Loans, if
any, and (ii) the Revolving Credit Commitments or, if the Revolving Credit
Commitments are terminated, the aggregate unpaid principal amount of (w) the
Revolving Credit Loans, (x) the C$ Loans, (y) participations in Swing Line Loans
and (z) the L/C Obligations (plus the aggregate amount available to be drawn at
such time under all outstanding Letters of Credit). The Term Loans and the
Revolving Credit Commitments of any Non-Funding Lender shall be disregarded in
determining Required Lenders at any time.
"Requirement of Law": as to any Person, the Articles or Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, order, or determination of an
arbitrator or a court or other Governmental Authority, in each case, applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reset Date": as defined in subsection 1.5.
"Responsible Officer": with respect to any Person, the president,
treasurer, chief executive officer, the chief operating officer, the chief
financial officer, assistant treasurer, corporate controller or any vice
president of such Person.
"Revolving Credit Commitment Percentage": (a) as to any U.S. Lender at
any time, the percentage of the aggregate U.S. Revolving Credit Commitments then
constituted by such Lender's U.S. Revolving Credit Commitment, and (b) as to any
Canadian Lender at any time, the percentage of the aggregate Canadian Revolving
Credit Commitments then constituted by such Lender's Canadian Revolving Credit
27
Commitment, all as set forth in Schedule I (as the same may be adjusted pursuant
to any Assignment and Acceptance that becomes effective after the Closing Date).
"Revolving Credit Commitments": the collective reference to the U.S.
Revolving Credit Commitments and the Canadian Revolving Credit Commitments.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to but not including the Revolving Credit Termination Date.
"Revolving Credit Lender": any Lender with a Revolving Credit
Commitment.
"Revolving Credit Loans": as defined in subsection 3.1(a).
"Revolving Credit Note": as defined in subsection 5.13(f).
"Revolving Credit Termination Date": the earlier of (a) July 29, 2008
and (b) such other earlier date as the Revolving Credit Commitments shall
terminate hereunder.
"Sale-Leaseback Transactions": as defined in subsection 9.17.
"Schedule I Bank": a bank that is a Canadian chartered bank listed on
Schedule I under the Bank Act (Canada).
"Schedule II Bank": a bank that is a Canadian chartered bank listed on
Schedule II under the Bank Act (Canada).
"Schedule III Bank": a bank listed on Schedule III under the Bank Act
(Canada).
"Schedule I Reference Banks": Bank of Nova Scotia and such other
Schedule I Banks as are agreed to from time to time by the Canadian Borrower and
the Canadian Administrative Agent, each acting reasonably; provided that there
shall be no more than three Schedule I Reference Banks at any one time.
"Schedule II/III Reference Banks": each of Credit Suisse First Boston
Toronto Branch, Deutsche Bank AG, Canada Branch and such other Schedule II Banks
or Schedule III Banks as are agreed to from time to time by the Canadian
Borrower and the Canadian Administrative Agent, each acting reasonably; provided
that there shall be no more than three Schedule II/III Reference Banks at any
one time.
"Security Agreements": the collective reference to the Collateral
Agreement, the Canadian Collateral Agreement and any security agreement which
may from time to time be executed and delivered by a Subsidiary of the U.S.
Borrower pursuant to subsection 8.9.
28
"Security Documents": the collective reference to the Security
Agreements and the Mortgages.
"Senior Leverage Ratio": as of any date, the Leverage Ratio,
excluding, for purposes of determining the Senior Leverage Ratio only, the
Permitted Subordinated Debt from Consolidated Indebtedness to the extent
otherwise included therein at such date.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard and Poor's Ratings Services, a division of XxXxxx-Xxxx
Companies, Inc.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (d) such Person is not engaged in business or
a transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital. With
respect to contingent liabilities, such liabilities shall be computed at the
amount which, in light of all the facts and circumstances existing at the time,
represent the amount which can reasonably be expected to become an actual or
matured liability.
"Specified Change of Control": a "Change of Control" (other than as a
result of the Merger) as defined from time to time in the Existing Notes
Indenture, so long as the Existing Notes Indenture exists and more than
$15,000,000 in aggregate principal amount of the Existing Notes remain
outstanding thereunder.
"Specified Sale-Leaseback Transactions": a Sale-Leaseback Transaction
in respect of any of the Fee Properties listed on Schedule 1.1(a).
"Standby L/C": an irrevocable letter of credit under which the Issuing
Lender agrees to make payments in Dollars for the account of the U.S. Borrower,
on behalf of the U.S. Borrower or any Subsidiary in respect of obligations of
the U.S. Borrower or such Subsidiary incurred pursuant to contracts made or
performances undertaken or to be undertaken or like matters relating to
contracts to which the U.S. Borrower or such Subsidiary is or proposes to become
a party in the ordinary course of the U.S. Borrower's or such Subsidiary's
business, including, without limiting the foregoing, for insurance purposes or
in respect of advance payments or as bid or performance bonds or for any other
purpose for which a standby letter of credit might customarily be issued.
"Subsection 5.11(e)(2) Certificate": as defined in subsection 5.11(e).
29
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, by such Person or by one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. A Subsidiary shall be deemed wholly-owned by a Person who owns
directly or indirectly all of the voting shares of stock or other interests of
such Subsidiary having voting power under ordinary circumstances to vote for
directors or other managers of such corporation, partnership or other entity,
except for (i) directors' qualifying shares, (ii) shares owned by multiple
shareholders to comply with local laws and (iii) in the case of Foreign
Subsidiaries, shares owned by employees. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the U.S. Borrower; provided that any joint
venture or Person in which an investment is existing on the Closing Date or is
made pursuant to subsection 9.6(h) shall, so long as such investment is
maintained in reliance on such subsection, not be a "Subsidiary" of the U.S.
Borrower for any purpose of this Agreement.
"Subsidiary Guarantee": the Domestic Subsidiary Guarantee,
substantially in the form of Exhibit F, to be made by certain Domestic
Subsidiaries of the U.S. Borrower in favor of the Administrative Agent for the
ratable benefit of the Administrative Agents and the Lenders, as the same may be
amended, modified or supplemented from time to time.
"Subsidiary Guarantors": the collective reference to the Domestic
Subsidiaries from time to time party to the Subsidiary Guarantee.
"Supermajority Lenders": at a particular time, the holders of at least
66-2/3% of the sum of (i) the aggregate unpaid principal amount of the Term
Loans, if any, and (ii) the Revolving Credit Commitments or, if the Revolving
Credit Commitments are terminated, the aggregate unpaid principal amount of (w)
the Revolving Credit Loans, (x) the C$ Loans, (y) participations in Swing Line
Loans and (z) the L/C Obligations (plus the aggregate amount available to be
drawn at such time under all outstanding Letters of Credit). The Term Loans and
the Revolving Credit Commitments of any Non-Funding Lender shall be disregarded
in determining Supermajority Lenders at any time.
"Swing Line Commitment": the Swing Line Lender's obligation to make
Swing Line Loans pursuant to subsection 3.4.
"Swing Line Lender": CSFB, in its capacity as lender of the Swing Line
Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit H.
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"Swing Line Loans": as defined in subsection 3.4(a).
"Swing Line Note": as defined in subsection 5.13(f).
"Term Loan" and "Term Loans": as defined in subsection 2.1.
"Term Loan Commitments": collectively, the Closing Date Term Loan
Commitments and the Change of Control Term Loan Commitments; individually, a
"Term Loan Commitment."
"Term Loan Commitment Percentage": as to any Lender at any time, the
percentage of the aggregate Term Loan Commitments then constituted by such
Lender's Term Loan Commitment (or, after the Term Loans are made, the percentage
of the aggregate outstanding principal amount of all Term Loans then constituted
by the aggregate outstanding principal amount of such Lender's Term Loans).
"Term Loan Lender": each Lender that has a Term Loan Commitment or is
the holder of a Term Loan.
"Term Loan Maturity Date": July 29, 2010; provided that if more than
$10,000,000 in aggregate principal amount of the Existing Notes remain
outstanding on the fifth anniversary of the Closing Date, then the "Term Loan
Maturity Date" shall instead be July 31, 2009 (the "Modified Maturity Date")
and, notwithstanding the amortization schedule set forth in subsection 5.4(c),
the then outstanding principal balance of the Term Loans shall be due and
payable on the Modified Maturity Date.
"Term Loan Note": a Closing Date Term Note or a Change of Control Term
Note, as the context shall require, collectively, the "Term Notes."
"Transactions": the collective reference to the Merger, the Change of
Control Offers, the incurrence of Indebtedness, if any, under the Bridge Loan
Agreements, the Equity Contribution, the repayment of certain of the Company's
existing indebtedness, including, without limitation, all amounts outstanding
under the Existing Credit Agreement, and the borrowing of the Loans on the
Closing Date and, if applicable, the Change of Control Payment Date under this
Agreement.
"Transferee": as defined in subsection 12.6(g).
"Type": as to any Loan, its nature as an Alternate Base Rate Loan or
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
and any subsequent revisions thereof.
"United States": the United States of America.
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"United States Person": any Person organized under the laws of the
United States or any state thereof or the District of Columbia.
"U.S. Borrower": as defined in the Preamble hereto.
"U.S. Dollar Equivalent": on any date of determination, with respect
to any amount in Canadian Dollars, the equivalent in Dollars of such amount,
determined by the Administrative Agent (through consultation with the Canadian
Administrative Agent) using the Canadian Exchange Rate on such date.
"U.S. Lenders": the collective reference to the Term Loan Lenders and
the U.S. Revolving Credit Lenders.
"U.S. Loans": the collective reference to the Swing Line Loans, the
Term Loans and the Revolving Credit Loans.
"U.S. Revolving Credit Commitment": as to any Lender, its obligations
to (i) make U.S. Revolving Credit Loans to the U.S. Borrower pursuant to
subsection 3.1, (ii) participate in Swing Line Loans and (iii) purchase its L/C
Participating Interest in any Letter of Credit, in an aggregate amount not to
exceed the amount set forth under such Lender's name in Schedule I opposite the
caption "U.S. Revolving Credit Commitment" or in Schedule 1 to the Assignment
and Acceptance by which such Lender acquired its U.S. Revolving Credit
Commitment, as the same may be reduced from time to time pursuant to subsection
5.3, increased from time to time in accordance with subsection 3.15 or adjusted
pursuant to subsection 12.6(c); collectively, as to all the U.S. Revolving
Credit Lenders, the "U.S. Revolving Credit Commitments". The original aggregate
principal amount of the U.S. Revolving Credit Commitments is $130,000,000.
"U.S. Revolving Credit Lenders": any Lender with a U.S. Revolving
Credit Commitment.
"U.S. Revolving Credit Loans": as defined in subsection 3.1.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit Document and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to Holdings, the U.S. Borrower and its Subsidiaries not defined
in subsection 1.1 and accounting terms partly defined in subsection 1.1 to the
extent not defined, shall have the respective meanings given to them under GAAP.
To the extent there are any changes in GAAP from the date of this Agreement, the
financial covenants set forth herein at the option of the U.S. Borrower will
either (i) continue to be determined in accordance with GAAP in effect on the
Closing Date, as applicable, or (ii) be adjusted or reset to reflect such
changes in GAAP, such adjustments or resets to be mutually agreed to by the U.S.
Borrower and the Administrative Agent.
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(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
1.3 Designated Senior Debt. The Loans and other obligations of the
Credit Parties hereunder and under the other Credit Documents shall constitute
"Designated Senior Debt," and this Agreement shall be deemed to be the "New
Credit Facility," for all purposes of the Existing Notes Indenture.
1.4 Several Obligations; Power of Attorney. (a) Subject to the U.S.
Borrower's obligations under the Canadian Guarantee, the obligations of the
respective Borrowing Parties to pay the principal of and interest on each Loan
are several and not joint, and the Canadian Borrower and its Subsidiaries shall
not be liable for the payment obligations of the U.S. Borrower hereunder.
(b) The Canadian Borrower hereby appoints the U.S. Borrower and each
of its officers to be its attorneys in fact (its "Attorneys") and in its name
and on its behalf and as its act and deed or otherwise to sign all documents and
carry out all such acts as are necessary or appropriate in connection with
executing any borrowing request, any Credit Documents or any other instruments,
certificates or documents delivered thereunder or in connection therewith
(collectively, the "Documents"). This Power of Attorney shall be valid for the
duration of the term of this Credit Agreement. The Canadian Borrower hereby
ratifies any and all acts which any of its Attorneys shall do in order to
execute on its behalf, or in connection with, the Documents mentioned herein.
1.5 Exchange Rate Calculations. On each Calculation Date, the
Administrative Agent shall (a) determine (through consultation with the Canadian
Administrative Agent) the Canadian Exchange Rate as of such Calculation Date and
(b) give notice thereof to the U.S. Borrowers and to each Lender, in each case
if any such Person shall have requested such information. The Canadian Exchange
Rate so determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (each, a "Reset Date") and shall remain
effective until the next succeeding Reset Date, and shall for all purposes of
this Agreement (other than any other provision expressly requiring the use of a
current Canadian Exchange Rate) be the Canadian Exchange Rate employed in
converting amounts between Dollars and Canadian Dollars.
SECTION 2. TERM LOANS
2.1 Term Loans. Subject to the terms and conditions hereof, (i) each
Term Loan Lender severally agrees to make a term loan in Dollars (individually,
a "Closing Date Term Loan"; and collectively, the "Closing Date Term Loans") to
the U.S. Borrower on the Closing Date, in an aggregate principal amount equal to
such Lender's
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Closing Date Term Loan Commitment and (ii) each Term Loan Lender severally
agrees to make a term loan in Dollars (individually, a "Change of Control Term
Loan"; and collectively, the "Change of Control Term Loans"; together with the
Closing Date Term Loans, the "Term Loans") to the U.S. Borrower on the Change of
Control Payment Date, in an aggregate principal amount equal to the lesser of
(x) such Term Loan Lender's Change of Control Term Loan Commitment Percentage of
the Existing Notes Payment and (y) such Term Loan Lender's Change of Control
Term Loan Commitment. Unless terminated earlier in accordance with the
provisions of this Agreement, any undrawn portion of the Change of Control Term
Loan Commitments shall automatically terminate at 5:00 P.M., New York City time,
on the Change of Control Payment Date.
2.2 Repayment of Term Loans. The U.S. Borrower shall repay the Term
Loans as provided in subsection 5.4.
2.3 Use of Proceeds. The proceeds of the Closing Date Term Loans shall
be used to repay existing Indebtedness (including amounts outstanding under the
Existing Credit Agreement), to finance the Transactions and to pay fees,
expenses and financing costs in connection therewith. The proceeds of the Change
of Control Term Loans shall be used to finance the Existing Notes Payment on the
Existing Notes Payment Date and to pay fees and expenses incurred in connection
therewith.
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
3.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, (i) each U.S. Revolving Credit Lender severally agrees to the
extent of its Available U.S. Revolving Credit Commitment to extend credit to the
U.S. Borrower from time to time on any Borrowing Date during the Revolving
Credit Commitment Period (A) by purchasing an L/C Participating Interest in each
Letter of Credit issued by the Issuing Lender and (B) by making revolving loans
in Dollars ("U.S. Revolving Credit Loans") to the U.S. Borrower and (ii) each
Canadian Lender severally agrees to the extent of its Canadian Revolving Credit
Commitment if, at the time of the requested borrowing, the U.S. Revolving Credit
Commitments have been fully utilized, to extend credit to the U.S. Borrower from
time to time on any Borrowing Date during the Revolving Credit Commitment Period
by making revolving loans in Dollars to the U.S. Borrower through an Affiliate
of such Lender ("Canadian Revolving Credit Loans", and, collectively with the
U.S. Revolving Credit Loans, the "Revolving Credit Loans"). Notwithstanding the
above, in no event shall any Revolving Credit Loan be made, or Letter of Credit
be issued, if the aggregate amount of the Revolving Credit Loans to be made and
Letters of Credit to be issued would, after giving effect to the use of
proceeds, if any, thereof, exceed the aggregate Available Revolving Credit
Commitments nor shall any Letter of Credit be issued if after giving effect
thereto the sum of the undrawn amount of all outstanding Letters of Credit and
the amount of all L/C Obligations would exceed $25,000,000.
(b) During the Revolving Credit Commitment Period (subject to the
provisions of subsection 3.5(b) with respect to the expiry date of any Letter of
Credit),
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the U.S. Borrower may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof, and/or by having the Issuing
Lender issue Letters of Credit, having such Letters of Credit expire undrawn
upon or if drawn upon, reimbursing the Issuing Lender for such drawing, and
having the Issuing Lender issue new Letters of Credit.
(c) Each borrowing of Revolving Credit Loans pursuant to the Revolving
Credit Commitments shall be in an aggregate principal amount of the lesser of
(i) $500,000 or a whole multiple of $100,000 in excess thereof in the case of
Alternate Base Rate Loans, and $1,000,000 or a whole multiple of $500,000 in
excess thereof in the case of Eurodollar Loans, and (ii) the Available Revolving
Credit Commitments, except that any borrowing of Revolving Credit Loans to be
used solely to pay a like amount of Swing Line Loans may be in the aggregate
principal amount of such Swing Line Loans.
3.2 Commitment Fee. The U.S. Borrower agrees to pay to the
Administrative Agent for the account of each U.S. Revolving Credit Lender (other
than any Non-Funding Lender), and the Canadian Borrower agrees to pay to the
Canadian Administrative Agent for the account of each Canadian Lender (other
than any Non-Funding Lender), a commitment fee from and including the Closing
Date to and including the Revolving Credit Termination Date computed at the
Commitment Fee Rate on the average daily amount of the Available U.S. Revolving
Credit Commitment and the Available Canadian Revolving Credit Commitment, as
applicable, of such Lender during the period for which payment is made (whether
or not the Borrowing Parties shall have satisfied the applicable conditions to
borrow or for the issuance of a Letter of Credit set forth in Section 7). Such
commitment fees shall be payable quarterly in arrears on the last Business Day
of each Fiscal Quarter of the U.S. Borrower and on the Revolving Credit
Termination Date, commencing on the first such date to occur following the
Closing Date.
3.3 Proceeds of Revolving Credit Loans. The U.S. Borrower shall use
the proceeds of Revolving Credit Loans (a) to repay existing Indebtedness
(including Indebtedness in respect of revolving loans under the Existing Credit
Agreement on the Closing Date) and (b) for working capital and other general
corporate purposes.
3.4 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees, so long as the Administrative Agent has
not received notice that an Event of Default has occurred and is continuing, to
make swing line loans (individually, a "Swing Line Loan"; collectively, the
"Swing Line Loans") to the U.S. Borrower from time to time during the Revolving
Credit Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed $10,000,000; provided that no Swing Line Loan may be
made if the aggregate principal amount of the Swing Line Loans to be made would
exceed the aggregate Available Revolving Credit Commitments at such time.
Amounts borrowed by the U.S. Borrower under this subsection 3.4 may be repaid
and, through but excluding the Revolving Credit Termination Date, reborrowed.
All Swing Line Loans shall be made as Alternate Base
35
Rate Loans and shall not be entitled to be converted into Eurodollar Loans. The
U.S. Borrower shall give the Swing Line Lender irrevocable notice (which notice
must be received by the Swing Line Lender prior to 2:00 P.M., New York City
time) on the requested Borrowing Date specifying the amount of each requested
Swing Line Loan, which shall be in an aggregate minimum amount of $250,000 or a
whole multiple of $100,000 in excess thereof and the wire transfer instructions
for the account of the U.S. Borrower to which the proceeds of such Swing Line
Loan should be transferred. The Swing Line Lender shall promptly make each Swing
Line Loan by wire transfer to the account specified by the U.S. Borrower in the
related notice of borrowing. The proceeds of Swing Line Loans may be used solely
for the purposes referred to in subsection 3.3.
(b) The Swing Line Lender at any time in its sole and absolute
discretion may request, through the Administrative Agent, each U.S. Revolving
Credit Lender, including the Swing Line Lender, to make a U.S. Revolving Credit
Loan in an amount equal to such Lender's U.S. Revolving Credit Commitment
Percentage of the amount of the Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given (which shall be a Business
Day). Unless any of the events described in paragraph (f) of Section 10 shall
have occurred (in which event the procedures of paragraph (c) of this subsection
3.4 shall apply) each such Lender shall make the proceeds of its U.S. Revolving
Credit Loan available to the Administrative Agent, for the account of the Swing
Line Lender, at the office of the Administrative Agent specified in subsection
12.2 (or such other location as the Administrative Agent may direct) prior to
12:00 noon (New York City time) in funds immediately available on the Business
Day next succeeding the date such notice is given. The proceeds of such U.S.
Revolving Credit Loans shall be immediately applied to repay the Refunded Swing
Line Loans.
(c) If prior to the making of a U.S. Revolving Credit Loan pursuant to
paragraph (b) of this subsection 3.4 one of the events described in paragraph
(f) of Section 10 shall have occurred, each U.S. Revolving Credit Lender will,
on the date such Loan was to have been made, purchase an undivided participating
interest in the Refunded Swing Line Loan in an amount equal to its U.S.
Revolving Credit Commitment Percentage of such Refunded Swing Line Loan. Each
such Lender will promptly transfer to the Administrative Agent, for the account
of the Swing Line Lender, in immediately available funds, the amount of its
participation and, upon its receipt thereof, the Swing Line Lender will deliver
to such Lender a Swing Line Loan Participation Certificate dated the date of
receipt of such funds and in such amount.
(d) Whenever, at any time after the Administrative Agent has received,
for the account of the Swing Line Lender, from any U.S. Revolving Credit Lender
such Lender's participating interest in a Refunded Swing Line Loan, the
Administrative Agent receives any payment on account thereof, the Administrative
Agent will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded) in like funds as received; provided that in the event that such payment
received by the Administrative Agent is required to be returned, such Lender
will return to the Administrative Agent any portion
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thereof previously distributed by the Administrative Agent to it in like funds
as such payment is required to be returned by the Administrative Agent.
(e) The obligation of each U.S. Revolving Credit Lender to purchase
participating interests pursuant to subsection 3.4(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the U.S. Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of an Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the U.S. Borrower; (iv) any breach of this Agreement by the U.S.
Borrower or any other Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(f) In each case in which a Lender has made a Revolving Credit Loan
with respect to a Swing Line Loan pursuant to subsection 3.4(b) or has acquired
a participating interest in a Refunded Swing Line Loan pursuant to subsection
3.4(c), the Administrative Agent shall, on behalf of the U.S. Borrower, record,
in the applicable Register maintained pursuant to subsection 12.6(d), such
Lender's name, address, and amounts of entitlement to payments of principal and
interest with respect to such Revolving Credit Loan or participating interest.
3.5 Issuance of Letters of Credit. (a) The U.S. Borrower may from time
to time request the Issuing Lender to issue a Standby L/C or a Commercial L/C by
delivering to the Issuing Lender at its address specified in subsection 12.2 (or
such other location as the Issuing Lender may direct) a letter of credit
application in the Issuing Lender's then customary form, with such changes
thereto as may be reasonably requested by the U.S. Borrower to conform such
application to the applicable provisions of this Agreement and the other Credit
Documents (the "L/C Application") completed to the satisfaction of the Issuing
Lender, together with the proposed form of such Letter of Credit (which shall
comply with the applicable requirements of paragraph (b) below) and such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request; provided that if the Issuing Lender informs the U.S.
Borrower that it is for any reason unable to open such Letter of Credit, the
U.S. Borrower may request any Lender to open such Letter of Credit upon the same
terms offered to the Issuing Lender and each reference to the Issuing Lender for
purposes of subsections 3.5 through 3.14, 7.1 and 7.2 shall be deemed to be a
reference to such Issuing Lender. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any L/C
Application or other document submitted by the U.S. Borrower to, or entered into
by the U.S. Borrower with, the Issuing Lender relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.
(b) Each Standby L/C and Commercial L/C issued hereunder shall be
issued for the account of the U.S. Borrower and shall, among other things, (i)
be denominated in Dollars and be in such form requested by the U.S. Borrower as
shall be acceptable to the Issuing Lender in its reasonable discretion and (ii)
have an expiry date occurring not later than (x) in the case of the Letters of
Credit issued on the Closing Date in favor of JPMorgan Chase Bank, as the
issuing lender under the Existing Credit
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Agreement, the latest expiry date of the letters of credit outstanding under the
0Existing Credit Agreement on the Closing Date and (y) with regard to all other
Letters of Credit, 365 days after the date of issuance of such Letter of Credit
(or 366 days in the case of a Letter of Credit that will expire in a leap year)
and, in the case of Standby L/Cs, may be automatically renewed on its expiry
date for an additional period of up to 365 days, but in no case shall any Letter
of Credit have an expiry date occurring later than the fifth Business Day prior
to the Revolving Credit Termination Date. Each L/C Application and each Letter
of Credit shall be subject to the International Standby Practices (ISP 98) of
the International Chamber of Commerce or the Uniform Customs and, to the extent
not inconsistent therewith, the laws of the State of New York.
3.6 Participating Interests. Effective in the case of each Standby L/C
and Commercial L/C (if applicable) as of the date of the opening thereof, the
Issuing Lender agrees to allot and does allot, to itself and each other U.S.
Revolving Credit Lender, and each such Lender severally and irrevocably agrees
to take and does take in such Letter of Credit and the related L/C Application
(if applicable), an L/C Participating Interest in a percentage equal to such
Lender's U.S. Revolving Credit Commitment Percentage. In each case in which an
Issuing Lender has allotted to another Lender an L/C Participating Interest,
such Issuing Lender shall maintain a register and record therein the amounts of
such other Lender's entitlement to payments of principal and interest with
respect to such L/C Participating Interest.
3.7 Procedure for Opening Letters of Credit. The Issuing Lender will
promptly notify the Administrative Agent, who will promptly notify each U.S.
Revolving Credit Lender, of any L/C Application received by the Issuing Lender
from the U.S. Borrower and of the opening of any Letter of Credit in respect
thereof as provided below. Upon receipt of any L/C Application from the U.S.
Borrower, the Issuing Lender will process such L/C Application, and the other
certificates, documents and other papers delivered to the Issuing Lender in
connection therewith, in accordance with its customary procedures and, subject
to the terms and conditions hereof, shall promptly (and within three Business
Days after its receipt of such L/C Application and the other documents, papers
and information referred to above unless, in the circumstances, a longer period
is reasonably required) open such Letter of Credit by issuing the original of
such Letter of Credit to the beneficiary thereof and by furnishing a copy
thereof to the U.S. Borrower and the Administrative Agent; provided that no
Letter of Credit shall be issued if the last sentence of subsection 3.1(a) would
be violated thereby (and, to confirm that this proviso would not be violated
thereby, the Issuing Lender will notify the Administrative Agent prior to
issuing any Letter of Credit).
3.8 Payments in Respect of Letters of Credit. (a) The U.S. Borrower
agrees (i) to reimburse the Issuing Lender for any payment made by the Issuing
Lender under any Letter of Credit issued for the account of the U.S. Borrower on
the same Business Day that the U.S. Borrower shall have received notice from the
Issuing Lender that any such payment has been made, or, if the U.S. Borrower
shall have received such notice later than 11:00 A.M., New York City time, on
any Business Day, not later than 4:00 P.M., New York City time, on the
immediately following Business Day and (ii) to pay interest on any unreimbursed
portion of any such payment from the date of such
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payment until reimbursement in full thereof at a rate per annum equal to (A) on
or prior to the date which is one Business Day after the day on which the U.S.
Borrower is required to reimburse the Issuing Lender for such payment in
accordance with clause (i) , the Alternate Base Rate plus the Applicable Margin
for the Revolving Credit Loans and (B) thereafter, the Alternate Base Rate plus
the Applicable Margin for the Revolving Credit Loans plus 2%.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor in accordance with
paragraph (a) of this subsection 3.8, the Issuing Lender will promptly notify
the Administrative Agent, who will promptly notify each other U.S. Revolving
Credit Lender. Forthwith upon its receipt of any such notice, each such other
Lender will transfer to Administrative Agent, for the account of the Issuing
Lender, in immediately available funds, an amount equal to such other Lender's
pro rata share (based on its U.S. Revolving Credit Commitment) of the L/C
Obligation arising from such unreimbursed payment. Promptly, upon its receipt
from the Administrative Agent, on behalf of such other Lender of such amount,
the Issuing Lender will complete, execute and deliver to such other Lender an
L/C Participation Certificate dated the date of such receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a payment
under any Letter of Credit and has received from any other U.S. Revolving Credit
Lender such other Lender's pro rata share of the L/C Obligation arising
therefrom, the Issuing Lender receives (directly or through the Administrative
Agent) any reimbursement on account of such L/C Obligation or any payment of
interest on account thereof, the Issuing Lender will promptly distribute to the
Administrative Agent, for the account of such other Lender, such other Lender's
pro rata share thereof in like funds as received; provided that in the event
that the receipt by the Issuing Lender of such reimbursement or such payment of
interest (as the case may be) is required to be returned, such other Lender will
return to the Administrative Agent, for the account of the Issuing Lender, any
portion thereof previously distributed by the Administrative Agent to it in like
funds as such reimbursement or payment is required to be returned by the Issuing
Lender.
3.9 Letter of Credit Fees. (a) In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby
L/Cs or Commercial L/Cs (other than standard issuance, amendment and negotiation
fees, and the fronting fee referred to below), the U.S. Borrower agrees to pay
the Administrative Agent, for the account of the Issuing Lender and the
Participating Lenders, with respect to each Standby L/C or Commercial L/C issued
for the account of the U.S. Borrower, a Standby L/C or Commercial L/C fee, as
the case may be, equal to the Applicable Margin for Revolving Credit Loans which
are Eurodollar Loans per annum on the daily average amount available to be drawn
under each Standby L/C in the case of a Standby L/C and on the maximum face
amount of each Commercial L/C in the case of a Commercial L/C, in either case,
payable, in arrears, on the last Business Day of each Fiscal Quarter of the U.S.
Borrower. The Administrative Agent will disburse any Standby L/C or Commercial
L/C fees received pursuant to this subsection 3.9(a) to the respective
Participating Lenders promptly following the receipt of any such fees.
Notwithstanding the foregoing,
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the U.S. Borrower agrees to pay standard issuance, amendment and negotiation
fees, and a fronting fee in an amount to be agreed between the U.S. Borrower and
the Issuing Lender, to the Issuing Lender for its own account.
(b) For purposes of any payment of fees required pursuant to this
subsection 3.9, the Administrative Agent agrees to provide to the U.S. Borrower
a statement of any such fees to be so paid; provided that the failure by the
Administrative Agent to provide the U.S. Borrower with any such invoice shall
not relieve the U.S. Borrower of its obligation to pay such fees.
3.10 Letter of Credit Reserves. (a) If any Change in Law shall either
(i) impose, modify, deem or make applicable any reserve, special deposit,
assessment or similar requirement against letters of credit issued by the
Issuing Lender or (ii) impose on the Issuing Lender any other condition
regarding this Agreement (with respect to Letters of Credit) or any Letter of
Credit, and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost of the Issuing Lender of issuing or maintaining
any Letter of Credit in an amount deemed by the Issuing Lender to be material
(which increase in cost shall be the result of the Issuing Lender's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, from time to time following notice by the Issuing Lender to the U.S.
Borrower of such Change in Law, within 15 days after demand by the Issuing
Lender, the U.S. Borrower shall pay to the Issuing Lender such additional
amounts which shall be sufficient to compensate the Issuing Lender for such
increased cost, together with interest on each such amount from the date payment
was required until payment in full thereof at a rate per annum equal to the rate
applicable to Alternate Base Rate Loans pursuant to subsection 5.5(b).
(b) In the event that any Change in Law with respect to the Issuing
Lender shall, in the opinion of the Issuing Lender, require that any obligation
under any Letter of Credit be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
the Issuing Lender or any corporation controlling the Issuing Lender, and such
Change in Law shall have the effect of reducing the rate of return on the
Issuing Lender's or such corporation's capital, as the case may be, as a
consequence of the Issuing Lender's obligations under such Letter of Credit to a
level below that which the Issuing Lender or such corporation, as the case may
be, could have achieved but for such Change in Law (taking into account the
Issuing Lender's or such corporation's policies, as the case may be, with
respect to capital adequacy) by an amount deemed by the Issuing Lender to be
material, then from time to time following notice by the Issuing Lender to the
U.S. Borrower of such Change in Law, within 15 days after demand by the Issuing
Lender, the U.S. Borrower shall pay to the Issuing Lender such additional amount
or amounts as will compensate the Issuing Lender or such corporation, as the
case may be, for such reduction. The Issuing Lender agrees that, upon the
occurrence of any event giving rise to the operation of paragraph (a) or (b) of
this subsection 3.10 with respect to the Issuing Lender, it will, if requested
by the U.S. Borrower and to the extent permitted by law or by the relevant
Governmental Authority, endeavor in good faith to avoid or minimize the increase
in costs or reduction in payments resulting from such event; provided that such
avoidance or minimization can be made in such a manner that the Issuing Lender,
in its sole determination, suffers no
40
economic, legal or regulatory disadvantage. The U.S. Borrower shall not be
required to make any payments to the Issuing Lender for any additional amounts
pursuant to paragraph (a) or (b) of this subsection 3.10 unless the Issuing
Lender has given written notice to the U.S. Borrower of its intent to request
such payments prior to or within 60 days after the date on which the Issuing
Lender became entitled to claim such amounts. A certificate, in reasonable
detail setting forth the calculation of the amounts involved, submitted by the
Issuing Lender to the U.S. Borrower concurrently with any such demand by the
Issuing Lender, shall be conclusive, absent manifest error, as to the amount
thereof.
(c) The U.S. Borrower and each Participating Lender agree that the
provisions of the foregoing paragraphs (a) and (b) shall apply equally to each
Participating Lender in respect of its L/C Participating Interest in such Letter
of Credit, as if the references in such paragraphs and provisions referred to,
where applicable, such Participating Lender or, in the case of paragraph (b),
any corporation controlling such Participating Lender.
3.11 Further Assurances. The U.S. Borrower hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of Letters of Credit hereunder.
3.12 Obligations Absolute. The payment obligations of the U.S.
Borrower under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other right
which Holdings, the U.S. Borrower or any of its Subsidiaries may have at
any time against any beneficiary, or any transferee, of any Letter of
Credit (or any Persons for whom any such beneficiary or any such transferee
may be acting), the Issuing Lender, the Administrative Agent or any Lender,
or any other Person, whether in connection with this Agreement, any Credit
Document, the transactions contemplated herein, or any unrelated
transaction;
(ii) any statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent or invalid or any
statement therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or certificate or other document which does
not comply with the terms of such Letter of Credit or is insufficient in
any respect, except where such payment constitutes gross negligence or
willful misconduct on the part of the Issuing Lender as determined in the
final judgment of a court of competent jurisdiction; or
41
(iv) any other circumstances or happening whatsoever, whether or
not similar to any of the foregoing, except for any such circumstances or
happening constituting gross negligence or willful misconduct on the part
of the Issuing Lender as determined in the final judgment of a court of
competent jurisdiction.
3.13 Assignments. No Participating Lender's participation in any
Letter of Credit or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Participating Lender's Revolving Credit Commitment in accordance with
subsection 12.6(c)) without the prior written consent of the Issuing Lender,
which consent will not be unreasonably withheld. Such consent may be given or
withheld without the consent or agreement of any other Participating Lender.
Notwithstanding the foregoing, a Participating Lender may subparticipate its L/C
Participating Interest without obtaining the prior written consent of the
Issuing Lender.
3.14 Participations. The obligation of each U.S. Revolving Credit
Lender to purchase participating interests pursuant to subsection 3.6 shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Issuing Lender,
the U.S. Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of an Event of Default; (iii) any adverse change in
the condition (financial or otherwise) of the U.S. Borrower; (iv) any breach of
this Agreement by the U.S. Borrower or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
3.15 Increase in Revolving Credit Commitments. (a) So long as no Event
of Default then exists or would result therefrom, the U.S. Borrower shall have
the right at any time and from time to time and upon at least 10 Business Days'
prior written notice to the Administrative Agent (which shall promptly notify
each of the U.S. Revolving Credit Lenders), to request that one or more Lenders
(and/or one or more other Persons which will become Lenders as provided below)
provide Additional U.S. Revolving Credit Commitments and, subject to the
applicable terms and conditions contained in this Agreement, make U.S. Revolving
Credit Loans pursuant thereto, it being understood and agreed, however, that (i)
no Lender shall be obligated to provide an Additional U.S. Revolving Credit
Commitment as a result of any such request by the U.S. Borrower, (ii) until such
time, if any, as such Lender has agreed to provide an Additional U.S. Revolving
Credit Commitment and has executed and delivered to the Administrative Agent an
Additional U.S. Revolving Credit Commitment Agreement in respect thereof as
provided in subsection 3.15(b) and such Additional U.S. Revolving Credit
Commitment Agreement has become effective, such Lender shall not be obligated to
fund any Revolving Credit Loans in excess of its Revolving Credit Commitment as
in effect prior to giving effect to such Additional U.S. Revolving Credit
Commitment provided pursuant to this subsection 3.15, (iii) the aggregate amount
of all Additional U.S. Revolving Credit Commitments permitted to be provided
pursuant to this subsection 3.15 shall not exceed $25,000,000, (iv) the fees
payable to any Lender (including, in the circumstances
42
contemplated by clause (v) below, any Person who will become a Lender) providing
an Additional U.S. Revolving Credit Commitment shall be as set forth in the
relevant Additional Revolving Credit Commitment Agreement, (v) if, after the
U.S. Borrower has requested the then existing U.S. Revolving Credit Lenders
(other than Non-Funding Lenders) to provide Additional U.S. Revolving Credit
Commitments pursuant to this subsection 3.15 on the terms to be applicable
thereto, the U.S. Borrower has not received Additional U.S. Revolving Credit
Commitments in an aggregate amount equal to that amount of the Additional U.S.
Revolving Credit Commitments which the U.S. Borrower desires to obtain pursuant
to such request (as set forth in the notice provided by the U.S. Borrower to the
Administrative Agent as provided above), then the U.S. Borrower may request
Additional U.S. Revolving Credit Commitments from other Persons in an aggregate
amount equal to such deficiency on terms which are no more favorable to such
other Persons in any respect than the terms offered to the U.S. Revolving Credit
Lenders, (vi) any Lender (or, in the circumstances contemplated by clause (v)
above, other Person that will become a Lender) shall be subject to the prior
written approval of the Administrative Agent (such approval not to be
unreasonably withheld or delayed) and (vii) all actions taken by the U.S.
Borrower pursuant to this subsection 3.15(a) shall be done in coordination with
the Administrative Agent.
(b) At the time of any provision of Additional U.S. Revolving Credit
Commitments pursuant to this subsection 3.15, (i) the U.S. Borrower, the
Administrative Agent and each U.S. Revolving Credit Lender or other Person
(each, an "Additional U.S. Revolving Credit Lender") which agrees to provide an
Additional U.S. Revolving Credit Commitment shall execute and deliver to the
Administrative Agent an Additional U.S. Revolving Credit Commitment Agreement
(with the effectiveness of such Additional U.S. Revolving Credit Lender's
Additional U.S. Revolving Credit Commitment to occur upon delivery of such
Additional U.S. Revolving Credit Commitment Agreement to the Administrative
Agent, the payment of any fees required in connection therewith and the
satisfaction of the other conditions in this subsection 3.15(b) to the
reasonable satisfaction of the Administrative Agent) and (ii) the U.S. Borrower
shall, in coordination with the Administrative Agent, repay outstanding U.S.
Revolving Credit Loans of certain of the U.S. Revolving Credit Lenders, and,
subject to the satisfaction of the conditions precedent set forth in subsection
7.2, borrow additional U.S. Revolving Credit Loans from certain other U.S.
Revolving Credit Lenders, in each case so that all of the U.S. Revolving Credit
Lenders participate in each outstanding borrowing of U.S. Revolving Credit Loans
pro rata on the basis of their respective U.S. Revolving Credit Commitments
(after giving effect to any increase in the U.S. Revolving Credit Commitments
pursuant to this subsection 3.15) and with the U.S. Borrower being obligated to
pay to the respective U.S. Revolving Credit Lenders the costs of the type
referred to in subsection 5.12 in connection with any such repayment and/or
borrowing. The Administrative Agent shall promptly notify each U.S. Revolving
Credit Lender as to the occurrence of each Additional U.S. Revolving Credit
Commitment Date, and (x) on each such date, the U.S. Revolving Credit
Commitments under, and for all purposes of, this Agreement shall be increased by
the aggregate amount of such Additional U.S. Revolving Credit Commitments, and
(y) on each such date Schedule I shall be deemed modified to reflect the revised
U.S. Revolving Credit Commitments of the affected Lenders.
43
SECTION 4. AMOUNT AND TERMS OF THE CANADIAN DOLLAR LOAN SUB-FACILITY
4.1 The Canadian Dollar Loan Commitment. Subject to the terms and
conditions hereof, each Canadian Lender severally agrees to the extent of its
Available Canadian Revolving Credit Commitment to make revolving credit loans
(which shall be C$ Prime Loans) to, and, at the option of the Canadian Borrower,
to accept and purchase Bankers' Acceptances from, the Canadian Borrower from
time to time during the Revolving Credit Commitment Period. During the Revolving
Credit Commitment Period, the Canadian Borrower may use the commitment for C$
Prime Loans and Bankers' Acceptances provided for in this Section by borrowing,
prepaying or repaying the C$ Prime Loans or Bankers' Acceptances, in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
4.2 Procedure for C$ Prime Loan Borrowing. The Canadian Borrower may
borrow C$ Prime Loans during the Revolving Credit Commitment Period on any
Business Day (Canada), provided that the Canadian Borrower shall give the
Canadian Administrative Agent irrevocable written or telephonic notice (in the
case of telephonic notice, to be promptly confirmed in writing) (which notice
must be received by the Canadian Administrative Agent prior to 12:00 noon,
Toronto time, one Business Day (Canada) prior to the requested Borrowing Date
(Canada)), specifying (a) the amount to be borrowed, (b) the number and location
of the account to which funds are to be disbursed and (c) the requested
Borrowing Date (Canada). Each borrowing of C$ Prime Loans shall be in an amount
equal to C$500,000 or a whole multiple of C$100,000 in excess thereof. Not later
than 11:00 A.M., Toronto time, on the Borrowing Date (Canada) specified in such
notice, each Canadian Lender shall make available to the Canadian Administrative
Agent at the office of the Canadian Administrative Agent specified in subsection
12.2 (or at such other location as the Canadian Administrative Agent may direct)
an amount in immediately available funds equal in amount to such Lender's
Revolving Credit Commitment Percentage of the amount of the C$ Prime Loan to be
made. C$ Prime Loan proceeds received by the Canadian Administrative Agent
hereunder shall promptly be made available to the Canadian Borrower by the
Canadian Administrative Agent's making a wire transfer to the account of the
Canadian Borrower as specified by the Canadian Borrower in the notice of
borrowing with the aggregate amount actually received by the Canadian
Administrative Agent from the Canadian Lenders and in like funds as received by
the Canadian Administrative Agent.
4.3 Bankers' Acceptances.
(a) The Canadian Borrower may issue Bankers' Acceptances denominated
in C$ for, at the Canadian Borrower's option, acceptance and purchase by the
Canadian Lenders, in accordance with the provisions of this subsection 4.3.
(b) Procedures.
(1) Notices. The Canadian Borrower shall notify the Canadian
Administrative Agent by irrevocable written or telephonic notice (in the case of
44
telephonic notice, to be promptly confirmed in writing) by 12:00 noon, Toronto
time, two Business Days (Canada) prior to the date of the relevant borrowing in
respect of any borrowing by way of Bankers' Acceptances, specifying (a) the
amount to be borrowed, (b) the number and location of the account to which funds
are to be disbursed and (c) the requested Borrowing Date (Canada). Promptly
following receipt of a notice of borrowing by way of Bankers' Acceptances (or of
the continuation of Bankers' Acceptances by way of Refunding Bankers'
Acceptances pursuant to subsection 4.3(d) or the conversion of Bankers'
Acceptances pursuant to subsection 4.4, as the case may be), the Canadian
Administrative Agent shall so advise the Canadian Lenders and shall advise each
Canadian Lender of the aggregate face amount of the Bankers' Acceptances to be
accepted by it and the applicable term thereof (which shall be identical for all
Canadian Lenders).
(2) Minimum Borrowing Amount. Each borrowing by way of Bankers'
Acceptances shall be in a minimum aggregate face amount of C$1,000,000 or a
whole multiple of C$100,000 in excess thereof.
(3) Face Amounts. The face amount of each Bankers' Acceptance
shall be C$100,000 or any whole multiple thereof. The aggregate face amount of
each Banker's Acceptance to be accepted by a Canadian Lender shall be in an
integral multiple of C$100,000, and such face amount shall be in an amount equal
to such Lender's Revolving Credit Commitment Percentage of such borrowing by way
of Bankers' Acceptances; provided that the Canadian Administrative Agent may, in
its sole discretion, increase or reduce any Canadian Lender's portion of such
Bankers' Acceptance to the nearest C$100,000.
(4) Term. Bankers' Acceptances shall be issued and shall mature
on a Business Day (Canada). Each Bankers' Acceptance shall have a term of 30,
60, 90 or 180 days, shall mature on or before the Revolving Credit Termination
Date and shall be in form and substance reasonably satisfactory to the Canadian
Lenders.
(5) Bankers' Acceptances in Blank. To facilitate the acceptance
of Bankers' Acceptances under this Agreement, the Canadian Borrower shall, from
time to time as required, provide to each Canadian Lender Drafts duly executed
and endorsed in blank by the Canadian Borrower in quantities sufficient for such
Canadian Lender to fulfill its obligations hereunder. In addition, the Canadian
Borrower hereby appoints each Canadian Lender as its attorney-in-fact with
respect to Bankers' Acceptances for which the Canadian Borrower has provided a
Bankers' Acceptance notice through the Canadian Administrative Agent:
(i) to complete and sign on behalf of the Canadian Borrower,
either manually or by facsimile or mechanical signature, the Drafts to
create the Bankers' Acceptances;
(ii) after the acceptance thereof by such Canadian Lender, to
endorse on behalf of the Canadian Borrower, either manually or by facsimile
or mechanical signature, such Bankers' Acceptance in favor of the
applicable
45
purchaser or endorsee thereof including, in such Canadian Lender's
discretion, such Canadian Lender or a clearing house (as defined by the
Depository Bills and Notes Act (Canada)), if applicable;
(iii) to deliver such Bankers' Acceptances to such purchaser or
to deposit such Bankers' Acceptances with such clearing house, if
applicable; and
(iv) to comply with the procedures and requirements established
from time to time by such Canadian Lender or such clearing house, if
applicable, in respect of the delivery, transfer and collection of bankers'
acceptances and depository bills.
The Canadian Borrower recognizes and agrees that all Bankers' Acceptances
signed, endorsed, delivered or deposited on its behalf by any Canadian
Lender shall bind the Canadian Borrower as fully and effectually as if
signed in the handwriting of and duly issued, delivered or deposited by the
proper signing officer of the Canadian Borrower. Each Canadian Lender is
hereby authorized to accept such Drafts or issue such Bankers' Acceptances
endorsed in blank in such face amounts as may be determined by the
applicable Canadian Lender in accordance with the terms of this Agreement,
provided that the aggregate amount thereof is less than or equal to the
aggregate amount of Bankers' Acceptances required to be accepted by such
Canadian Lender. No Canadian Lender shall be responsible or liable for its
failure to accept a Bankers' Acceptance if the cause of such failure is, in
whole or in part, due to the failure of the Canadian Borrower to provide
duly executed and endorsed Drafts to such Canadian Lender on a timely
basis, nor shall any Canadian Lender be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any such
instrument except loss or improper use arising by reason of the gross
negligence or willful misconduct of such Canadian Lender, its officers,
employees, agents or representatives as determined in the final judgment of
a court of competent jurisdiction. Each Canadian Lender shall exercise such
care in the custody and safekeeping of Drafts as it would exercise in the
custody and safekeeping of similar property owned by it. Each Canadian
Lender will, upon the request of the Canadian Borrower, promptly advise the
Canadian Borrower of the number and designation, if any, of Drafts then
held by it for the Canadian Borrower. Each Canadian Lender shall maintain a
record with respect to Drafts and Bankers' Acceptances (i) received by it
from the Canadian Borrower in blank hereunder, (ii) voided by it for any
reason, (iii) accepted by it hereunder, (iv) purchased by it hereunder and
(v) canceled at their respective maturities. Each Canadian Lender further
agrees to retain such records in the manner and for the statutory periods
provided in the various Canadian provincial or federal statutes and
regulations which apply to such Canadian Lender.
(6) Execution of Bankers' Acceptances. Drafts of the Canadian
Borrower to be accepted as Bankers' Acceptances hereunder shall be duly executed
on behalf of the Canadian Borrower. Notwithstanding that any person whose
signature appears on any Bankers' Acceptance as a signatory for the Canadian
Borrower
46
may no longer be an authorized signatory for the Canadian Borrower at
the date of issuance of a Bankers' Acceptance, such signature shall nevertheless
be valid and sufficient for all purposes as if such authority had remained in
force at the time of such issuance, and any such Bankers' Acceptance so signed
shall be binding on the Canadian Borrower.
(7) Acceptance of Bankers' Acceptances. Each Draft to be accepted
by a Canadian Lender shall be accepted by such Canadian Lender at its Canadian
Lending Office.
(8) Purchase of Bankers' Acceptances. Each Canadian Lender shall
be required to purchase (subject to the commercial availability of a resale
market in the case of Bankers' Acceptances with a term of approximately 30, 60,
90 or 180 days, as the case may be) from the Canadian Borrower on the Borrowing
Date (Canada), at the Applicable BA Discount Rate, Bankers' Acceptances in an
amount equal to such Lender's Revolving Credit Commitment Percentage of the
Bankers' Acceptances to be accepted by the Canadian Lenders on such date and to
provide the BA Discount Proceeds thereof to the Canadian Administrative Agent at
the office of the Canadian Administrative Agent specified in subsection 12.2 (or
at such other location as the Canadian Administrative Agent may direct) not
later than 12:00 noon, Toronto time, on such Borrowing Date (Canada), for the
account of the Canadian Borrower. The Acceptance Fee payable by the Canadian
Borrower to each Canadian Lender under subsection 4.3(e) in respect of each
Bankers' Acceptance accepted and purchased by such Canadian Lender from the
Canadian Borrower shall be set off against the BA Discount Proceeds payable by
such Canadian Lender under this subsection 4.3(b)(8). Not later than 2:00 P.M.,
Toronto time, on such Borrowing Date (Canada), the Canadian Administrative Agent
shall make such BA Discount Proceeds available to the Canadian Borrower by the
Canadian Administrative Agent's making a wire transfer to the account of the
Canadian Borrower as specified by the Canadian Borrower in the notice of
borrowing with the aggregate amount actually received by the Canadian
Administrative Agent from the Canadian Lenders and in like funds as received by
the Canadian Administrative Agent.
(9) Sale of Bankers' Acceptances. Each Canadian Lender may at any
time and from time to time hold, sell, rediscount or otherwise dispose of any or
all Bankers' Acceptances accepted and purchased by it.
(10) Waiver of Presentment and Other Conditions. To the extent
permitted by applicable law, the Canadian Borrower waives presentment for
payment and any other defense to payment of any amounts due to any Canadian
Lender in respect of any Bankers' Acceptance accepted by it pursuant to this
Agreement that might exist solely by reason of such Bankers' Acceptance being
held, at the maturity thereof, by such Canadian Lender in its own right, and the
Canadian Borrower agrees not to claim any days of grace if such Canadian Lender
as holder sues the Canadian Borrower on the Bankers' Acceptances for payment of
the amount payable by the Canadian Borrower thereunder.
47
(c) The Canadian Borrower hereby unconditionally promises to reimburse
each Canadian Lender for, and there shall become due and payable at 10:00 A.M.,
Toronto time, on the maturity date for each Bankers' Acceptance, an amount in
Canadian Dollars in same day funds equal to the face amount of such Bankers'
Acceptance. The Canadian Borrower shall make each such reimbursement payment (i)
by causing any proceeds of a Refunding Bankers' Acceptance issued in accordance
with subsection 4.3(d) or conversion of such Bankers' Acceptance in accordance
with subsection 4.4 to be applied in reduction of such reimbursement payment;
and (ii) by depositing the amount of such reimbursement payment (or any portion
thereof remaining unpaid after application of any proceeds referred to in clause
(i)) with the Canadian Administrative Agent, for the account of the respective
Canadian Lenders. The Canadian Borrower's payment in accordance with this
subsection 4.3(c) shall satisfy its obligations under any Bankers' Acceptance to
which it relates, and each Canadian Lender shall thereafter be solely
responsible for the payment of such Bankers' Acceptance.
(d) The Canadian Borrower shall give irrevocable written or telephonic
notice (in the case of telephonic notice, to be promptly confirmed in writing)
to the Canadian Administrative Agent at or before 12:00 noon, Toronto time, two
Business Days (Canada) prior to the maturity date of each Bankers' Acceptance of
the Canadian Borrower's intention to issue a Bankers' Acceptance on such
maturity date (a "Refunding Bankers' Acceptance") to provide for the payment of
such maturing Bankers' Acceptance (it being understood that payments by the
Canadian Borrower and fundings by the Canadian Lenders in respect of each
maturing Bankers' Acceptance and the related Refunding Bankers' Acceptance shall
be made on a net basis reflecting the difference between the face amount of such
maturing Bankers' Acceptance and the BA Discount Proceeds (net of the applicable
Acceptance Fee) of such Refunding Bankers' Acceptance). If the Canadian Borrower
fails to give such notice or does not have sufficient funds on deposit in the
amount of reimbursement payment in accordance with subsection 4.3(c)(ii), the
Canadian Borrower shall be deemed to have requested that such maturing Bankers'
Acceptances be repaid with the proceeds of C$ Prime Loans (without any
requirement to give notice with respect thereto), commencing on the maturity
date of such maturing Bankers' Acceptances.
(e) An Acceptance Fee shall be payable by the Canadian Borrower to
each Canadian Lender in advance (in the manner specified in subsection
4.3(b)(8)) upon the issuance of a Bankers' Acceptance to be accepted by such
Canadian Lender calculated at the rate per annum equal to the Applicable Margin
for Revolving Credit Loans that are Eurodollar Loans, such Acceptance Fee to be
calculated on the face amount of such Bankers' Acceptance and to be computed on
the basis of the number of days in the term of such Bankers' Acceptance and a
year of 365 days.
4.4 Conversion Option. Subject to the provisions of this Agreement,
the Canadian Borrower may, prior to the Revolving Commitment Termination Date,
effective on any Business Day (Canada), convert, in whole or in part, C$ Prime
Loans into Bankers' Acceptances or vice versa upon giving to the Canadian
Administrative Agent prior irrevocable written or telephonic notice (in the case
of telephonic notice, to be promptly confirmed in writing) within the notice
period and in the form which would
48
be required to be given to the Canadian Administrative Agent in respect of the
category of C$ Loan into which the outstanding C$ Loan is to be converted in
accordance with the provisions of subsection 4.2 or 4.3, as applicable, provided
that:
(a) no C$ Prime Loan may be converted into a Bankers' Acceptance when
any Event of Default has occurred and is continuing;
(b) each conversion into Bankers' Acceptances shall be for an
aggregate amount of C$1,000,000 (and whole multiples of C$100,000 in excess
thereof), and each conversion to C$ Prime Loans shall be in an amount equal to
C$500,000 (or a whole multiple of C$100,000 in excess thereof); and
(c) Bankers' Acceptances may be converted only on the maturity date of
such Bankers' Acceptances and, provided that, if less than all Bankers'
Acceptances are converted, then after such conversion not less than C$1,000,000
(and whole multiples of C$100,000 in excess thereof) shall remain as Bankers'
Acceptances.
Notwithstanding the foregoing, if the Canadian Borrower requests a conversion
under this subsection 4.4 from Bankers' Acceptances into C$ Prime Loans, the
notice period shall be increased from one Business Day (Canada) to two Business
Days (Canada).
4.5 Circumstances Making Bankers' Acceptances Unavailable.
(a) If the Canadian Administrative Agent determines in good faith,
which determination shall be final, conclusive and binding upon the Canadian
Borrower, and notifies the Canadian Borrower that, by reason of circumstances
affecting the money market, there is no market for Bankers' Acceptances, then:
(i) the right of the Canadian Borrower to request a borrowing by
way of Bankers' Acceptance shall be suspended until the Canadian
Administrative Agent determines that the circumstances causing such
suspension no longer exist and the Canadian Administrative Agent so
notifies the Canadian Borrower; and
(ii) any notice relating to a borrowing by way of Bankers'
Acceptance that is outstanding at such time shall be deemed to be a notice
requesting a borrowing by way of C$ Prime Loans (all as if it were a notice
given pursuant to subsection 4.2).
(b) The Canadian Administrative Agent shall promptly notify the
Canadian Borrower (with a copy to the Canadian Lenders) of the suspension of the
Canadian Borrower's right to request a borrowing by way of Bankers' Acceptance
and of the termination of such suspension.
4.6 Reports. The Canadian Administrative Agent shall deliver to the
Administrative Agent, at any time and from time to time when the Administrative
Agent may so request, a statement, substantially in the form of Exhibit O,
showing (i) the aggregate principal amount of C$ Prime Loans outstanding from
the Canadian Lenders as
49
of the close of business on the Business Day immediately preceding the date of
such report, (ii) the aggregate undiscounted face amount of Bankers' Acceptances
outstanding from the Canadian Lenders as of the close of business on the
Business Day immediately preceding the date of such report and (iii) such other
matters as are contained therein. The Canadian Administrative Agent hereby
agrees to deliver a copy of each such statement to the U.S. Borrower, the
Canadian Borrower or any Lender promptly upon the request of any such Person.
4.7 Use of Proceeds of C$ Loans. The proceeds of the C$ Prime Loans
and the Bankers' Acceptances (or BA Loans) hereunder shall be used by the
Canadian Borrower to finance the working capital needs and for the general
corporate purposes of the Canadian Borrower and its Subsidiaries.
4.8 Non-BA Lenders. If a Canadian Lender is not a Schedule I Bank,
Schedule II Bank or Schedule III Bank, or if it notifies the Canadian
Administrative Agent in writing that it is otherwise unable to accept bankers'
acceptances, such Canadian Lender shall give notice to such effect to the
Canadian Administrative Agent prior to 10:00 A.M., Toronto time, on the date of
any requested credit extension by way of Bankers' Acceptances (which notice may,
if so stated therein, remain in effect with respect to subsequent requests for
extension of credit by way of Bankers' Acceptances until revoked by notice to
the Canadian Administrative Agent) and shall make available to the Canadian
Administrative Agent, for the account of the Canadian Borrower, in accordance
with subsection 4.3(b)(8) hereof, on the applicable Borrowing Date (Canada), a
loan in Canadian Dollars (a "BA Loan") in the principal amount equal to the BA
Discount Proceeds of a notional Bankers' Acceptance equal in amount to such
Lender's Revolving Credit Commitment Percentage of the total amount of credit
requested to be extended by way of Bankers' Acceptances and for the same term as
the Draft that such Canadian Lender would have otherwise been required to accept
and purchase hereunder.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS
5.1 Procedure for Borrowing. (a) The U.S. Borrower may borrow under
the Commitments on any Business Day (or, with respect to any borrowing of a
Canadian Revolving Credit Loan, on any Business Day (Canada)); provided that,
with respect to any borrowing, the U.S. Borrower shall give the Administrative
Agent irrevocable notice, which notice must be received by the Administrative
Agent (i) prior to 1:00 P.M., New York City time, three Business Days prior to
the requested Borrowing Date if all or any part of the Loans are to be
Eurodollar Loans under the U.S. Revolving Credit Commitments, (ii) prior to 1:00
P.M., New York City time, on the requested Borrowing Date if the borrowing is to
be solely of Alternate Base Rate Loans under the U.S. Revolving Credit
Commitments or (iii) if the borrowing is to include Canadian Revolving Credit
Loans (provided that, at the time of the requested borrowing thereof, the U.S.
Revolving Credit Commitments have been fully utilized) (x) prior to 1:00 P.M.,
New York City time, four Business Days prior to the requested Borrowing Date if
all or any part of the Loans are to be Eurodollar Loans under the Canadian
Revolving Credit Commitments or (y) prior to 1:00 P.M., New York City time, two
Business Days prior to the requested Borrowing Date if the borrowing is to be
solely of Alternate Base Rate
50
Loans under the Canadian Revolving Credit Commitments, and must specify (A) the
amount of the borrowing, (B) the number and location of the account to which
funds are to be disbursed, (C) whether such Loans are initially to be Eurodollar
Loans or Alternate Base Rate Loans or a combination thereof, (D) if the
borrowing is to be entirely or partly Eurodollar Loans, the length of the
Interest Period for such Eurodollar Loans and (E) whether the Loan is a Term
Loan, a Swing Line Loan or Revolving Credit Loan. Upon receipt of such notice
the Administrative Agent shall promptly notify each affected U.S. Lender thereof
and, in the case of any borrowing which is to include Canadian Revolving Credit
Loans, the Administrative Agent shall promptly notify the Canadian
Administrative Agent, which shall promptly notify each affected Canadian Lender.
Not later than 3:00 P.M., New York City time, on the Borrowing Date specified in
such notice, each affected Lender shall make available to the Administrative
Agent at the office of the Administrative Agent specified in subsection 12.2 (or
at such other location as the Administrative Agent may direct) an amount in
immediately available funds equal to the amount of the Loan to be made by such
Lender (except that proceeds of Swing Line Loans will be made available to the
U.S. Borrower in accordance with subsection 3.4(a)). Loan proceeds received by
the Administrative Agent hereunder shall promptly be made available to the U.S.
Borrower by the Administrative Agent's making a wire transfer to the account of
the U.S. Borrower as specified by the U.S. Borrower in the notice of borrowing
with the aggregate amount actually received by the Administrative Agent from the
Lenders and in like funds as received by the Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $1,000,000 or a whole multiple of
$500,000 in excess thereof and (ii) no more than sixteen Interest Periods shall
be in effect at any one time.
5.2 Conversion and Continuation Options. (a) Subject to subsection
5.12, the U.S. Borrower may elect from time to time to convert Eurodollar Loans
into Alternate Base Rate Loans by giving the Administrative Agent irrevocable
notice of such election, to be received by the Administrative Agent prior to
12:00 noon, New York City time, at least three Business Days prior to the
proposed conversion date. The U.S. Borrower may elect from time to time to
convert all or a portion of the Alternate Base Rate Loans (other than Swing Line
Loans) then outstanding to Eurodollar Loans by giving the Administrative Agent
irrevocable notice of such election, to be received by the Administrative Agent
prior to 12:00 noon, New York City time, at least three Business Days prior to
the proposed conversion date, specifying the Interest Period selected therefor,
and, if no Default or Event of Default has occurred and is continuing, such
conversion shall be made on the requested conversion date or, if such requested
conversion date is not a Business Day, on the next succeeding Business Day. Upon
receipt of any notice pursuant to this subsection 5.2, the Administrative Agent
shall promptly notify each affected Lender thereof. All or any part of the
outstanding Loans (other than Swing Line Loans) may be converted as provided
herein; provided that partial conversions of Alternate Base Loans shall be in
the aggregate principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof and the aggregate principal
51
amount of the resulting Eurodollar Loans outstanding in respect of any one
Interest Period shall be at least $1,000,000 or a whole multiple of $500,000 in
excess thereof.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the U.S. Borrower
giving notice to the Administrative Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans; provided that
no Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent or the Required Lenders
have, by written notice to the U.S. Borrower, determined that such a
continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 5.1(b) would be contravened or (iii) after the date that is one month
prior to the Revolving Credit Termination Date (in the case of continuations of
Revolving Credit Loans) or the final Installment Payment Date of the Term Loans.
5.3 Changes of Commitment Amounts. (a) The U.S. Borrower shall have
the right, upon not less than three Business Days' notice to the Applicable
Administrative Agent, to terminate or from time to time to permanently reduce
the Revolving Credit Commitments of any Class, subject to the provisions of this
subsection 5.3; provided that the Revolving Credit Lenders agree that the
Applicable Administrative Agent may, in connection with any termination of the
Revolving Credit Commitments, waive such notice requirement on behalf of itself
and the Revolving Credit Lenders of the applicable Class. With respect to any
reduction of the U.S. Revolving Credit Commitments, to the extent, if any, that
the Aggregate U.S. Revolving Credit Exposure as of the date of determination
exceeds the amount of the U.S. Revolving Credit Commitments as then reduced, the
U.S. Borrower shall be required to make a prepayment equal to such excess
amount, the proceeds of which shall be applied, first, to payment of the Swing
Line Loans then outstanding, second, to payment of the U.S. Revolving Credit
Loans then outstanding, third, to payment of any L/C Obligations then
outstanding, and, fourth, to cash collateralize any outstanding Letters of
Credit on terms reasonably satisfactory to the Administrative Agent. With
respect to any reduction of the Canadian Revolving Credit Commitments, to the
extent, if any, that the Aggregate Canadian Revolving Credit Exposure as of the
date of determination exceeds the amount of the Canadian Revolving Credit
Commitments as then reduced, the U.S. Borrower (in the case of Canadian
Revolving Credit Loans) or the Canadian Borrower (in the case of C$ Loans) shall
be required to make a prepayment equal to such excess amount, the proceeds of
which shall be applied, first, to the payment of the Canadian Revolving Credit
Loans then outstanding, second, to the payment of C$ Prime Loans then
outstanding, third, to the payment of BA Loans then outstanding and, fourth, to
the cash collateralization of any Bankers' Acceptances then outstanding on terms
reasonably satisfactory to the Canadian Administrative Agent. Any complete
termination of the Revolving Credit Commitments of any Class shall be
accompanied by prepayment in full of (i) in the case of the U.S. Revolving
Credit Commitments, the U.S. Revolving Credit Loans, Swing Line Loans and L/C
Obligations then outstanding and by cash collateralization, backstop or
termination (at the U.S. Borrower's election) of any outstanding Letters of
Credit on terms reasonably satisfactory to the Administrative Agent and (ii) in
the case of the Canadian Revolving Credit Commitments, the Canadian Revolving
Credit Loans, C$
52
Prime Loans and BA Loans and by cash collateralization of any Bankers'
Acceptances then outstanding on terms reasonably satisfactory to the Canadian
Administrative Agent (with such prepayment to be made by the U.S. Borrower, in
the case of Canadian Revolving Credit Loans, and by the Canadian Borrower in all
other cases). Upon termination of the Revolving Credit Commitments, any Letter
of Credit then outstanding that has been so cash collateralized or backstopped
by a letter of credit in a face amount equal to 105% of the undrawn face amount
of the Letter of Credit being backstopped with terms and conditions and from a
financial institution acceptable to the Issuing Lender in its sole discretion
(each, a "Backstop L/C") shall no longer be considered a "Letter of Credit" as
defined in subsection 1.1 and any L/C Participating Interests heretofore granted
by the Issuing Lender to the U.S. Revolving Credit Lenders in such Letter of
Credit shall be deemed terminated (subject to automatic reinstatement in the
event that such cash collateral is returned or Backstop L/C is terminated or
cancelled and the Issuing Lender is not fully reimbursed for any such L/C
Obligations) but the Letter of Credit fees payable under subsection 3.9 shall
continue to accrue to the Issuing Lender (or, in the event of any such automatic
reinstatement, to the Issuing Lender and the Participating Lenders as provided
in subsection 3.9) with respect to such Letter of Credit until the expiry
thereof (provided that in lieu of paying a Standby or Commercial L/C fee, as the
case may be, equal to the Applicable Margin for Revolving Credit Loans which are
Eurodollar Loans per annum, the U.S. Borrower shall pay to the Administrative
Agent, for the account of the Issuing Lender (and, if applicable in the event of
any such automatic reinstatement, the Participating Lenders), an amount equal to
0.25% per annum).
(b) In the case of termination or reduction of the Revolving Credit
Commitments of any Class, interest accrued on the amount of any prepayment
relating thereto and any unpaid commitment fee accrued hereunder shall be paid
on the date of such termination or reduction. Any such partial reduction of the
Revolving Credit Commitments of any Class shall be in an amount of $1,000,000 or
a whole multiple of $500,000 in excess thereof and shall, in each case, reduce
permanently the amount of the Revolving Credit Commitments of such Class then in
effect.
5.4 Optional and Mandatory Prepayments; Repayments of Term Loans. (a)
Subject to subsection 5.12, the U.S. Borrower may at any time and from time to
time prepay U.S. Loans, in whole or in part, without premium or penalty, by
irrevocable notice to the Administrative Agent by 10:00 A.M., New York City
time, on the same Business Day (or, in the case of Swing Line Loans, by
irrevocable notice to the Administrative Agent by 12:00 noon, New York City
time, on the same Business Day) in the case of Alternate Base Rate Loans, and
three Business Days' irrevocable notice to the Administrative Agent in the case
of Eurodollar Loans, specifying the date and amount of prepayment and whether
the prepayment is of Revolving Credit Loans or Term Loans. Upon receipt of such
notice the Administrative Agent shall promptly notify each affected Lender
thereof. If such notice is given, the U.S. Borrower shall make such prepayment,
and the payment amount specified in such notice shall be due and payable, on the
date specified therein. Partial prepayments (i) of Term Loans shall be in an
aggregate principal amount equal to the lesser of (A) (I) $1,000,000, or a whole
multiple of $500,000 in excess thereof with respect to Eurodollar Loans or (II)
$500,000, or a whole
53
multiple of $100,000 in excess thereof with respect to Alternate Base Rate Loans
and (B) the aggregate unpaid principal amount of the Term Loans, and (ii) of
Revolving Credit Loans shall be in an aggregate principal amount equal to the
lesser of (A) (I) $1,000,000, or a whole multiple of $500,000 in excess thereof
with respect to Eurodollar Loans or (II) $500,000, or a whole multiple of
$100,000 in excess thereof with respect to Alternate Base Rate Loans and (B) the
aggregate unpaid principal amount of the Revolving Credit Loans, as the case may
be. Prepayments of the Term Loans pursuant to this subsection 5.4(a) shall be
applied first, to any installment due to be paid within twelve months of such
prepayment and, second, ratably to the remaining installments thereof based on
the outstanding amount of such remaining installments thereof.
(b) (i) So long as any Term Loans are outstanding, if, subsequent to
the Closing Date, the Parent, Holdings, the U.S. Borrower or any of its
Subsidiaries shall issue any Capital Stock, 50% of the Net Proceeds thereof
(excluding amounts provided by the Investor Group or their Affiliates or by
employees of such issuer) shall be promptly applied toward the prepayment of the
Term Loans with such application being made first, to any installment due to be
paid within twelve months of such prepayment and, second, ratably to the
remaining installments thereof based on the outstanding amount of such remaining
installments; provided that Net Proceeds of such issuance shall be deemed to be
Net Proceeds of such issuance for purposes of this subsection 5.4(b)(i) only
after deducting therefrom any cash proceeds therefrom actually applied to the
redemption of (a) any then outstanding aggregate principal amount of Bridge Debt
(including all accrued interest on such Indebtedness and the amount of all
expenses, premium or penalties associated therewith) and (b) up to 35% of any
Permitted Notes under any "equity clawback" provisions and (c) up to 35% of the
Preferred Stock under any "equity clawback" provisions and, in the case of
clauses (b) and (c), the payment of any expenses, premiums, penalties or accrued
interest with respect thereto; provided that, if at the time of any such
issuance, the Leverage Ratio as of the last day of the most recently ended
Fiscal Quarter of the U.S. Borrower is (A) less than 2.75 to 1.00 and greater
than or equal to 2.00 to 1.00, an amount equal to 25% of the Net Proceeds
thereof shall be applied as set forth above and (B) less than 2.00 to 1.00, no
such prepayment shall be required in respect of such Net Proceeds.
(ii) If, subsequent to the Closing Date, Holdings, the U.S.
Borrower or any of its Subsidiaries shall incur or permit the incurrence of
any Indebtedness (other than Indebtedness permitted pursuant to subsection
9.1, unless otherwise specified in such subsection), 100% of the Net
Proceeds thereof shall be promptly applied toward the prepayment of the
Term Loans with such application being made first, to any installment due
to be paid within twelve months of such prepayment and, second, ratably to
the remaining installments thereof based on the outstanding amount of
remaining installments.
(iii) If, subsequent to the Closing Date, the U.S. Borrower or
any of its Subsidiaries shall receive Net Proceeds from any Asset Sale,
such Net Proceeds shall be promptly applied toward the prepayment of the
Term Loans with such application being made first, to any installment due
to be
54
paid within twelve months of such prepayment and, second, ratably to the
remaining installments thereof based on the outstanding amount of such
remaining installments; provided that such Net Proceeds need not be applied
to the prepayment of the Term Loans until the earlier of the date that the
aggregate amount of Net Proceeds received by the U.S. Borrower or any of
its Subsidiaries from any Asset Sales exceeds $1,000,000 (and has not yet
been applied to the prepayment of the Term Loans hereunder) and the date
which is six months after the last application of Net Proceeds pursuant to
this subsection 5.4(b)(iii).
(iv) If for any Fiscal Year of the U.S. Borrower commencing with
the first complete Fiscal Year ending after the Closing Date, there shall
be Excess Cash Flow for such Fiscal Year, 75% of such Excess Cash Flow
shall be promptly applied toward prepayment of the Term Loans with such
application being made first, to any installment due to be paid within
twelve months of such prepayment and, second, ratably to the remaining
installments thereof based on the outstanding amount of such remaining
installments; provided that, if the Leverage Ratio as of the last day of
the fourth quarter of the Fiscal Year for which such prepayment is being
made is (A) less than 3.00 to 1.00 and greater than or equal to 2.00 to
1.00, an amount equal to 50% of such Excess Cash Flow shall be applied as
set forth above and (B) less than 2.00 to 1.00, no such prepayment shall be
required with respect to such Excess Cash Flow. Each such prepayment shall
be made not later than 120 days after the end of such Fiscal Year.
(v) The U.S. Borrower shall give the Administrative Agent (which
shall promptly notify each affected Lender) at least one Business Day's
notice of each prepayment or mandatory reduction pursuant to this
subsection 5.4(b) setting forth the date and amount thereof. Except as
otherwise may be agreed by the Administrative Agent, as agent for the
Required Lenders, any prepayment of Loans pursuant to this subsection 5.4
shall be applied, first, to any Alternate Base Rate Loans then outstanding
and the balance of such prepayment, if any, to the Eurodollar Loans then
outstanding; provided that prepayments of Eurodollar Loans, if not on the
last day of the Interest Period with respect thereto, shall be prepaid
subject to the provisions of subsection 5.12 or, at the option of the U.S.
Borrower with respect to any mandatory prepayment, the amount of such
prepayment (after application to any Alternate Base Rate Loans) shall be
deposited with the Administrative Agent as cash collateral for the Loans on
terms reasonably satisfactory to the Administrative Agent and thereafter
shall be applied in the order of the Interest Periods next ending most
closely to the date such prepayment is required to be made and on the last
day of each such Interest Period. After such application, unless an Event
of Default shall have occurred and be continuing, any remaining interest
earned on such cash collateral shall be paid to the U.S. Borrower.
55
(c) The Term Loans shall be repaid in consecutive semi-annual
installments on the dates set forth below (each such day, an "Installment
Payment Date"), in an aggregate amount equal to the product of (i) the
percentage specified for each such Installment Payment Date multiplied by (ii)
the aggregate amount of the outstanding Term Loans on the Change of Control
Payment Date (after giving effect to any Change of Control Term Loans made on
such date):
Installment Payment Date Installment Amount
------------------------ ---------------------
July 2, 2004 2.50%
December 30, 2004 2.50%
July 1, 2005 2.50%
December 30, 2005 3.75%
June 30, 2006 3.75%
December 29, 2006 5.0%
June 29, 2007 5.0%
December 28, 2007 5.0%
June 27, 2008 5.0%
January 2, 2009 7.5%
July 2, 2009 7.5%
December 31, 2009 25.0%
Term Loan Maturity Date all amounts then
outstanding under the
Term Loans
Amounts repaid on account of the Term Loans pursuant to this subsection or
otherwise paid or prepaid in respect of Term Loans may not be reborrowed.
Accrued interest on the amount of any prepayments shall be paid on the Interest
Payment Date next succeeding the date of any partial prepayment in the case of
any Alternate Base Rate Loans and on the date of such prepayment in the case of
any Eurodollar Loans or a prepayment in full of the Term Loans.
(d) The Canadian Borrower may, subject to subsection 5.12, at any time
and from time to time, prepay the C$ Loans in whole or in part, without premium
or penalty, provided that the Canadian Borrower shall give the Canadian
Administrative Agent at least two Business Days' (Canada) irrevocable notice of
each such prepayment in the case of C$ Prime Loans, and three Business Days'
(Canada) irrevocable notice of each such prepayment in the case of Bankers'
Acceptances, specifying (i) the date and amount of such prepayment (which, in
the case of any Bankers' Acceptance, shall be the full undiscounted face amount
thereof) and (ii) whether the amounts prepaid are on account of C$ Prime Loans
or Bankers' Acceptances. If such notice is given, the
56
Canadian Borrower shall make such prepayment, and the payment amount specified
in such notice shall be due and payable, on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of C$1,000,000 or a whole
multiple of C$500,000 in excess thereof with respect to Bankers' Acceptances,
and C$500,000 or a whole multiple of C$100,000 in excess there of in the case of
C$ Prime Loans.
(e) If, at any time, the U.S. Borrower shall cease to own 100% of the
Capital Stock of the Canadian Borrower, all C$ Loans outstanding at such time
shall become immediately due and payable in full by the Canadian Borrower, and
the right of the Canadian Borrower to borrow C$ Loans hereunder shall be
immediately terminated.
(f) If, on any Calculation Date, the Aggregate Canadian Revolving
Credit Exposure exceeds the aggregate Canadian Revolving Credit Commitments,
then the Administrative Agent shall give notice thereof on such Calculation Date
to the Borrowing Parties and, on the immediately succeeding Reset Date, the
Canadian Borrower shall repay or prepay C$ Loans in an amount sufficient to
eliminate such excess.
(g) All payments and optional prepayments (other than prepayments as
set forth in subsection 5.11 with respect to increased costs) of Eurodollar
Loans hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Loans with the same Interest Period shall not be less than $1,000,000
or a whole multiple of $500,000 in excess thereof.
5.5 Interest Rates and Payment Dates. (a) Eurodollar Loans shall bear
interest for each day during each Interest Period applicable thereto, commencing
on (and including) the first day of such Interest Period to, but excluding, the
last day of such Interest Period, on the unpaid principal amount thereof at a
rate per annum equal to the Eurodollar Rate determined for such Interest Period
plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest for the period from
and including the date such Loans are made to, but excluding, the maturity date
thereof, or to, but excluding, the conversion date if such Loans are earlier
converted into Eurodollar Loans, on the unpaid principal amount thereof at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin.
(c) C$ Prime Loans shall bear interest for the period from and
including the date such Loans are made to, but excluding, the maturity date
thereof, or to, but excluding the conversion date if such Loans are earlier
converted into Bankers' Acceptances, on the unpaid principal amount thereof at a
rate per annum equal to the C$ Prime Rate plus the Applicable Margin for
Revolving Credit Loans that are Alternate Base Rate Loans.
(d) If all or a portion of (i) the principal amount of any of the
Loans or any Bankers' Acceptance, (ii) any interest payable thereon or (iii) any
other amount payable by a Credit Party hereunder or under any other Credit
Document, shall not be
57
paid when due (whether at the stated maturity, by acceleration or otherwise),
then any such Loan, if a Eurodollar Loan, shall be converted into an Alternate
Base Rate Loan at the end of the then-current Interest Period for such
Eurodollar Loan (which conversion shall occur automatically and without need for
compliance with the conditions for conversion set forth in subsection 5.2), and
any such overdue amount shall, without limiting the rights of the Lenders under
Section 10, bear interest (which shall be payable on demand) at a rate per annum
which is (x) in the case of a Loan, 2% plus the Alternate Base Rate plus the
Applicable Margin (or, in the case of a Eurodollar Loan, the Eurodollar Rate for
the Interest Period plus the Applicable Margin plus 2%, if higher), or (y) in
all other cases, equal to the rate that would be applicable to an Alternate Base
Rate Term Loan plus 2.00%, in each case from the date of such non-payment until
paid in full (as well after as before judgment).
(e) Except as otherwise expressly provided for in this subsection 5.5,
interest shall be payable in arrears on each Interest Payment Date.
(f) (i) If any provision of this Agreement would obligate any party to
this Agreement to make any payment of interest or other amount payable to any
Canadian Lender in an amount or calculated at a rate that would be prohibited by
law or would result in a receipt by the such Lender of interest at a criminal
rate (as such terms are construed under the Criminal Code (Canada)), then
notwithstanding such provision, such amount or rate shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by law or so result in a receipt
by such Lender of interest at a criminal rate, such adjustment to be effected,
to the extent necessary, as follows:
(x) first, by reducing the amount or rates of interest required to be
paid under this subsection 5.5; and
(y) thereafter, by reducing any fees, commissions, premiums and other
amounts that would constitute interest for purposes of Section 347 of the
Criminal Code (Canada).
(ii) If, notwithstanding the provisions of clause (i) of this
subsection 5.5(f), and after giving effect to all adjustments contemplated
thereby, any Canadian Lender shall have received an amount in excess of the
maximum permitted by such clause, then the party having paid such amount
shall be entitled, by notice in writing to such Lender, to obtain
reimbursement from such Lender of an amount equal to such excess, and,
pending such reimbursement, such amount shall be deemed to be an amount
payable by such Lender to such party.
(iii) Any amount or rate of interest referred to in this
subsection 5.5(f) shall be determined in accordance with generally accepted
actuarial practices and principles as an effective annual rate of interest
over the term of any C$ Prime Loan on the assumption that any charges, fees
or expenses that fall within the meaning of "interest" (as defined in the
Criminal
58
Code (Canada)) shall, if they relate to a specific period of time, be
prorated over that period of time and otherwise be prorated over the
Revolving Credit Commitment Period and, in the event of dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by
the Administrative Agent shall be conclusive for the purposes of such
determination absent manifest error.
5.6 Computation of Interest and Fees. (a) (i) Interest in respect of
Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to the Prime Rate and (ii) interest in respect of C$
Prime Loans (and all other amounts denominated in C$) shall be calculated on the
basis of a 365 (or 366 as the case may be) day year for the actual days elapsed.
Interest in respect of (x) Eurodollar Loans and in respect of Alternate Base
Rate Loans at any time that the Alternate Base Rate is determined by reference
to the Federal Funds Effective Rate and (y) all fees hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the U.S. Borrower and
the Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate or
the Eurocurrency Reserve Requirements shall become effective as of the opening
of business on the day on which such change in the Alternate Base Rate is
announced or such change in the Eurocurrency Reserve Requirements becomes
effective, as the case may be. The Administrative Agent shall as soon as
practicable notify the U.S. Borrower and the Lenders of the effective date and
the amount of each such change.
(b) For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever any interest or fee to be paid hereunder or in connection
herewith is to be calculated on the basis of any period of time that is less
than a calendar year, the yearly rate of interest to which the rate used in such
calculation is equivalent is the rate so used multiplied by the actual number of
days in the calendar year in which the same is to be ascertained and divided by
360 or 365, as applicable. The rates of interest under this Agreement are
nominal rates, and not effective rates or yields. The principle of deemed
reinvestment of interest does not apply to any interest calculation under this
Agreement.
(c) Each determination of an interest rate by the Applicable
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowing Parties and the Lenders in the absence
of manifest error. The Administrative Agent shall, at the request of the U.S.
Borrower, or any Lender, deliver to the U.S. Borrower or such Lender a statement
showing the quotations used by the Administrative Agent in determining the
Eurodollar Rate.
5.7 Certain Fees. The U.S. Borrower agrees to pay to the
Administrative Agent, for its own account, the fees separately agreed to in
writing from time to time by the Administrative Agent and the U.S. Borrower.
5.8 Inability to Determine Interest Rate. In the event that the
Administrative Agent shall have determined (which determination shall, absent
manifest error, be conclusive and binding upon the U.S. Borrower) that (a) by
reason of
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circumstances affecting the interbank Eurodollar market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for any Interest Period
with respect to (i) proposed Loans that the U.S. Borrower has requested be made
as Eurodollar Loans, (ii) any Eurodollar Loans that will result from the
requested conversion of all or part of the Alternate Base Rate Loans into
Eurodollar Loans or (iii) the continuation of any Eurodollar Loan as such for an
additional Interest Period, or (b) dollar deposits in the relevant amount and
for the relevant period with respect to any such Eurodollar Loan are not
generally available to the Lenders in their respective Eurodollar Lending
Offices' interbank Eurodollar markets, the Administrative Agent shall forthwith
give telecopy or e-mail notice of such determination, confirmed in writing, to
the U.S. Borrower and the Lenders at least one day prior to, as the case may be,
the requested Borrowing Date, the conversion date or the last day of such
Interest Period. If such notice is given (i) any requested Eurodollar Loans
shall be made as Alternate Base Rate Loans, (ii) any Alternate Base Rate Loans
that were to have been converted to Eurodollar Loans shall be continued as
Alternate Base Rate Loans, and (iii) any outstanding Eurodollar Loans shall be
converted on the last day of the then current Interest Period applicable thereto
into Alternate Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent (which the Administrative Agent agrees to do when the
circumstances that prompted delivery of such notice no longer exist), no further
Eurodollar Loans shall be made and no Alternate Base Rate Loans shall be
converted to Eurodollar Loans.
5.9 Pro Rata Treatment and Payments. (a) Except to the extent
otherwise provided herein, each borrowing of Loans by a Borrowing Party from the
Lenders and any reduction of the Commitments of any Class of the Lenders
hereunder shall be made pro rata according to the relevant Commitment
Percentages of the Lenders with respect to the Loans borrowed or the Commitments
of the Class to be reduced.
(b) Whenever any payment received by the Administrative Agent under
this Agreement or any Note or any other Credit Document is insufficient to pay
in full all amounts then due and payable to the Administrative Agent and the
applicable Lenders under this Agreement:
(i) If the Administrative Agent has not received a Payment
Sharing Notice (or, if the Administrative Agent has received a Payment
Sharing Notice but the Event of Default specified in such Payment Sharing
Notice has been cured or waived in accordance with the provisions of this
Agreement), such payment shall be distributed by the Administrative Agent
and applied by the Administrative Agent and the Lenders in the following
order: first, to the payment of fees and expenses due and payable to the
Administrative Agent under and in connection with this Agreement and the
other Credit Documents; second, to the payment of all expenses due and
payable under subsection 12.5, ratably among the Lenders in accordance with
the aggregate amount of such payments owed to each such Lender; third, to
the payment of fees due and payable under subsections 3.2 and 3.9, ratably
among the Lenders in accordance with the Commitment Percentage of each
Lender of the Commitment for which such payment is owed and, in the case of
the Issuing Lender, the amount retained by the Issuing Lender for its own
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account pursuant to subsection 3.9; fourth, to the payment of interest then
due and payable on the Loans and the L/C Obligations ratably in accordance
with the aggregate amount of interest owed to each such Lender; and, fifth,
to the payment of the principal amount of the Loans and the L/C Obligations
which is then due and payable ratably among the Lenders in accordance with
the aggregate principal amount owed to each such Lender; or
(ii) If the Administrative Agent has received a Payment Sharing
Notice which remains in effect, all payments received by the Administrative
Agent under this Agreement or any Note shall be distributed by the
Administrative Agent and applied by the Administrative Agent and the
Lenders in the following order: first, to the payment of all amounts
described in clauses "first" through "third" of the foregoing clause (i) in
the order set forth therein; second, to the payment of the interest accrued
on all Loans and L/C Obligations, regardless of whether any such amount is
then due and payable, ratably among the Lenders in accordance with the
aggregate accrued interest plus the aggregate principal amount of all Loans
and L/C Obligations then due and payable and owed to such Lender; and,
third, to the payment of the principal amount of all Loans and L/C
Obligations, regardless of whether any such amount is then due and payable,
ratably among the Lenders in accordance with the aggregate principal amount
owed to such Lender.
The provisions of this subsection 5.9(b) shall apply mutatis mutandis to any
Payment Sharing Notice received by the Canadian Administrative Agent and to any
payments received by the Canadian Administrative Agent and the distribution
thereof by the Canadian Administrative Agent.
(c) If any Revolving Credit Lender (a "Non-Funding Lender") has (x)
failed to make a Revolving Credit Loan or a C$ Loan required to be made by it
hereunder and the Applicable Administrative Agent has determined that such
Lender is not likely to make such Revolving Credit Loan or such C$ Loan or (y)
given notice to any Borrowing Party or either of the Administrative Agents that
it will not make, or that it has disaffirmed or repudiated any obligation to
make, any Revolving Credit Loan or any C$ Loan as required hereunder, in each
case by reason of the provisions of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as amended, or otherwise, (i) any payment made on
account of the principal of the Revolving Credit Loans or any C$ Loan
outstanding shall be made as follows:
(A) in the case of any such payment made on any date when and to the
extent that in the determination of the Applicable Administrative Agent the
relevant Borrowing Party would be able under the terms and conditions
hereof to reborrow the amount of such payment under the Commitments and to
satisfy any applicable conditions precedent set forth in Section 7 to such
reborrowing, such payment shall be made on account of the outstanding
Revolving Credit Loans or C$ Loans, as applicable, held by the Lenders
other than the Non-Funding Lender pro rata according to the respective
outstanding principal amounts of the Revolving Credit Loans or C$ Loans, as
applicable, of such Lenders; and
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(B) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans or C$ Loans, as applicable, held by the
applicable Lenders pro rata according to the respective outstanding
principal amounts of such Revolving Credit Loans or C$ Loans, as
applicable; and
(ii) any payment made on account of interest on the Revolving
Credit Loans or C$ Loans, as applicable, shall be made pro rata according
to the respective amounts of accrued and unpaid interest due and payable on
the Revolving Credit Loans or C$ Loans, as applicable, with respect to
which such payment is being made. The relevant Borrowing Party agrees to
give the Applicable Administrative Agent such assistance in making any
determination pursuant to subparagraph (i)(A) of this paragraph as the
Applicable Administrative Agent may reasonably request. Any such
determination by the Applicable Administrative Agent shall be conclusive
and binding on the Lenders.
(d) All payments (including prepayments) to be made by the U.S.
Borrower on account of principal, interest and fees shall be made without
set-off or counterclaim and shall be made to the Administrative Agent, for the
account of the applicable Lenders at the Administrative Agent's office located
at Eleven Madison Avenue, New York, New York 10010 (or such other place as the
Administrative Agent shall notify the U.S. Borrower from time to time in
accordance with subsection 12.2), in Dollars and in immediately available funds.
The Administrative Agent shall promptly distribute such payments in accordance
with the provisions of subsection 5.9(b) or (c) upon receipt in like funds as
received. If any payment hereunder (other than payments on Eurodollar Loans)
would become due and payable on a day other than a Business Day, such payment
shall become due and payable on the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day (and with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension), unless the result of such extension would be to
extend such payment into another calendar month in which event such payment
shall be made on the immediately preceding Business Day. All payments (including
prepayments) to be made by the Canadian Borrower hereunder, whether on account
of principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made to the Canadian Administrative Agent, for the
account of the Canadian Lenders, at the Canadian Administrative Agent's office
located at One First Canadian Place, Suite 3000, X.X. Xxx 000, Xxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0 (or such other place as the Canadian Administrative Agent shall
notify the Canadian Borrower from time to time in accordance with subsection
12.2), in Canadian Dollars and in immediately available funds (provided,
however, that all amounts in respect of commitment fees payable by the Canadian
Borrower pursuant to subsection 3.2 shall be paid in Dollars and in immediately
available funds). If any payment hereunder becomes due and payable on a day
other than a Business Day (Canada), such payments shall be extended to the next
succeeding Business Day (Canada) (and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension), unless the result of such extension would be to extend such payment
into
62
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day (Canada). If any date for performance of any
non-monetary obligation of Holdings, the U.S. Borrower or any Subsidiary would
occur on a day other than a Business Day or Business Day (Canada), as
applicable, such date for performance shall be extended to the next succeeding
Business Day or Business Day (Canada), respectively.
(e) Unless the Applicable Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount which would constitute its Commitment Percentage of such
borrowing available to the Applicable Administrative Agent, the Applicable
Administrative Agent may assume that such Lender is making such amount available
to the Applicable Administrative Agent, in accordance with subsection 4.2, 4.3
or 5.1, as applicable, and the Applicable Administrative Agent may, in reliance
upon such assumption, make available to the U.S. Borrower or the Canadian
Borrower, as the case may be, a corresponding amount. If such amount is not made
available to the Applicable Administrative Agent by the required time on the
Borrowing Date or Borrowing Date (Canada), as the case may be, therefor, such
Lender shall pay to the Applicable Administrative Agent, on demand, such amount
with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate or, in the case of C$ Loans, the C$ Prime Rate, for the period
until such Lender makes such amount immediately available to the Applicable
Administrative Agent. A certificate of the Applicable Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
5.9(e) shall be conclusive absent manifest error. If such Lender's Commitment
Percentage of such borrowing is not in fact made available to the Applicable
Administrative Agent by such Lender within three Business Days of such Borrowing
Date (or three Business Days (Canada) of such Borrowing Date (Canada), as the
case may be), the Applicable Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Alternate Base Rate Loans or C$ Prime Loans, as the case may be, hereunder (in
lieu of any otherwise applicable interest), on demand, from the U.S. Borrower or
the Canadian Borrower, as the case may be, without prejudice to any rights which
the U.S. Borrower (or the Canadian Borrower, as the case may be) or the
Applicable Administrative Agent may have against such Lender hereunder. Nothing
contained in this subsection 5.9 shall relieve any Lender which has failed to
make available its ratable portion of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof.
(f) The failure of any Lender to make the Loan to be made by it on any
Borrowing Date (or Borrowing Date (Canada), as the case may be) shall not
relieve any other Lender of its obligation, if any, hereunder to make its Loan
on such Borrowing Date (or Borrowing Date (Canada), as the case may be), but no
Lender shall be responsible for the failure of any other Lender to make the Loan
to be made by such other Lender on such Borrowing Date (or Borrowing Date
(Canada), as the case may be).
5.10 Illegality. Notwithstanding any other provision herein, if (i)
any Change in Law occurring after the date that any lender becomes a Lender
party to this Agreement, shall make it unlawful for such Lender to make or
maintain Eurodollar Loans
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as contemplated by this Agreement, then, unless such Lender is able to make or
maintain such Eurodollar Loans at another branch or office of such Lender
without, in such Lender's sole determination, causing it to suffer any economic,
legal or regulatory disadvantage, the commitment of such Lender hereunder to
make Eurodollar Loans or to convert all or a portion of Alternate Base Rate
Loans into Eurodollar Loans shall forthwith be suspended until such time, if
any, as such illegality shall no longer exist and such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Alternate Base Rate Loans for the duration of the respective Interest Periods
(or, if permitted by applicable law, at the end of such Interest Periods) and
all payments of principal which would otherwise be applied to such Eurodollar
Loans shall be applied instead to such Lender's Alternate Base Rate Loans. The
U.S. Borrower hereby agrees to pay any Lender, promptly upon its demand, any
amounts payable pursuant to subsection 5.12 in connection with any conversion in
accordance with this subsection 5.10 (such Lender's notice of such costs, as
certified in reasonable detail as to such amounts to the U.S. Borrower through
the Administrative Agent, to be conclusive absent manifest error).
5.11 Requirements of Law. (a) In the event that any Change in Law or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority
occurring after the date that any lender becomes a Lender party to this
Agreement:
(i) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds
by, any office of such Lender which are not otherwise included in the
determination of the Eurodollar Rate or the rate with respect to C$ Loans,
as applicable; or
(ii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender or
its Eurodollar Lending Office or Canadian Lending Office of making, converting,
renewing or maintaining advances or extensions of credit or to reduce any amount
receivable hereunder, in each case, in respect of its Eurodollar Loans or C$
Loans, as the case may be, then, in any such case, the U.S. Borrower (or the
Canadian Borrower in the case of C$ Loans) shall pay such Lender, within 10 days
after the U.S. Borrower's receipt of a certificate from such Lender in
accordance with paragraph (f) of this Subsection 5.11, additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable which such Lender deems to be material as determined by such Lender
with respect to such Eurodollar Loans or C$ Loans, as the case may be, together
with interest on each such amount from the date required to be paid until
payment in full thereof at a rate per annum equal to the Alternate Base Rate in
the case of Eurodollar Loans, and the C$ Prime Rate in the case of C$ Loans,
plus 1%; provided, however, that this subsection 5.11(a) shall not apply with
respect to taxes and amounts relating thereto, which shall be governed solely
and exclusively by subsection 5.11(b).
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(b) In the event that any Change in Law occurring after the date that
any Person becomes a Lender party to this Agreement (or if an Assignee, the date
that the assigning Lender became a party to this Agreement) does or shall
subject any such Lender or its Eurodollar Lending Office or Canadian Lending
Office to any tax of any kind whatsoever with respect to this Agreement, any
Note, any Eurodollar Loans or any C$ Loans made by it, or change the basis of
taxation of payments to such Lender or its Eurodollar Lending Office or Canadian
Lending Office of principal, the commitment fee, interest or any other amount
payable hereunder (except for (x) net income, franchise or gross receipts taxes
imposed on the net income or gross receipts of such Lender or its Eurodollar
Lending Office or Canadian Lending Office by the jurisdiction under the laws of
which such Lender is organized or carries on business or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which such Lender's Eurodollar Lending Office or Canadian Lending Office is
located or any political subdivision or taxing authority thereof or therein,
including changes in the rate of tax on the overall net income or gross receipts
of such Lender or such Eurodollar Lending Office or Canadian Lending Office, (y)
taxes resulting from the substitution of any such system by another system of
taxation; provided that the taxes payable by Lenders subject to such other
system of taxation are not generally charged to borrowers from such Lenders
having loans or advances bearing interest at a rate similar to the Eurodollar
Rate and (z) all liabilities, penalties and interest with respect to any of the
foregoing) (all such non-excluded taxes being called "Indemnified Taxes"), all
payments made by the U.S. Borrower or the Canadian Borrower under this Agreement
shall be made free and clear of, and without reduction for or on account of
Indemnified Taxes. If any Indemnified Taxes are required to be withheld from any
amounts payable by the U.S. Borrower or the Canadian Borrower to the Applicable
Administrative Agent, or any Lender hereunder, the amounts so payable to it
shall be increased to the extent necessary to yield to the Applicable
Administrative Agent or such Lender (after payment of all Indemnified Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, an Assignee pursuant to
subsection 12.6(c)(i) shall receive additional amounts only to the extent the
assigning Lender would be entitled under this section. Whenever any Indemnified
Taxes are payable by the U.S. Borrower or the Canadian Borrower, as promptly as
possible thereafter, the U.S. Borrower or the Canadian Borrower, as the case may
be, shall send to the Applicable Administrative Agent or such Lender, as the
case may be, a certified copy of an original official receipt showing payment
thereof. If the U.S. Borrower or the Canadian Borrower fails to pay any
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to the Applicable Administrative Agent the required receipts or other required
documentary evidence, the U.S. Borrower or the Canadian Borrower, as the case
may be, shall indemnify the Applicable Administrative Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Applicable Administrative Agent or any Lender as a result of any such failure.
(c) In the event that any Change in Law occurring after the date that
any Person becomes a Lender party to this Agreement with respect to any such
Lender shall, in the opinion of such Lender, require that any Commitment of such
Lender be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by such Lender or
any corporation controlling such
65
Lender, and such Change in Law shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital, as the case may be, as a
consequence of such Lender's obligations hereunder to a level below that which
such Lender or such corporation, as the case may be, could have achieved but for
such Change in Law (taking into account such Lender's or such corporation's
policies, as the case may be, with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time following notice by
such Lender to the Applicable Administrative Agent (which shall in turn
immediately forward such notice to the U.S. Borrower or the Canadian Borrower,
as applicable) of such Change in Law as provided in paragraph (c) of this
subsection 5.11, within 15 days after demand by such Lender, the U.S. Borrower
or the Canadian Borrower, as applicable, shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation,
as the case may be, on an after-tax basis for such reduction.
(d) The U.S. Borrower or the Canadian Borrower, as the case may be,
shall not be required to make any payments to any Lender for any additional
amounts pursuant to this subsection 5.11 unless such Lender has given written
notice to the U.S. Borrower or the Canadian Borrower, as the case may be,
through the Applicable Administrative Agent, of its intent to request such
payments prior to or within 60 days after the date on which such Lender became
entitled to claim such amounts, which written notice sets forth in reasonable
detail the basis and calculation of such amounts. If any Lender has notified the
U.S. Borrower or the Canadian Borrower, as the case may be, through the
Applicable Administrative Agent of any increased costs pursuant to paragraph (a)
or (b) of this subsection 5.11, the U.S. Borrower or the Canadian Borrower, as
the case may be, at any time thereafter may, upon at least three Business Days'
notice to the Applicable Administrative Agent (which shall promptly notify the
Lenders thereof), and subject to subsection 5.12, prepay (or convert into
Alternate Base Rate Loans in the case of Eurodollar Loans) all (but not a part)
of the Eurodollar Loans or the C$ Loans, as applicable, then outstanding. Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of paragraph (a) or (b) of this subsection 5.11 with respect to such
Lender, it will, if requested by the U.S. Borrower or the Canadian Borrower, as
applicable, to the extent permitted by law or by the relevant Governmental
Authority and consistent with its internal policies, endeavor in good faith to
avoid or minimize the increase in costs or reduction in payments resulting from
such event (including, without limitation, endeavoring to change its Eurodollar
Lending Office or Canadian Lending Office, as applicable); provided, that such
avoidance or minimization can be made in such a manner that such Lender, in its
sole determination, suffers no economic, legal or regulatory disadvantage. If
any Lender requests compensation from the U.S. Borrower or the Canadian
Borrower, as the case may be, under this subsection 5.11, the U.S. Borrower or
the Canadian Borrower, as the case may be, may, by notice to such Lender (with a
copy to the Applicable Administrative Agent), suspend the obligation of such
Lender thereafter to make or continue Loans of the Type with respect to which
such compensation is requested, or to convert Loans of any other Type into Loans
of such Type, until the Requirement of Law giving rise to such request ceases to
be in effect; provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
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(e) Each U.S. Lender (and in case of an Assignee on the date it
becomes a U.S. Lender) that is not a United States Person (as defined in Section
7701(a)(30) of the Code) for federal income tax purposes either (1) in the case
of a U.S. Lender that is a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, (i) represents to the U.S. Borrower (for the benefit of the U.S.
Borrower and the Administrative Agent) that under applicable law and treaties no
taxes are required to be withheld by the U.S. Borrower or the Administrative
Agent with respect to any payments to be made to such Lender in respect of the
Loans or the L/C Participating Interests, (ii) agrees to furnish to the U.S.
Borrower, with a copy to the Administrative Agent, either U.S. Internal Revenue
Service ("IRS") Form W-8ECI (with respect to a complete exemption because the
income is effectively connected with a U.S. trade or business) or IRS Form
W-8BEN (wherein such Lender claims entitlement to complete exemption from U.S.
Federal withholding tax on all interest payments hereunder) and (iii) agrees
(for the benefit of the U.S. Borrower and the Administrative Agent), to the
extent it may lawfully do so at such times, to provide the U.S. Borrower, with a
copy to the Administrative Agent, a new Form W-8ECI (with respect to a complete
exemption because the income is effectively connected with a U.S. trade or
business) or Form W-8BEN (wherein such Lender claims entitlement to complete
exemption from U.S. Federal withholding tax on all interest payments hereunder)
upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such Lender, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption or (2) in the case of a U.S. Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) agrees to
furnish to the U.S. Borrower, with a copy to the Administrative Agent, (A) a
certificate substantially in the form of Exhibit I hereto (any such certificate,
a "Subsection 5.11(e)(2) Certificate") and (B) two accurate and complete
original signed copies of W-8ECI (with respect to a complete exemption because
the income is effectively connected with a U.S. trade or business) or Form
W-8BEN, certifying to such Lender's legal entitlement at the Closing Date (or,
in the case of an Assignee, on the date it becomes a U.S. Lender) to a complete
exemption from U.S. withholding tax under the provisions of Section 881(c) of
the Code with respect to all payments to be made under this Agreement, and (ii)
agrees, to the extent legally entitled to do so, upon reasonable request by the
U.S. Borrower, to provide to the U.S. Borrower (for the benefit of the U.S.
Borrower and the Administrative Agent) such other forms as may be required in
order to establish the legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Agreement. In addition, each
Lender, Issuing Lender, and agent of a Lender or Issuing Lender that is a U.S.
person within the meaning of Section 7701(a)(30) of the Code for U.S. Federal
income tax purposes, unless such Person is an exempt recipient within the
meaning of Treasury Regulations (S) 1.6049-4(c)(1)(ii), shall deliver to the
U.S. Borrower and the Administrative Agent, at the time(s) and in the manner(s)
specified for delivery of the foregoing IRS forms, two accurate and complete
original signed copies of IRS Form W-9 (or any successor form thereto)
certifying that such Person is exempt from U.S. backup withholding tax on
payments made hereunder. Notwithstanding any provision of this subsection 5.11
or 5.9(d) to the contrary, the U.S. Borrower shall have no obligation to pay any
amount to or for the account of any U.S.
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Lender (or the Eurodollar Lending Office of any U.S. Lender) on account of any
taxes pursuant to this subsection 5.11, to the extent that such amount results
from (i) the failure of any Lender to comply with its obligations pursuant to
this subsection 5.11 or (ii) any representation or warranty made or deemed to be
made by any U.S. Lender pursuant to this subsection 5.11(e) proving to have been
incorrect, false or misleading in any material respect when so made or deemed to
be made.
(f) If any Lender, Issuing Lender, or agent of a Lender or Issuing
Lender determines in its sole reasonable discretion that it has actually
received any refund of tax in connection with any deduction or withholding or
payment of any additional amount pursuant to this Section 5.11, it shall pay
over such refund to the U.S. Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the U.S. Borrower under this
Section 5.11 with respect to the tax giving rise to such refund), net of all
out-of-pocket expenses of the Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the U.S. Borrower, upon the request of any Lender,
agrees to repay the amount paid over to the U.S. Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Lender in the event the Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the U.S. Borrower or any other Person.
(g) A certificate in reasonable detail as to any amounts submitted by
such Lender, through the Applicable Administrative Agent, to the U.S. Borrower
or the Canadian Borrower, as the case may be, shall be conclusive in the absence
of manifest error. The covenants contained in this subsection 5.11 shall survive
the termination of this Agreement and repayment of the Loans.
5.12 Indemnity. (a) The U.S. Borrower agrees to indemnify each Lender
and to hold such Lender harmless from any loss or expense (but without
duplication of any amounts payable as default interest) which such Lender may
sustain or incur as a consequence of (a) default by the U.S. Borrower in payment
of the principal amount of or interest on any Eurodollar Loans of such Lender,
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its Eurodollar Loans hereunder, (b) default by the U.S. Borrower in
making a borrowing after the U.S. Borrower has given a notice in accordance with
subsection 5.1 or in making a conversion of Alternate Base Rate Loans to
Eurodollar Loans or in continuing Eurodollar Loans as such, in either case,
after the U.S. Borrower has given notice in accordance with subsection 5.2, (c)
default by the U.S. Borrower in making any prepayment after the U.S. Borrower
has given a notice in accordance with subsection 5.4 or (d) a payment or
prepayment of a Eurodollar Loan, any mandatory assignment of a Eurodollar Loan
pursuant to subsection 5.14 or conversion (including without limitation, as a
result of subsection 5.4 and/or a conversion pursuant to subsection 5.10) of any
Eurodollar Loan into an Alternate Base Rate Loan, in any such case on a day
which is not the last day of an Interest Period with respect thereto, including,
but not limited to, any such loss or
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expense arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Eurodollar Loans hereunder (but
excluding loss of profit). This covenant shall survive termination of this
Agreement and repayment of the Loans.
(b) The Canadian Borrower agrees to indemnify each Canadian Lender and
to hold such Lender harmless from any loss or expense (but without duplication
of any amounts payable as default interest) which such Lender may sustain or
incur as a consequence of (a) default by the Canadian Borrower in payment of the
principal amount of or interest on any C$ Loans, including, but not limited to,
any such loss or expense arising from interest or fees payable by such Lender to
lenders of funds obtained by it in order to make or maintain C$ Loans hereunder,
(b) default by the Canadian Borrower in making a borrowing after the Canadian
Borrower has given a notice in accordance with subsection 4.2 or 4.3 or in
making a conversion of C$ Loans after the Canadian Borrower has given notice in
accordance with subsection 4.4 or (c) default by the Canadian Borrower in making
any prepayment after the Canadian Borrower has given a notice in accordance with
subsection 5.4(d). This covenant shall survive termination of this Agreement and
repayment of the Loans.
5.13 Repayment of Loans; Evidence of Debt. (a) The U.S. Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each applicable Lender (i) the then unpaid principal amount of each
Revolving Credit Loan of such Lender on the Revolving Credit Termination Date,
(ii) the principal amount of the Term Loans of such Lender payable on each
Installment Payment Date, in accordance with subsection 5.4(c) (or the then
unpaid principal amount of such Term Loans on the date that the Term Loans
become due and payable pursuant to Section 10), and (iii) the then unpaid
principal amount of the Swing Line Loans of the Swing Line Lender on the
Revolving Credit Termination Date. The U.S. Borrower hereby further agrees to
pay interest on the unpaid principal amount of the U.S. Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum and on the dates set forth in subsection 5.5.
(b) The Canadian Borrower hereby unconditionally promises to pay to
the Canadian Administrative Agent for the account of each Canadian Lender on the
Revolving Credit Termination Date the then unpaid principal amount of each C$
Loan. The Canadian Borrower hereby further agrees to pay interest on the unpaid
principal amount of the C$ Prime Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum and on the
dates set forth in subsection 5.5.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the U.S. Borrower and the
Canadian Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement.
(d) The Administrative Agents shall, on behalf of the Lenders and for
the benefit of the Borrowing Parties, maintain the Registers pursuant to
subsection 12.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the
69
Commitment of each Lender and the amount of each Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) whether such Loan has
been made to the U.S. Borrower or the Canadian Borrower, (iii) any Note
evidencing such Loan, (iv) the amount of any principal or interest due and
payable or to become due and payable from the U.S. Borrower or the Canadian
Borrower, as the case may be, to each Lender hereunder and (v) both the amount
of any sum received by the Applicable Administrative Agent hereunder from the
U.S. Borrower or the Canadian Borrower, as the case may be, and each Lender's
share thereof.
(e) The entries made in the Registers and the accounts of each Lender
maintained pursuant to subsection 5.13(c) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the U.S. Borrower or the Canadian Borrower, as the case may be,
therein recorded; provided that the failure of any Lender or the Applicable
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the U.S. Borrower or
the Canadian Borrower, as the case may be, to repay (with applicable interest)
the Loans made to the U.S. Borrower or the Canadian Borrower, as the case may
be, by such Lender or to repay any other obligations in accordance with the
terms of this Agreement.
(f) (i) The U.S. Borrower agrees that, upon the request to the
Applicable Administrative Agent by any Lender, the U.S. Borrower will execute
and deliver to such Lender (A) a promissory note of the U.S. Borrower evidencing
the Revolving Credit Loans of such Lender, substantially in the form of Exhibit
A with appropriate insertions as to date and principal amount (a "Revolving
Credit Note"), (B) a promissory note of the U.S. Borrower evidencing the Closing
Date Term Loan of such Lender, substantially in the form of Exhibit B-1 with
appropriate insertions as to date and principal amount (a "Closing Date Term
Note"), (C) a promissory note of the U.S. Borrower evidencing the Change of
Control Term Loan of such Lender, substantially in the form of Exhibit B-2 with
appropriate insertions as to date and principal amount (a "Change of Control
Term Note"), and/or (D) in the case of the Swing Line Lender, a promissory note
of the U.S. Borrower evidencing the Swing Line Loans of the Swing Line Lender,
substantially in the form of Exhibit C-1 with appropriate insertions as to date
and principal amount (the "Swing Line Note"); and
(ii) The Canadian Borrower agrees that, upon the request to the
Canadian Administrative Agent by any Canadian Lender, the Canadian Borrower
will execute and deliver to such Lender a promissory note of the Canadian
Borrower evidencing the C$ Prime Loans or BA Loans made by such Lender,
substantially in the form of Exhibit C-2 with appropriate insertions as to
date and principal amount (a "C$ Note").
5.14 Replacement of Lenders. In the event any Lender or the Issuing
Lender is (a) a Non-Funding Lender, (b) is a Non-Consenting Lender, (c)
exercises its rights pursuant to subsection 5.10 or (d) requests payments
pursuant to subsections 3.10 or 5.11, the U.S. Borrower or the Canadian
Borrower, as the case may be may require, at its own expense (including payment
of any processing fees under subsection 12.6(e)) and
70
subject to subsection 5.12, such Lender or the Issuing Lender to assign, at par
plus accrued interest and fees, without recourse (in accordance with subsection
12.6) all of its interests, rights and obligations hereunder (including all of
its Commitments and the Loans and other amounts at the time owing to it
hereunder and its Notes and its interest in the Letters of Credit, if
applicable) to a bank, financial institution or other entity specified by the
U.S. Borrower or the Canadian Borrower, as the case may be; 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 U.S. Borrower or
the Canadian Borrower, as the case may be, shall have received the written
consent of the Applicable Administrative Agent, which consent shall not
unreasonably be withheld or delayed, to such assignment, (iii) the U.S. Borrower
or the Canadian Borrower, as the case may be, shall have paid to the assigning
Lender or the Issuing Lender all monies other than principal, interest and fees
accrued and owing hereunder to it (including pursuant to subsections 3.10, 5.10,
5.11 and 5.12) and (iv) in the case of a required assignment by the Issuing
Lender, the Letters of Credit shall be canceled and returned to the Issuing
Lender. For purposes of this subsection 5.14, the term "Non-Consenting Lender"
means, in the event that (i) the U.S. Borrower or the Administrative Agent has
requested the Lenders to consent to a departure or waiver of any provisions of
the Credit Documents or to agree to any amendment thereto, (ii) the consent,
waiver or amendment in question requires the consent of each affected Lender in
accordance with the terms of subsection 12.1 or all the Lenders with respect to
a certain class of the Loans and (iii) the Required Lenders or more than 50% of
the class of such Lenders have agreed to such consent, waiver or amendment, any
Lender who does not agree to such consent, waiver or amendment.
5.15 Reliance on Representation of the U.S. Borrower. Each of the U.S.
Borrower and the Canadian Borrower hereby agrees that the Administrative Agents
and the Lenders may rely on any representation, warranty, certificate, notice,
document or telephone request which purports to be executed or made, and which
the Applicable Administrative Agent or the Lenders, as the case may be, in good
faith believe to have been executed or made, by the U.S. Borrower or the
Canadian Borrower or any of their respective authorized officers, and (i) the
U.S. Borrower hereby further agrees to indemnify and hold each of the
Administrative Agents and the Lenders harmless for any action, including the
making of the borrowings hereunder, and any loss or expense, taken or incurred
by any of them as a result of their good faith reliance upon any such
representations, warranty, certificate, notice, document or telephone request
made by the U.S. Borrower or to which the U.S. Borrower is a party and (ii) the
Canadian Borrower hereby further agrees to indemnify and hold harmless each of
the Administrative Agents and the Lenders for any action, including the making
of the borrowings hereunder, and any loss or expense, taken or incurred by any
of them as a result of their good faith reliance on upon any representation,
warranty, certificate, notice, documents or telephonic request made by the
Canadian Borrower or to which the Canadian Borrower is a party.
SECTION 6. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans and to induce the Issuing Lender to issue, and the Participating
Lenders to
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participate in, the Letters of Credit, the U.S. Borrower hereby represents and
warrants to each Lender and each of the Administrative Agents as of the Closing
Date and as of the making of any extension of credit hereunder (other than with
respect to any borrowing of the Change of Control Term Loans):
6.1 Financial Condition. (a) The U.S. Borrower has heretofore
furnished to the Lenders (i) the audited consolidated balance sheets of the
Company and its consolidated Subsidiaries as at December 28, 2002 and December
29, 2001, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three Fiscal Years in the period ended on
December 28, 2002, reported on by and accompanied by an unqualified report from
Pricewaterhouse Coopers LLP and (ii) the unaudited consolidated balance sheet
and related statements of income, stockholders' equity and cash flows of the
Company and its consolidated Subsidiaries as of and for each Fiscal Quarter
subsequent to December 28, 2002 ended 45 days before the Closing Date, certified
by a Responsible Officer of the Company. Such financial statements present
fairly, in all material respects, the financial condition and results of
operations and cash flows of the Company and its consolidated subsidiaries as at
such dates and for such periods. Such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of the Company and its
consolidated Subsidiaries as at the dates thereof. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein and that the unaudited financial statements do not contain
notes thereto).
(b) The forecasts, pro forma financial information and financial
projections contained in the Confidential Information Memorandum are based on
the good faith assumptions of management of the Company and its subsidiaries,
which assumptions are believed by such management to be reasonable at the time
made; it being understood that such forecasts, information and projections do
not address the impact of any purchase accounting treatment required by GAAP as
a result of the Merger.
6.2 No Material Adverse Change. Since December 28, 2002, there has
been no change, development or event which has had, or would reasonably be
expected to have, a material adverse effect on the business, assets, properties,
condition (financial or otherwise) or results of operations of the U.S. Borrower
and its Subsidiaries, taken as a whole.
6.3 Existence; Compliance with Law. Each of Holdings, the U.S.
Borrower and each of its Subsidiaries (a) is duly organized and validly existing
under the laws of the jurisdiction of its incorporation, (b) is in good standing
under the laws of its jurisdiction of incorporation (to the extent such concept
is recognized in such jurisdiction) and has full power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold its properties
and assets and to carry on its business as presently conducted, other than any
such failures to be in good standing or such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
72
aggregate, would not reasonably be expected to have a Material Adverse Effect,
(c) is duly qualified and in good standing (to the extent such concept is
applicable in the applicable jurisdiction) to do business in each jurisdiction
in which the nature of its business or the ownership, leasing or holding of its
properties makes such qualification necessary, except such jurisdictions where
the failure so to qualify would not reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with all applicable statutes, laws,
ordinances, rules, orders, permits and regulations of any Governmental Authority
or instrumentality, domestic or foreign, except where noncompliance would not
reasonably be expected to have a Material Adverse Effect.
6.4 Power; Authorization. Each of Holdings, the U.S. Borrower and each
of its Subsidiaries has the power and authority to execute, deliver and perform
each of the Credit Documents to which it is a party, and each of the U.S.
Borrower and the Canadian Borrower has the power and authority and legal right
to borrow hereunder and, in the case of the U.S. Borrower only, to have Letters
of Credit issued for its account hereunder. Each of Holdings, the U.S. Borrower
and each of its Subsidiaries has taken all necessary action to authorize the
execution, delivery and performance of each of the Credit Documents to which it
is or will be a party and each of the U.S. Borrower and the Canadian Borrower
has taken all necessary action to authorize the borrowings hereunder and, in the
case of the U.S. Borrower only, the issuance of Letters of Credit for its
account hereunder. No consent or authorization of, or filing with, any
Governmental Authority is required in connection with the execution, delivery or
performance by Holdings, the U.S. Borrower or any of its Subsidiaries, or for
the validity or enforceability in accordance with its terms against Holdings,
the U.S. Borrower or any of its Subsidiaries, of any Credit Document except for
(i) such consents, authorizations and filings which have been obtained or made
and are in full force and effect, (ii) such consents, authorizations and
filings, the failure to obtain or perform which would not reasonably be expected
to have a Material Adverse Effect and (iii) such filings as are necessary to
perfect the Liens of the Lenders created pursuant to this Agreement and the
Security Documents.
6.5 Enforceable Obligations. This Agreement has been, and each of the
other Credit Documents has been or will be, duly executed and delivered on
behalf of each Credit Party that is party thereto. This Agreement constitutes,
and each of the other Credit Documents constitute, the legal, valid and binding
obligation of each Credit Party that is party thereto, and is enforceable
against each Credit Party that is party thereto in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
6.6 No Legal Bar. The execution, delivery and performance of each
Credit Document, the incurrence or issuance of and use of the proceeds of the
Loans and of drawings under the Letters of Credit and the transactions
contemplated by the Credit Documents, (a) will not violate any Requirement of
Law or any Contractual Obligation applicable to or binding upon any of Holdings,
the U.S. Borrower or any Subsidiary or any of their respective properties or
assets, in any manner which, individually or in the
73
aggregate, would reasonably be expected to have a Material Adverse Effect and
(b) will not result in the creation or imposition of any Lien on any of the
properties or assets of Holdings, the U.S. Borrower or any Subsidiary pursuant
to any Requirement of Law applicable to it, as the case may be, or any of its
Contractual Obligations, except for the Liens arising under the Security
Documents and Permitted Liens.
6.7 No Material Litigation. Other than as set forth on Schedule 6.7,
(i) no litigation by, investigation known to the U.S. Borrower by, or proceeding
of, any Governmental Authority is pending against Holdings, the U.S. Borrower or
any of its Subsidiaries (including after giving effect to the Transactions) with
respect to the Transactions or the validity, binding effect or enforceability of
any Credit Document, the Loans made hereunder, the use of proceeds thereof, or
of any drawings under a Letter of Credit and (ii) no lawsuits, claims,
proceedings or investigations are pending or, to the knowledge of the U.S.
Borrower, threatened against or affecting Holdings, the U.S. Borrower or any of
its Subsidiaries or any of their respective properties, assets, operations or
businesses (including after giving effect to the Transactions), which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
6.8 Investment Company Act; Public Utility Holding Company Act. None
of Holdings, the U.S. Borrower or any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company" (as each of the
quoted terms is defined or used in the Investment Company Act of 1940, as
amended) or (b) a "holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.9 Federal Reserve Regulation. No part of the proceeds of any of the
Loans or any drawing under a Letter of Credit will be used for any purpose which
violates the provisions of Regulation T, U or X of the Board. None of Holdings,
the U.S. Borrower or any of its Subsidiaries is engaged or will engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under said Regulation U.
6.10 No Default. Each of Holdings, the U.S. Borrower and each of its
Subsidiaries has performed all material obligations required to be performed by
it under its Contractual Obligations (including after giving effect to the
Transactions) and none of them is (with the lapse of time or the giving of
notice, or both) in breach or default in any respect thereunder, except to the
extent that such failure to perform, breach or default would not reasonably be
expected to have a Material Adverse Effect. None of Holdings, the U.S. Borrower
or any of its Subsidiaries (including after giving effect to the Transactions)
is in default under any judgment, order or decree of any Governmental Authority,
domestic or foreign, applicable to it or any of its properties, assets,
operations or business, except to the extent that any such defaults would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
74
6.11 Taxes. Each of Holdings, the U.S. Borrower and its Subsidiaries
has filed or caused to be filed all material tax returns required to have been
filed (taking into account applicable extension periods) by it and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority, other than
any such taxes, fees or charges (a) the amount or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves (or other sufficient provisions) in conformity with GAAP have
been provided on the books of Holdings, the U.S. Borrower or such Subsidiary, as
the case may be or (b) the failure of which to so pay would not reasonably be
expected to have a Material Adverse Effect.
6.12 Subsidiaries. The Subsidiaries of the U.S. Borrower and their
jurisdictions of incorporation and the percentage ownership interest of the U.S.
Borrower therein on the Closing Date are as set forth on Schedule 6.12. The
shares of Capital Stock of the Subsidiaries so indicated on Schedule 6.12 are
owned by the U.S. Borrower, directly or indirectly, free and clear of all Liens
(other than Liens created under the Security Documents).
6.13 Ownership of Property; Liens. Each of Holdings, the U.S. Borrower
and each of its Subsidiaries, has good and valid title to all of its material
assets (other than real property or interests in real property) in each case
free and clear of all Liens of any nature whatsoever except Permitted Liens.
With respect to real property or interests in real property, as of the Closing
Date each of Holdings, the U.S. Borrower and each of its Subsidiaries has (i)
fee title to all of the real property listed (together with the address thereof)
on Schedule 6.13 under the heading "Fee Properties" (each, a "Fee Property") and
(ii) good and valid title to the leasehold estates in all of the real property
leased by it and, in the case of any such leasehold estates located in the
United States with a base aggregate annual rent in excess of $50,000, listed
(together with the address thereof) on Schedule 6.13 under the heading "Leased
Properties" (each, a "Leased Property"), in each case, free and clear of all
Liens of any nature whatsoever, except (A) Permitted Liens and (B) as to Leased
Property, the terms and provisions of the respective lease therefor and any
matters affecting the fee title and any estate superior to the leasehold estate
related thereto, none of which interfere in any material respect with the
ability of the lessee of such Leased Property to utilize such Leased Property
for its intended purposes.
6.14 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan that would result
in a material liability to the U.S. Borrower or any of its Subsidiaries, and
each Plan has complied during such period in all material respects with the
applicable provisions of ERISA and the Code. Neither the U.S. Borrower nor any
Commonly Controlled Entity has been involved in any transaction that would cause
the U.S. Borrower or any of its Subsidiaries to be subject to material liability
with respect to a Plan to which the U.S. Borrower or any of its Subsidiaries or
any Commonly Controlled Entity contributed or was obligated to
75
contribute during the six-year period ending on the date this representation is
made or deemed made; or incurred any material liability under Title IV of ERISA
which would become or remain a material liability of the U.S. Borrower or any of
its Subsidiaries after the Closing Date. No termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
such five-year period ending on the date this representation is made or deemed
made that would result in a material liability to the U.S. Borrower or any of
its Subsidiaries. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount that would result in a material liability to
the U.S. Borrower or any of its Subsidiaries. Neither the U.S. Borrower, nor any
of its Subsidiaries nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan, and neither the U.S. Borrower,
nor any of its Subsidiaries nor any Commonly Controlled Entity would become
subject to any liability under ERISA if the U.S. Borrower or any of its
Subsidiaries or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made, in either case that
would result in a material liability to the U.S. Borrower or any of its
Subsidiaries. To the knowledge of the U.S. Borrower, no such Multiemployer Plan
is in Reorganization or Insolvent. The present value (determined using actuarial
and other assumptions which are reasonable in respect of the benefits provided
and the employees participating) of the liability of the U.S. Borrower, its
Subsidiaries and each Commonly Controlled Entity for post retirement benefits to
be provided to their current and former employees under Plans which are welfare
benefit plans (as defined in Section 3(1) of ERISA) does not, in the aggregate,
exceed the assets under all such Plans allocable to such benefits by an amount
that would result in a material liability to the U.S. Borrower or any of its
Subsidiaries except as disclosed in the audited financial statements of the U.S.
Borrower and its consolidated Subsidiaries provided to the Lenders prior to the
Closing Date. For purposes of this subsection 6.14, a material liability means a
liability that would have a Material Adverse Effect.
6.15 Collateral Documents. (a) The Collateral Agreement is effective
to create in favor of the Administrative Agent, for the ratable benefit of the
Lenders, a legal, valid and enforceable security interest in the pledged stock
described therein (to the extent such matter is governed by the law of the
United States or a jurisdiction therein) and, when stock certificates
representing or constituting the pledged stock described in the Collateral
Agreement are delivered to the Administrative Agent, such security interest
shall constitute a perfected first lien on, and security interest in, all right,
title and interest of the pledgor party thereto in the pledged stock described
therein (to the extent such matter is governed by the law of the United States
or a jurisdiction therein).
(b) Each of the Collateral Agreement and the Canadian Collateral
Agreement is effective to create in favor of the Applicable Administrative
Agent, for the ratable benefit of the applicable Lenders, a legal, valid and
enforceable security interest in the collateral described therein (to the extent
such matter is governed by the law of the United States or a jurisdiction
therein or Canada, as applicable), and Uniform
76
Commercial Code or PPSA, as applicable, financing statements have been filed in
each of the jurisdictions listed on Schedule 6.15(b), or arrangements have been
made for such filing in such jurisdictions, and upon such filing, and upon the
taking of possession of, or obtaining control over, by the Applicable
Administrative Agent of any such collateral the security interests in which may
be perfected only by possession or by obtaining control, such security interests
will, subject to the existence of Permitted Liens, constitute perfected first
priority liens on, and security interests in, all right, title and interest of
the debtor party thereto in the collateral described therein, except to the
extent that a security interest cannot be perfected therein by the filing of a
financing statement or the taking of possession or by obtaining control under
the Uniform Commercial Code or PPSA, as applicable, of the relevant
jurisdiction.
(c) Upon execution and delivery thereof by the relevant Credit Party,
each Mortgage will be effective to create in favor of the Administrative Agent,
for the ratable benefit of the Lenders, a legal, valid and enforceable security
interest in the collateral described therein, and upon recording the Mortgages
in the jurisdictions listed on Schedule 6.13 (or, in the case of a Mortgage
delivered pursuant to subsection 8.9, the jurisdiction in which the property
covered by such Mortgage is located), such security interests will, subject to
the existence of Permitted Liens, constitute first liens on, and perfected
security interests in, all right, title and interest of the debtor party thereto
in the collateral described therein.
6.16 Copyrights, Patents, Permits, Trademarks and Licenses. Schedule
6.16 sets forth a true and complete list as of the Closing Date of all material
registered trademarks, trade names, service marks, patents, pending patent
applications and registered copyrights and applications therefor owned, used or
filed by or licensed to Holdings, the U.S. Borrower and its Subsidiaries (after
giving effect to the Transactions) and, with respect to registered trademarks
(if any), contains a list of all jurisdictions in which such trademarks are
registered or applied for and all registration and application numbers.
Holdings, the U.S. Borrower or one of its Subsidiaries (after giving effect to
the Transactions) owns or has the right to use, registered trademarks, trade
names, service marks, patents, pending patent applications and copyrights and
applications therefor listed on Schedule 6.16, except those with respect to
which the failure of such Person to own or have the right to use would not
reasonably be expected to have a Material Adverse Effect. Except as set forth on
Schedule 6.16, to the knowledge of the U.S. Borrower, no claims are pending by
any Person with respect to Holdings', the U.S. Borrower's or any Subsidiary's
use or ownership of any such registered trademarks, trade names, service marks,
patents, pending patent applications and copyrights, or applications therefor,
or that allege that any such use infringes any similar rights owned or alleged
to be owned by others, in any jurisdiction, domestic or foreign, except to the
extent such claims, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
6.17 Environmental Matters. Except insofar as any exceptions to the
following, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect:
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(a) to the knowledge of the U.S. Borrower, the properties owned,
leased, or otherwise operated by the U.S. Borrower or any of its Subsidiaries do
not contain, and have not previously contained, in, on or under, including,
without limitation, the soil and groundwater thereunder, any Hazardous Materials
in amounts or concentrations that constitute or constituted a violation of, or
could reasonably give rise to liability under, Environmental Laws;
(b) to the knowledge of the U.S. Borrower, the properties owned or
leased, or otherwise operated by the U.S. Borrower or any of its Subsidiaries
and all operations and facilities at such properties are in compliance with all
Environmental Laws;
(c) none of Holdings, the U.S. Borrower or any of its Subsidiaries has
received or is aware of any written complaint, notice of violation, alleged
violation, or notice of investigation or of potential liability under
Environmental Laws with regard to Holdings, the U.S. Borrower or its
Subsidiaries, nor does any of Holdings, the U.S. Borrower or any of its
Subsidiaries have knowledge that any such action is being contemplated,
considered or threatened;
(d) to the knowledge of the U.S. Borrower, Hazardous Materials have
not been generated, treated, stored or disposed of at, on or under any
properties presently or formerly owned, leased, or otherwise operated by
Holdings, the U.S. Borrower or any of its Subsidiaries, nor have any Hazardous
Materials been transported from any such property, or come to be located at any
other property, in violation of or in a manner that could reasonably give rise
to liability under any Environmental Laws; and
(e) there are no governmental administrative actions or judicial
proceedings pending or, to the knowledge of the U.S. Borrower, threatened under
any Environmental Law to which Holdings, the U.S. Borrower or any of its
Subsidiaries is a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements, other than permits authorizing operations by the U.S.
Borrower or any of its Subsidiaries, outstanding under any Environmental Law.
6.18 Accuracy and Completeness of Information. The factual statements
contained in any certificates or documents furnished or to be furnished to the
Applicable Administrative Agent or the Lenders from time to time in connection
with this Agreement, taken as a whole, do not and will not, to the knowledge of
the U.S. Borrower, as of the date when made, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances in which the same were made, all except as otherwise qualified
herein or therein, such knowledge qualification being given only with respect to
factual statements made by Persons other than Holdings, the U.S. Borrower or any
of its Subsidiaries; provided that with respect to projected financial
information, financial estimates, forecasts, and other forward-looking
information, the U.S. Borrower represents only that such information has been
and will be prepared in
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good faith based upon assumptions believed by the U.S. Borrower to be reasonable
at the time made.
6.19 Solvency. Each Credit Party is, and after giving effect to the
Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be, Solvent.
6.20 Labor Matters. As of the Closing Date, there are no strikes,
lockouts or slowdowns against Holdings, the U.S. Borrower or any Subsidiary
pending or, to the knowledge of Holdings or the U.S. Borrower, threatened. The
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which Holdings, the U.S. Borrower or any Subsidiary is
bound. Except to the extent any of the following, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(a) the hours worked by and payments made to employees of Holdings, the U.S.
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters and (b) all payments due from Holdings, the U.S.
Borrower or any Subsidiary, or for which any claim may be made against Holdings,
the U.S. Borrower or any Subsidiary, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of Holdings, the U.S. Borrower or such Subsidiary.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Initial Loans and Letters of Credit. The obligation
of each Lender to make its Loans, and the obligation of the Issuing Lender to
issue any Letter of Credit, on the Closing Date are subject to the satisfaction,
or waiver by such Lender, immediately prior to or concurrently with the making
of such Loans or the issuance of such Letters of Credit, as the case may be, of
the following conditions:
(a) Agreement; Notes. The Administrative Agent shall have received (i)
six counterparts of this Agreement duly executed and delivered by a duly
authorized officer of the U.S. Borrower, (ii) for the account of each Revolving
Credit Lender requesting the same pursuant to subsection 5.13(f), a Revolving
Credit Note of the U.S. Borrower conforming to the requirements hereof and
executed by a duly authorized officer of U.S. Borrower, (iii) for the account of
each Term Loan Lender requesting the same pursuant to subsection 5.13(f), a
Closing Date Term Note of the U.S. Borrower conforming to the requirements
hereof and executed by a duly authorized officer of U.S. Borrower, (iv) for the
account of each Canadian Lender requesting the same pursuant to subsection
5.13(f), a C$ Note of the Canadian Borrower conforming to the requirements
hereof and executed by a duly authorized officer of the Canadian Borrower, and
(v) if requested by the Swing Line Lender, for the account of the Swing Line
Lender, a Swing Line Note, conforming to the requirements hereof and executed by
a duly authorized officer of the U.S. Borrower.
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(b) Transactions. (i) The Merger shall be consummated pursuant to the
Merger Agreement simultaneously with the Closing Date and (ii) no material
provision of the Merger Agreement shall have been amended, supplemented, waived
or otherwise modified in any material respect without the prior written consent
of the Administrative Agent, which consent shall not be unreasonably withheld.
(c) Capitalization; Capital Structure. (i) Holdings shall have
contributed to the U.S. Borrower, in exchange for the issuance to Holdings of
100% of the issued and outstanding common stock of the U.S. Borrower (the
"Equity Contribution"), an amount in cash contributed as equity by the Investor
Group to Holdings representing at least 30% of the total funds necessary to
consummate the Transactions; and
(ii) the capitalization, structure and equity ownership of
Holdings and the U.S. Borrower, in each case after giving effect to the
consummation of the Merger, shall be in form and substance reasonably
satisfactory to the Administrative Agent.
The execution and delivery of this Agreement by the Lenders and the
Administrative Agent shall be deemed to evidence the satisfaction of the Lenders
and the Administrative Agent with such of the matters referenced and in clauses
(i) and (ii) of this paragraph (c) as shall have been disclosed and made
available to the Administrative Agent prior to the date hereof.
(d) Financial Statements. The Administrative Agent shall have received
(i) the financial statements and report referred to in subsection 6.1 and (ii)
the unaudited consolidated balance sheet and related statements of income,
stockholders' equity and cash flows of the Company and its consolidated
Subsidiaries as of and for each fiscal month ended subsequent to the date of the
most recent unaudited quarterly financial statements furnished under subsection
6.1 and at least 30 days before the Closing Date, certified by a Responsible
Officer of the Company.
(e) Fees; Expenses. The Administrative Agent and the Lenders shall
have received payment of all fees required to be paid or delivered on or before
the Closing Date. The Administrative Agent shall have received payment of all
costs and expenses required to be paid on the Closing Date.
(f) Lien Searches; Lien Perfection. (i) The Administrative Agent shall
have received the results of searches of Uniform Commercial Code, PPSA, tax and
judgment filings made with respect to the Company and its subsidiaries in the
jurisdictions set forth on Schedule 6.15(b), together with copies of financing
statements disclosed by such searches and such searches shall disclose no Liens
on any assets encumbered by any Security Document, except for Liens permitted
hereunder or, if unpermitted Liens are disclosed, the Administrative Agent shall
have received satisfactory evidence of the release of such Liens and (ii) the
Administrative Agent shall have received duly executed financing statements on
Form UCC-1 and verification
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statements under the PPSA, necessary to perfect the Liens created by the
Security Documents.
(g) Collateral Agreements. The Administrative Agent shall have
received the Collateral Agreement and the Canadian Collateral Agreement, in each
case executed and delivered by a duly authorized officer of the parties thereto,
together with stock certificates representing 100% (or 65%, in the case of
Foreign Subsidiaries of the U.S. Borrower) of all issued and outstanding
certificated shares of Capital Stock of each Domestic Subsidiary and each direct
Foreign Subsidiary of the U.S. Borrower, and undated stock powers for each
certificate, executed in blank and delivered by a duly authorized officer of the
applicable pledgor and the acknowledgment and consent of the issuer thereunder
in the form annexed thereto.
(h) Preferred Stock; Indebtedness. After giving effect to the
Transactions, the U.S. Borrower and its Subsidiaries shall have no (i)
outstanding preferred stock (other than the Preferred Stock, with a liquidation
preference on the Closing Date of approximately $93,500,000) or (ii)
Indebtedness other than any Indebtedness permitted under Section 9.1 hereof.
(i) Guarantees. The Administrative Agent shall have received (i) the
Holdings Guarantee, duly executed and delivered by Holdings and (ii) the
Canadian Guarantee, duly executed and delivered by Holdings and the U.S.
Borrower.
(j) Merger Agreement. The Administrative Agent shall have received the
Merger Agreement, executed and delivered by a duly authorized officer of the
parties thereto.
(k) Legal Opinions. The Administrative Agent shall have received,
dated the Closing Date and addressed to the Administrative Agent and the
Lenders, (i) an opinion of Weil, Gotshal & Xxxxxx LLP, special counsel to the
Credit Parties, in substantially the form of Exhibit J-1, (ii) an opinion of the
general counsel of the U.S. Borrower, in substantially the form of Exhibit J-2
and (iii) an opinion of Xxxxxx, XxxXxxxx & Thorvaldson, special Canadian counsel
to the Credit Parties, in substantially the form of Exhibit J-3.
(l) Closing Certificate. The Administrative Agent shall have received
a Closing Certificate of the U.S. Borrower and each other Credit Party dated the
Closing Date, in substantially the form of Exhibits K-1 and K-2, respectively,
with appropriate insertions and attachments, in form and substance satisfactory
to the Administrative Agent and its counsel, executed by the President or any
Vice President and the Secretary or any Assistant Secretary (or other
appropriate officers or representatives) of the U.S. Borrower and the other
Credit Parties, respectively.
(m) Solvency Certificate. The Administrative Agent shall have received
a certificate of the chief financial officer or treasurer of the Company in form
and substance reasonably satisfactory to it which shall document the solvency of
the
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Company and its Subsidiaries after giving effect to the consummation of the
Transactions and the other transactions and related financings contemplated
hereby.
(n) Insurance. The Administrative Agent shall have received (i) a
schedule describing all insurance (including but not limited to business
interruption insurance as reasonably requested by the Administrative Agent)
maintained by Holdings, the U.S. Borrower and its Subsidiaries pursuant to
subsection 8.5 and (ii) certificates for each primary liability and property
insurance policy set forth on such schedule insuring against casualty and other
usual and customary risks.
(o) Other Agreements. The Administrative Agent shall have received
each additional document or instrument reasonably requested by the Required
Lenders.
(p) Litigation. On the Closing Date, there shall be no Legal
Requirement (as defined in the Merger Agreement) in effect that prohibits or
materially restrains the consummation of the Transactions.
(q) Consents, Approvals and Filings. The waiting period under the
Xxxx-Xxxxx-Xxxxxx Act shall have expired and the shareholders of the Company
entitled to vote thereon shall have approved the consummation of the
transactions contemplated by the Merger Agreement. Except for the recording of
the Mortgages and the filing of financing statements contemplated by the
Collateral Agreement, on the Closing Date, all necessary governmental and other
third party authorizations, consents, approvals or waivers required in
connection with the Transactions shall have been obtained or made and remain in
full force and effect (except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect).
(r) Consolidated EBITDA. The Administrative Agent shall be satisfied
that the Leverage Ratio for the twelve month period ending May 30, 2003 shall be
no greater than 5.0 to 1.0 (it being understood that notwithstanding the failure
of this condition to be satisfied, so long as all other conditions set forth
herein are satisfied, the U.S. Borrower shall be entitled to borrow an aggregate
amount not less than $475,000,000 (plus amounts necessary to refinance revolving
borrowings and letters of credit outstanding or issued, as applicable, under the
Existing Credit Agreement) under this Agreement on the Closing Date).
(s) Repayment of Existing Credit Facility; Other Indebtedness. All
amounts due or outstanding under the Existing Credit Agreement shall have been
paid in full or cash collateralized to the satisfaction of the administrative
agent thereunder, the commitments thereunder terminated and all guarantees
thereof or security therefor released and discharged.
(t) No Conflict; Default. The consummation of the Transactions shall
not conflict with, or result in a default or event of default, prepayment event,
or the imposition of any Lien, under any material Contractual Obligation of
Holdings, the U.S. Borrower, the Company or any of their respective
Subsidiaries.
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(u) Representations and Warranties. The representations and warranties
set forth in Section 6 shall be true and correct; provided that this condition
shall be satisfied unless any and all inaccuracies in such representations and
warranties, in the aggregate, would result in a "Material Adverse Effect" (as
defined in the Merger Agreement).
(v) Notice of Borrowing. The U.S. Borrower or the Canadian Borrower,
as applicable, shall have delivered to the Administrative Agent, the Canadian
Administrative Agent and the Issuing Lender, as applicable, notices of
borrowing, or a request for the issuance of one or more Letters of Credit, in
respect of extensions of credit to be made under this Agreement on the Closing
Date.
7.2 Conditions to All Post-Closing Date Loans (Other than the Change
of Control Loans) and Letters of Credit. The obligation of each Lender to make
any Loan after (but not on) the Closing Date (other than any Revolving Credit
Loan the proceeds of which are to be used to repay Refunded Swing Line Loans and
the Change of Control Loans), the obligation of the Issuing Lender to issue,
amend, renew or extend any Letter of Credit and the obligation of the Canadian
Lenders to accept or purchase any Bankers' Acceptance is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date (or Borrowing Date (Canada), as applicable):
(a) Representations and Warranties. Each of the representations and
warranties made in or pursuant to Section 6 or which are contained in any other
Credit Document shall be true and correct in all material respects on and as of
the date of such Loan, of the acceptance of such Bankers' Acceptance or of the
issuance of such Letter of Credit as if made on and as of such date (unless
stated to relate to a specific earlier date, in which case, such representations
and warranties shall be true and correct in all material respects as of such
earlier date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such Borrowing Date (or Borrowing Date
(Canada), as applicable) or after giving effect to such Loan to be made, such
Bankers' Acceptance to be accepted or such Letter of Credit to be issued on such
Borrowing Date (or Borrowing Date (Canada), as applicable).
(c) Notices of Borrowing. The U.S. Borrower or Canadian Borrower, as
the case may be, shall have delivered to the Administrative Agent, the Canadian
Administrative Agent or the Issuing Lender, as the case may be, the notices
required by subsections 3.4, 3.5, 4.2, 4.3 or 5.1, as applicable.
Each such borrowing by the U.S. Borrower or the Canadian Borrower hereunder and
the issuance of each Letter of Credit by the Issuing Lender hereunder shall
constitute a representation and warranty by the U.S. Borrower as of the date of
such borrowing or issuance that the conditions in clauses (a) and (b) and of
this subsection 7.2 have been satisfied.
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7.3 Conditions to Borrowing of the Change of Control Loans. The
obligation of each Lender to make a Change of Control Loan on the Change of
Control Payment Date is subject only to (a) receipt by the Administrative Agent
of the notice required by subsection 5.1 with respect to such Loan and
specifying the Existing Note Payment Amount and (b) the terms, conditions and
documentation of the Bridge Loan Agreements (if borrowings thereunder are
required in order to make the Change of Control Payments) being in form and
substance reasonably satisfactory to the Administrative Agent; provided that if
no Existing Notes are to be purchased pursuant to the Existing Notes Change of
Control Offer, then no Change of Control Loans shall be made hereunder.
SECTION 8. AFFIRMATIVE COVENANTS
Each of Holdings and the U.S. Borrower hereby agrees that, so long as
the Commitments remain in effect, any Loan, Bankers' Acceptance, Note or L/C
Obligation remains outstanding and unpaid, any amount (unless either cash in an
amount equal to such amount has been deposited to a cash collateral account
established by the Administrative Agent or such L/C Obligation is supported by a
Backstop L/C) remains available to be drawn under any Letter of Credit or any
other amount is owing to any Lender or either of the Administrative Agents
hereunder or under any of the other Credit Documents, it shall, and, in the case
of the agreements contained in subsections 8.3 through 8.6, and 8.8 through 8.9,
it shall cause each of its Subsidiaries to:
8.1 Financial Statements. Furnish to the Administrative Agent (which
furnishing may be made to the Administrative Agent via a secured internet web
page reasonably acceptable to the Administrative Agent or via delivery of a hard
copy to the Administrative Agent, which the Administrative Agent shall promptly
furnish to each Lender):
(a) as soon as available, but in any event within 95 days after the
end of each Fiscal Year of the U.S. Borrower to end after the Closing Date, a
copy of the consolidated balance sheet of the U.S. Borrower and its consolidated
Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of stockholders' equity and cash flows and the consolidated
statements of income of the U.S. Borrower and its consolidated Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the figures for
the previous year and, in the case of the consolidated balance sheet referred to
above, reported on, without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
independent certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 50 days
after the end of each of the first three Fiscal Quarters of the U.S. Borrower to
end after the Closing Date, the unaudited consolidated balance sheet of the U.S.
Borrower and its Subsidiaries as at the end of each such quarter and the related
unaudited consolidated statements of income and cash flows of the U.S. Borrower
and its consolidated Subsidiaries for such quarterly period and the portion of
the Fiscal Year of the U.S. Borrower through such date, setting forth in each
case in comparative form the figures for
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the corresponding quarter in, and year to date portion of, the previous year,
and the figures for such periods in the budget prepared by the U.S. Borrower and
furnished to the Administrative Agent, certified by the chief financial officer,
controller or treasurer of the U.S. Borrower as being fairly stated in all
material respects;
(c) as soon as available, but in any event not later than 45 days
after the beginning of each Fiscal Year of the U.S. Borrower to end after the
Closing Date, to which such budget relates, a preliminary consolidated operating
budget for the U.S. Borrower and its Subsidiaries taken as a whole; and as soon
as available, any material revision to or any final revision of any such
preliminary annual operating budget or any such consolidated operating budget;
and
(d) concurrently with the delivery of financial statements pursuant to
subsection 8.1(a) or (b), a certificate of the chief financial officer,
controller or treasurer of the U.S. Borrower setting forth, in reasonable
detail, the computations of Capital Expenditures as of the last day of the
fiscal period covered by such financial statements, the Leverage Ratio as of
such last day, the Senior Leverage Ratio as of such last day, and the Interest
Coverage Ratio as of such last day;
all such financial statements and budgets to be prepared in reasonable detail
and, in the case of the financial statements referred to in paragraphs (a) and
(b) of this subsection 8.1, complete and correct in all material respects
(subject, in the case of interim statements, to normal year-end audit
adjustments) and in accordance with GAAP.
8.2 Certificates; Other Information. Furnish to the Administrative
Agent (which the Administrative Agent shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in subsection 8.1(a), a letter from the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary to express their opinion on such financial
statements no knowledge was obtained of any Default or Event of Default, except
as specified in such letter (which letter may be limited to accounting matters
and disclaim responsibility for legal interpretations);
(b) within 15 days of the delivery of the financial statements
referred to in subsections 8.1(a) and (b) (except that the certificate referred
to in clause (i)(z) below shall be delivered concurrently with such financial
statements), a certificate of the chief financial officer, controller or
treasurer of the U.S. Borrower (i) stating that, to such officer's knowledge,
during such period (x) no Subsidiary has been formed or acquired (or, if any
such Subsidiary has been formed or acquired, the U.S. Borrower has complied with
the requirements of subsection 8.9 with respect thereto), (y) none of Holdings,
the U.S. Borrower or any of its Subsidiaries has changed its name or
jurisdiction of formation or incorporation, as applicable, without complying
with the requirements of this Agreement and the Security Documents with respect
thereto and (z) that no Default or Event of Default has occurred or, if a
Default or Event of Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be
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taken with respect thereto, (ii) showing in detail as of the end of the related
fiscal period the figures and calculations supporting such statement in respect
of subsections 9.7, 9.9, 9.10 and 9.11 (and in the case of a certificate
delivered in respect of the financial statements referred to in subsection
8.1(a), setting forth the U.S. Borrower's calculation of Excess Cash Flow);
(iii) identifying any owned Real Property of Holdings, the U.S. Borrower or a
Domestic Subsidiary of the U.S. Borrower acquired during such accounting period
that, together with any improvements thereon, has a value of at least $5,000,000
and (iv) identifying any application for any patent or for the registration of
any trademark filed by Holdings, the U.S. Borrower or a Domestic Subsidiary of
the U.S. Borrower, in each case either by itself or through any agent, employee,
licensee or designee, with the United States Patent and Trademark Office or any
similar office or agency in any other country or any political subdivision
thereof, during such accounting period;
(c) promptly upon receipt thereof, copies of all final reports
submitted to Holdings, the U.S. Borrower or to any of its Subsidiaries by
independent certified public accountants in connection with each annual audit of
the books of the U.S. Borrower or any of its Subsidiaries made by such
accountants, and, upon the request of any Lender (through the Administrative
Agent), any final comment letter submitted by such accountants to management in
connection with their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available to the
public generally by Holdings, the U.S. Borrower or any of its Subsidiaries, if
any, and all regular and periodic reports and all final registration statements
and final prospectuses, if any, filed by Holdings, the U.S. Borrower or any of
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority succeeding to any of its
functions;
(e) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and (b), a management summary describing and
analyzing the performance of Holdings, the U.S. Borrower and its Subsidiaries
during the periods covered by such financial statements;
(f) within 50 days after the end of each Fiscal Quarter of the U.S.
Borrower, a summary of all Asset Sales during such Fiscal Quarter including the
amount of all Net Proceeds from such Asset Sales not previously applied to
prepayments of the Term Loans pursuant to the proviso to subsection 5.4(b)(iii);
and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request (through the Administrative
Agent, which request the Administrative Agent shall promptly by forward to the
U.S. Borrower).
8.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations and liabilities of whatever nature, except (a) when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in
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conformity with GAAP with respect thereto have been provided on the books of the
U.S. Borrower or any of its Subsidiaries, as the case may be, (b) for trade and
other accounts payable in the ordinary course of business which are not overdue
for a period of more than 90 days or, if overdue for more than 90 days, as to
which a dispute exists and adequate reserves in conformity with GAAP have been
established on the books of the U.S. Borrower or any of its Subsidiaries, as the
case may be, and (c) obligations or liabilities the failure of which to pay,
discharge or otherwise satisfy would not, in the aggregate, reasonably be
expected to (i) give rise to a Lien that would not be a Permitted Lien or (ii)
have a Material Adverse Effect.
8.4 Conduct of Business and Maintenance of Existence. Preserve, renew
and keep in full force and effect its corporate existence and take all
reasonable action to maintain all material rights, material privileges,
franchises, copyrights, patents, trademarks and trade names necessary or
desirable in the normal conduct of its business except for rights, privileges,
franchises, copyrights, patents, trademarks and trade names the loss of which
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect, and except as otherwise permitted by subsections 9.4 and 9.5; and comply
with all applicable Requirements of Law except to the extent that the failure to
comply therewith would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition (ordinary wear
and tear and casualty and condemnation excepted) except to the extent that the
failure to maintain such property would not reasonably be expected to have a
Material Adverse Effect; and
(b) Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks (but
including, in any event, public liability and business interruption insurance)
as are usually insured against in the same general area by, companies of the
same or similar size of the U.S. Borrower engaged in the same or a similar
business; cause all insurance maintained pursuant to this subsection 8.5(b) (i)
to provide that no cancelation, material reduction in amount or material change
in coverage thereof shall be effective until at least 30 days after receipt by
the Administrative Agent of written notice thereof, (ii) to name the
Administrative Agent as insured party or loss payee and (iii) to be reasonably
satisfactory in all other respects to the Administrative Agent; and furnish to
the Administrative Agent (which furnishing may be made to the Administrative
Agent via a secured internet web page reasonably acceptable to the
Administrative Agent or via electronic mail), upon written request, full
information as to the insurance carried; provided that the U.S. Borrower may
implement programs of self insurance in the ordinary course of business and in
accordance with industry standards for a company of similar size so long as
reserves are maintained in accordance with GAAP for the liabilities associated
therewith.
8.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial
87
statements to be prepared in conformity with GAAP and all Requirements of Law;
and permit representatives of any Lender upon reasonable notice (made through
the Administrative Agent) to visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any reasonable time and
as often as may reasonably be requested (which may not be more frequently than
quarterly unless a Default or Event of Default shall have occurred and be
continuing) upon reasonable notice, and to discuss the business, operations,
assets and financial and other condition of the U.S. Borrower and its
Subsidiaries with officers and employees thereof and with their independent
certified public accountants with prior reasonable notice to, and coordination
with, the chief financial officer or the treasurer of the U.S. Borrower and
provided that a member of management may be present at such meeting.
8.7 Notices. Promptly give notice to the Administrative Agent (to be
distributed by the Administrative Agent to the Lenders):
(a) of the occurrence of any Default or Event of Default;
(b) of any litigation, investigation or proceeding which may exist at
any time between Holdings, the U.S. Borrower or any of its Subsidiaries and any
Governmental Authority, or receipt of any notice of any environmental claim or
assessment against Holdings, the U.S. Borrower or any of its Subsidiaries by any
Governmental Authority, which in any such case would reasonably be expected to
have a Material Adverse Effect;
(c) of any litigation or proceeding against Holdings, the U.S.
Borrower or any of its Subsidiaries (i) in which more than $10,000,000 of the
amount claimed is not covered by insurance, or (ii) in which injunctive or
similar relief is sought which if obtained would reasonably be expected to have
a Material Adverse Effect;
(d) of the following events, as soon as practicable after, and in any
event within 30 days after, the U.S. Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any Plan
which Reportable Event could reasonably result in material liability to
Holdings, the U.S. Borrower and its Subsidiaries taken as a whole or (ii) the
institution of proceedings or the taking of any other action by PBGC, the U.S.
Borrower or any Commonly Controlled Entity to terminate, withdraw or partially
withdraw from any Plan and, with respect to a Multiemployer Plan, the
Reorganization or Insolvency of such Plan, in each of the foregoing cases which
could reasonably result in material liability to Holdings, the U.S. Borrower and
its Subsidiaries taken as a whole, and in addition to such notice, deliver to
the Administrative Agent and each Lender whichever of the following may be
applicable: (A) a certificate of a Responsible Officer of the U.S. Borrower
setting forth details as to such Reportable Event and the action that the U.S.
Borrower or such Commonly Controlled Entity proposes to take with respect
thereto, together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (B) any notice delivered by PBGC evidencing
its intent to institute such proceedings or any notice to PBGC that such Plan is
to be terminated, as the case may be;
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(e) concurrently with the delivery of the information delivered
pursuant to subsection 8.2(f) and each prepayment required pursuant to
subsection 5.4(b)(iii), of any Asset Sale or substantially like-kind exchange of
real property by the U.S. Borrower or any of its Subsidiaries;
(f) of the occurrence of any event that has had, or would reasonably
be expected to have, a material adverse effect on the aggregate value of the
Collateral; and
(g) of any development that has had, or would reasonably be expected
to have, a Material Adverse Effect.
Each notice pursuant to this subsection 8.7 shall be accompanied by a statement
of a Responsible Officer of the U.S. Borrower setting forth details of the
occurrence referred to therein and (in the cases of clauses (a) through (d))
stating what action the U.S. Borrower proposes to take with respect thereto.
8.8 Environmental Laws. (i) Comply with all Environmental Laws
applicable to it, and obtain, comply with and maintain any and all Environmental
Permits necessary for the conduct of its operations; and (ii) take reasonable
efforts to ensure that all of its tenants, subtenants, contractors,
subcontractors and invitees comply with all Environmental Laws, and obtain,
comply with and maintain any and all Environmental Permits, applicable to any of
them insofar as any failure to so comply, obtain or maintain as set forth in (i)
and (ii) above would reasonably be expected to result in a Material Adverse
Effect. Noncompliance by the U.S. Borrower or any of its Subsidiaries with any
applicable Environmental Law or Environmental Permit shall be deemed not to
constitute a breach of this subsection 8.8, so long as, upon learning of any
such noncompliance, the U.S. Borrower and its Subsidiaries shall promptly
undertake reasonable efforts to achieve compliance or to contest by appropriate
proceedings any alleged noncompliance and provided that, in any case, such
noncompliance, and any other noncompliance with Environmental Law and any
contesting of allegations of noncompliance with Environmental Laws, individually
or in the aggregate, after giving effect to any compliance efforts undertaken,
would not reasonably be expected to give rise to a Material Adverse Effect.
8.9 Additional Collateral. (a) Subject to subsection 8.9(d), with
respect to any assets acquired after the Closing Date by Holdings, the U.S.
Borrower, any of its Domestic Subsidiaries or the Canadian Borrower or the
Canadian Subsidiaries that are intended to be subject to the Lien created by any
of the Security Documents but which are not so subject (but, in any event,
excluding (i) any assets described in paragraph (b) or (c) of this subsection
and (ii) assets acquired or owned pursuant to subsection 9.6(h)), promptly (and
in any event within 30 days after the acquisition thereof): (i) execute and
deliver to the Administrative Agent such amendments or supplements to the
relevant Security Documents or such other documents as the Administrative Agent
shall deem necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a Lien on such assets, and (ii) take all actions
necessary or advisable to cause such Lien to be duly perfected to the extent
required by
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such Security Document in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent.
(b) With respect to any Person that is or becomes a Subsidiary (other
than any Foreign Subsidiary of the U.S. Borrower) that has material assets,
promptly (and in any event within 30 days after such Person becomes a
Subsidiary): (i) execute and deliver to the Administrative Agent, for the
benefit of the Lenders, a new pledge agreement or such amendments to the
relevant Security Agreement as the Administrative Agent reasonably shall deem
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by
the U.S. Borrower or any of its Subsidiaries, (ii) deliver to the Administrative
Agent the certificates, if any, representing such Capital Stock, together with
undated stock powers executed and delivered in blank by a duly authorized
officer of the U.S. Borrower or such Subsidiary, as the case may be, and (iii)
cause such new Subsidiary (A) to execute and deliver to the Administrative Agent
an assumption agreement, substantially in the form annexed to the Collateral
Agreement, that results in such Subsidiary becoming a party to the Subsidiary
Guarantee and the Collateral Agreement (or such comparable documentation which
is in form and substance reasonably satisfactory to the Administrative Agent),
and (B) to take all actions necessary or advisable to cause the Lien created by
the Collateral Agreement to be duly perfected to the extent required by such
agreement in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be reasonably requested by the Administrative Agent.
(c) With respect to any Person that is or becomes a direct Foreign
Subsidiary of the U.S. Borrower and that has material assets, promptly (and in
any event within 30 days after such Person becomes a Subsidiary): (i) execute
and deliver to the Administrative Agent a new pledge agreement or such
amendments to the relevant Security Agreement as the Administrative Agent
reasonably shall deem necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a Lien on the Capital Stock of such
Subsidiary which is owned by the U.S. Borrower or any of its Subsidiaries
(provided that in no event shall more than 65% of the Capital Stock of any such
Foreign Subsidiary be required to be so pledged), and (ii) if such Capital Stock
is issued in certificated form, deliver to the Administrative Agent any
certificates representing such Capital Stock, together with undated stock powers
executed and delivered in blank by a duly authorized officer of the U.S.
Borrower or such Subsidiary, as the case may be, and take or cause to be taken
all such other actions under the law of the jurisdiction of organization of such
Foreign Subsidiary as may be necessary or advisable to perfect such Lien on such
Capital Stock, and if reasonably requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described in
clauses (i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) Upon the request of the Administrative Agent, the U.S. Borrower
shall, and shall cause its Domestic Subsidiaries to, promptly grant to the
Administrative
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Agent, within 60 days of such request, security interests and Mortgages in such
owned real property of the U.S. Borrower and its Domestic Subsidiaries as are
acquired after the Closing Date by the U.S. Borrower or such Subsidiary and
that, together with any improvements thereon, individually have a value of at
least $5,000,000 (based on the purchase price thereof if such real estate is the
only asset being purchased in such transaction, otherwise the determination of
value shall be made by the U.S. Borrower in good faith), as additional security
for the obligations of the Credit Parties under any Credit Document (unless the
subject property is already mortgaged to a third party to the extent permitted
by subsection 9.2). Such Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
shall constitute valid and enforceable perfected Liens subject only to Permitted
Liens and such other Liens reasonably acceptable to the Administrative Agent.
The Mortgages or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Administrative Agent required to
be granted pursuant to the Mortgages and all taxes, fees and other charges
payable in connection therewith shall be paid by the U.S. Borrower in full. If
requested by the Administrative Agent or the Required Lenders, the U.S. Borrower
shall provide a lender's title policy with respect to each such Mortgage paid
for by the U.S. Borrower, issued by a nationally recognized title insurance
company, together with such endorsements, coinsurance and reinsurance as may be
reasonably requested by the Administrative Agent, in form and substance
reasonably acceptable to the Administrative Agent, insuring each Mortgage as a
first lien on the relevant Mortgaged Property and subject only to Liens
expressly agreed to by the Administrative Agent.
(e) With respect to any Person that is or becomes a Canadian
Subsidiary that has material assets, promptly (and in any event within 30 days
after such Person becomes a Canadian Subsidiary), execute and deliver to the
Canadian Administrative Agent an assumption agreement, substantially in the form
of the assumption agreement annexed to the Canadian Collateral Agreement, that
results in such Person becoming a party to (i) the Canadian Subsidiary Guarantee
and (ii) the Canadian Collateral Agreement.
(f) The U.S. Borrower shall give the Administrative Agent reasonable
advance notice prior to entering into any Specified Sale-Leaseback Transaction
and, if the property to be subject thereto, together with any improvements
thereon, has a value of at least $5,000,000 (based on the proposed sale price
thereof), (i) the form of lease relating thereto shall be subject to the
reasonable approval of the Administrative Agent and (ii) upon consummation of
such Specified Sale-Leaseback Transaction, the U.S. Borrower shall grant, or
cause the applicable Subsidiary to grant, to the Administrative Agent a
leasehold Mortgage in the property subject thereto, in form and substance
reasonably acceptable to the Administrative Agent.
(g) Notwithstanding anything in this Agreement or any Security
Document to the contrary, (i) in no event shall Holdings, the U.S. Borrower or
any Subsidiary be required to comply with the provisions of paragraphs (c), (d)
or (f) of this subsection 8.9 with respect to any asset as to which the
Administrative Agent, upon the
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request of the U.S. Borrower, shall determine in its reasonable discretion that
the costs of obtaining a security interest in such asset are excessive in
relation to the benefit to the Lenders of the security afforded thereby and (ii)
neither the U.S. Borrower nor any of its Subsidiaries shall be required to grant
to the Administrative Agent any Mortgage in respect of any real property listed
on Schedule 1.1(a); provided, however, that if any such real property is owned
in fee by the U.S. Borrower or a Subsidiary on the first anniversary of the
Closing Date, the U.S. Borrower or such Subsidiary shall comply with the
provisions of paragraph (d) of this subsection 8.9 with respect to such real
property (without giving effect to any dollar thresholds contained therein, but
subject to clause (i) of this subsection 8.9(g)) within 30 days after such
anniversary.
8.10 Change of Control Offers. Within three Business Days following
the Closing Date, the U.S. Borrower shall mail the Change of Control Offers to
the holders of the Existing Notes and the Preferred Stock, and shall establish
the Change of Control Payment Date in accordance with the requirements of the
Existing Indenture and the Certificate of Designation, respectively.
SECTION 9. NEGATIVE COVENANTS
Each of Holdings and the U.S. Borrower hereby agrees that it shall
not, and it shall not permit any of its Subsidiaries to, directly or indirectly
so long as the Commitments remain in effect or any Loan, Note, L/C Obligation or
Bankers' Acceptance remains outstanding and unpaid, any amount (unless cash in
an amount equal to such amount has been deposited to a cash collateral account
established by the Administrative Agent or such L/C Obligation is supported by a
Backstop L/C) remains available to be drawn under any Letter of Credit or any
other amount is owing to any Lender or the Administrative Agent hereunder or
under any other Credit Document (it being understood that each of the permitted
exceptions to each of the covenants in this Section 9 is in addition to, and not
overlapping with, any other of such permitted exceptions except to the extent
expressly provided):
9.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and reflected on
Schedule 9.1(a), including the refinancing of any such Indebtedness on terms and
conditions taken as a whole no less favorable to Holdings, the U.S. Borrower and
its Subsidiaries or the Lenders;
(b) Indebtedness consisting of the Loans and Bankers' Acceptances and
in connection with the Letters of Credit and this Agreement;
(c) Indebtedness evidenced by the Existing Notes;
(d) Indebtedness of the U.S. Borrower in respect of up to $270,000,000
aggregate principal amount of Borrower Bridge Subordinated Debt issued after the
Closing Date to fund the Change of Control Payments and to pay related fees and
expenses (after the making of the Change of Control Term Loans hereunder), and
an
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additional principal amount of Borrower Bridge Subordinated Debt issued in lieu
of cash interest on the outstanding Borrower Bridge Subordinated Debt and
Indebtedness contemplated by the Borrower Bridge Loan Agreement upon the
conversion of Borrower Bridge Subordinated Debt into subordinated term loans and
any exchange of such subordinated term notes into exchange notes (provided that
the original aggregate principal amount of Indebtedness incurred pursuant to
this paragraph (d), when added to the original aggregate principal amount of
Indebtedness incurred pursuant to paragraph (e) below, shall not exceed
$270,000,000);
(e) Indebtedness of Holdings in respect of up to $100,000,000
aggregate principal amount of Holdings Bridge Debt issued after the Closing Date
to fund Preferred Stock Payments and to pay related fees and expenses and an
additional principal amount of Holdings Bridge Debt issued in lieu of cash
interest on the outstanding Holdings Bridge Debt and Indebtedness contemplated
by the Holdings Bridge Loan Agreement upon the conversion of the Holdings Bridge
Debt into term loans and any exchange of such term loans into exchange notes
(provided that the original aggregate principal amount of Indebtedness incurred
pursuant to this paragraph (e), when added to the original aggregate principal
amount of Indebtedness incurred pursuant to paragraph (d) above, shall not
exceed $270,000,000); and
(f) Indebtedness in an aggregate principal amount not to exceed
$375,000,000 of (x) the U.S. Borrower under subordinated notes (which
Indebtedness may be guaranteed on a like basis by the Subsidiary Guarantors)
(any such Indebtedness being "Permitted Subordinated Notes") and/or (y) Holdings
under senior notes (any such Indebtedness being "Permitted Senior Notes"; and
collectively with the Permitted Subordinated Notes, the "Permitted Notes"), in
each case so long as (i) the U.S. Borrower shall have given the Administrative
Agent at least 5 Business Days (or such shorter time as shall be agreed by the
Administrative Agent) notice of any proposed issuance of Permitted Subordinated
Notes or Permitted Senior Notes, (ii) no Default or Event of Default has
occurred and is continuing at the time of issuance of such Permitted Notes or
immediately after giving effect thereto, (iii) the U.S. Borrower shall deliver
to the Administrative Agent calculations showing compliance with subsections 9.9
and 9.10 for the most recently ended Fiscal Quarter on a pro forma basis for the
issuance of such Permitted Notes and the application of the proceeds thereof,
(iv) such Permitted Notes shall be unsecured, (v) such Permitted Notes shall not
require any scheduled payment of principal prior to a date that is six months
after the Term Loan Maturity Date, (vi) the subordination provisions of any
Permitted Subordinated Notes shall not be materially more favorable to the
holders thereof than the analogous provisions of the U.S. Borrower Bridge
Subordinated Debt (or, if no Borrower Bridge Subordinated Debt shall have been
issued, the Existing Notes or Permitted Subordinated Notes being refinanced
thereby), (vii) the other terms and conditions of such Permitted Subordinated
Notes or Permitted Senior Notes, taken as a whole, shall not be materially more
restrictive than the terms and conditions of the Borrower Bridge Subordinated
Debt or Holdings Bridge Debt (or, if no Borrower Bridge Subordinated Debt or
Holdings Bridge Debt shall have been issued, the Existing Notes or Permitted
Subordinated Notes being refinanced thereby) as the case may be and (viii) the
proceeds of such Permitted Notes shall be used to repay the Existing Notes, the
Preferred Stock, the Borrower Bridge Subordinated Debt or the Holdings
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Bridge Debt (and all interest, fees, premiums, penalties or other amounts due
upon the repayment, prepayment, redemption or other retirement or extinguishment
of such Indebtedness or Preferred Stock) and, to the extent the Net Proceeds
thereof exceed the then outstanding amount of the Existing Notes, the Preferred
Stock, the Borrower Bridge Subordinated Debt or the Holdings Bridge Debt being
so repaid (and any interest, fees, premiums or other amounts), such Net Proceeds
shall be used to prepay the Term Loans in accordance with subsection 5.4(b)(ii)
and (z) any refinancing of any Permitted Notes so long as Holdings or the U.S.
Borrower, as applicable, shall have complied with subclauses (i) through (viii)
above with respect to such refinancing.
(g) Indebtedness (i) of Holdings or the U.S. Borrower to any
Subsidiary, (ii) of any Domestic Subsidiary (with respect to which the
requirements of subsection 8.9 have been satisfied) to Holdings or the U.S.
Borrower or any other Subsidiary, (iii) of any Foreign Subsidiary to any other
Foreign Subsidiary and (iv) of any Foreign Subsidiary to the U.S. Borrower or
any Domestic Subsidiary in an aggregate principal amount for all Foreign
Subsidiaries at any time outstanding not to exceed $35,000,000 (plus the sum of
any amounts dividended or distributed by Foreign Subsidiaries to the U.S.
Borrower or any Domestic Subsidiary), minus the sum of the amount of (A) any
Indebtedness outstanding pursuant to subsection 9.1(j), (B) the amount of any
investments made in Foreign Subsidiaries pursuant to subsection 9.6(b)(iv) and
(C) the amount of any guarantees of obligations of Foreign Subsidiaries pursuant
to subsection 9.3(c)(ii). For purpose of this subsection 9.1(g), the payment, or
intercompany loans or advances for such purpose, by Holdings, the U.S. Borrower
or any Subsidiary of expenses and operating costs of Holdings, the U.S. Borrower
or any Subsidiary (x) incurred in the ordinary course of business (provided
that, any such payment by Holdings, the U.S. Borrower or any Subsidiary of
expenses and operating costs of Foreign Subsidiaries of the U.S. Borrower
pursuant to this clause shall be promptly repaid by such Foreign Subsidiaries as
soon as such Foreign Subsidiaries have funds available to make such repayment
and any such repayment shall not increase the amount of loans which may be made
to such Foreign Subsidiaries pursuant to clause (iv) of this paragraph) or (y)
incurred in association with the initial establishment, start up and
capitalization of Holdings, the U.S. Borrower and its Subsidiaries shall not be
considered to be a loan, advance, dividend or other investment, and shall be
permitted under this Agreement and such payments shall not reduce any permitted
amounts to be so made as specified herein;
(h) (i) Indebtedness of the U.S. Borrower or any of its Subsidiaries
assumed in connection with acquisitions permitted by subsection 9.6(g) (so long
as such Indebtedness was not incurred in anticipation of such acquisitions),
(ii) Indebtedness of newly acquired Subsidiaries of the U.S. Borrower acquired
in such acquisitions (so long as such Indebtedness was not incurred in
anticipation of such acquisition) and (iii) Indebtedness of Holdings, the U.S.
Borrower or any of its Subsidiaries owed to the seller in any acquisition
permitted by subsection 9.6(g) constituting part of the purchase price thereof
so long as such Indebtedness is subordinated to the Loans and other obligations
hereunder on terms reasonably acceptable to the Administrative Agent, all of
which Indebtedness permitted by this
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subsection 9.1(h) shall not exceed $20,000,000 in aggregate principal amount at
any one time outstanding;
(i) additional unsecured subordinated Indebtedness of the U.S.
Borrower and its Subsidiaries in an aggregate principal amount at any time
outstanding not to exceed (i) $25,000,000 plus (ii) any additional principal
amount of such Indebtedness issued in lieu of cash interest on such outstanding
Indebtedness or any refinancing thereof; provided that (x) no part of the
principal amount of such Indebtedness shall have a maturity date earlier than
the six-month anniversary of the final Installment Payment Date, (y) the
non-default cash interest rate thereon shall not exceed 13% per annum, and (z)
such Indebtedness shall be subordinated to the obligations of the Credit Parties
under the Credit Documents on customary terms and conditions;
(j) Indebtedness of Foreign Subsidiaries of the U.S. Borrower in an
aggregate principal amount at any time outstanding not in excess of the
equivalent at the date of each incurrence thereof of $35,000,000;
(k) Indebtedness of the U.S. Borrower and its Subsidiaries for
industrial revenue bonds or other similar governmental and municipal bonds, for
the deferred purchase price of newly acquired property and to finance equipment
of the U.S. Borrower and its Subsidiaries (pursuant to purchase money mortgages
or otherwise and whether owed to the seller or a third party) used in the
ordinary course of business (provided such financing is entered into within 180
days of the acquisition of such property) of the U.S. Borrower and its
Subsidiaries in an amount (based on the remaining balance of the obligations
therefor on the books of the U.S. Borrower and its Subsidiaries) which shall not
exceed $25,000,000 in the aggregate at any one time outstanding and Indebtedness
of the U.S. Borrower and its Subsidiaries in respect of Financing Leases to the
extent subsections 9.7 and 9.9 would not be contravened;
(l) Indebtedness under clause (c) of the definition of such term and
not for borrowed money in respect of Liens permitted pursuant to subsection
9.2(a), (b), (c), (d), (e), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q),
(r) and (s);
(m) Indebtedness in respect of any Specified Sale-Leaseback
Transaction; and
(n) other Indebtedness of the U.S. Borrower and its Subsidiaries not
exceeding $35,000,000 in aggregate principal amount at any one time outstanding
(which Indebtedness, if subordinated Indebtedness, shall be subordinated to the
Loans and other obligations hereunder on terms reasonably acceptable to the
Administrative Agent).
9.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets, income or profits, whether now owned or
hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not
overdue by more than 60 days or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the
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books of Holdings, the U.S. Borrower or the relevant Subsidiary, as the case may
be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business in
respect of obligations which are not overdue by more than 60 days or which are
bonded or which are being contested in good faith and by appropriate proceedings
if adequate reserves with respect thereto are maintained on the books of
Holdings, the U.S. Borrower or the relevant Subsidiary, as the case may be, in
accordance with GAAP;
(c) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements (including, without limitation, reciprocal easement
agreements), rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments, changes, and
other similar encumbrances or title defects incurred, or licenses, leases or
subleases granted to others, in the ordinary course of business, which do not in
the aggregate materially interfere with or adversely affect in any material
respect the ordinary conduct of the business of Holdings, the U.S. Borrower and
its Subsidiaries on the properties subject thereto, taken as a whole;
(f) Liens in favor of the Administrative Agent, the Lenders and their
Affiliates pursuant to the Credit Documents, including Liens pursuant to the
Credit Documents in respect of Interest Rate Agreements and Commodity Hedging
Agreements, and bankers' liens arising by operation of law;
(g) Liens on property of the U.S. Borrower or any of its Subsidiaries
created solely for the purpose of securing (i) Indebtedness permitted by
subsection 9.1(h) (so long as in the case of clauses (i) and (ii) of subsection
9.1(h) such Lien was not incurred in anticipation of the related acquisition),
(ii) Indebtedness permitted by subsection 9.1(j), so long as such Liens affect
only assets of Foreign Subsidiaries located outside of Canada and the United
States, or (iii) Indebtedness permitted by subsection 9.1(k) representing or
incurred to finance, refinance or refund the purchase price of property;
provided that no such Lien incurred in connection with Indebtedness pursuant to
subsection 9.1(h) or 9.1(k) shall extend to or cover other property of the U.S.
Borrower or such Subsidiary other than the respective property so acquired (and
the products and proceeds thereof), and the principal amount of Indebtedness
secured by any such Lien shall at no time exceed the obligations secured on the
date of the acquisition of such asset or such Person becomes a Subsidiary, as
the case may be;
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(h) Liens existing on the Closing Date after giving effect to the
consummation of the Transactions and described in subsection 6.13 or Schedule
9.2(h) (including the extension of any Liens listed on such Schedule relating to
any Indebtedness permitted under subsection 9.1(a) in connection with any
refinancing of such Indebtedness permitted by such subsection and any Liens
securing Indebtedness to be repaid on the Closing Date to the extent the U.S.
Borrower has made arrangements to terminate such Liens in a manner satisfactory
to the Administrative Agent); provided that (i) no such Lien shall extend to or
cover other property of the U.S. Borrower or its Subsidiaries other than the
respective property so encumbered (and the products and proceeds thereof) and
(ii) the principal amount of Indebtedness secured by any such Lien shall at no
time exceed the original principal amount of the Indebtedness so secured;
(i) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Commercial L/Cs;
(j) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matter of record that have been placed by any
developer, landlord or other third party on property over which Holdings, the
U.S. Borrower or any of its Subsidiaries has easement rights or on any Leased
Property and subordination or similar agreements relating thereto and (ii) any
condemnation or eminent domain proceedings affecting any real property;
(k) Liens in connection with workmen's compensation obligations and
general liability exposure of Holdings, the U.S. Borrower and its Subsidiaries;
(l) Liens on goods (and proceeds thereof) financed with drawings under
commercial letters of credit securing reimbursement obligations in respect of
such commercial letters of credit issued in accordance with the terms of this
Agreement;
(m) Liens in or on any Fee Property listed on Schedule 1.1(a) to
secure Indebtedness incurred with respect to such property pursuant to
subsection 9.1(m);
(n) any interest or title of a lessor under any lease entered into by
Holdings, the U.S. Borrower or its Subsidiaries in the ordinary course of its
business and covering only the assets so leased;
(o) any obligations or duties affecting any of the assets of Holdings,
the U.S. Borrower or its Subsidiaries to any municipality or public authority
with respect to any franchise, grant, license or permit which do not materially
impair the use of such asset for the purposes for which it is held;
(p) Liens imposed by operation of law or other attachment or judgment
Liens with respect to any judgments or orders not constituting an Event of
Default under subsection 10(h);
(q) Liens arising from precautionary Uniform Commercial Code financing
statement filings with respect to operating leases or consignment arrangements
entered into by Holdings, the U.S. Borrower or any of its Subsidiaries in the
ordinary
97
course of business, so long as such Liens purport to attach only to the property
subject to such leases or consignments (and the products and proceeds thereof);
(r) Liens on property of Holdings, the U.S. Borrower or any Subsidiary
in favor of landlords securing licenses, subleases and leases and not
interfering in any material respect with the business of Holdings, the U.S.
Borrower or such Subsidiary; and
(s) Liens not otherwise permitted by this subsection 9.2 so long as
the aggregate outstanding principal amount of the obligations secured thereby at
any one time does not exceed $5,000,000.
9.3 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) the Guarantees;
(b) other guarantees by the U.S. Borrower or any Subsidiary incurred
in the ordinary course of business for an aggregate amount not to exceed
$5,000,000 at any one time;
(c) guarantees (i) by Holdings, the U.S. Borrower or any Domestic
Subsidiary (A) of obligations of Domestic Subsidiaries of the U.S. Borrower or
the U.S. Borrower and (B) of obligations of Foreign Subsidiaries of the U.S.
Borrower in an aggregate principal amount at any one time not to exceed
$35,000,000 (plus the sum of any amounts dividended or distributed by Foreign
Subsidiaries to the U.S. Borrower or any Domestic Subsidiary), as reduced by
amounts outstanding in accordance with subsections 9.1(g)(iv), 9.1(j) or
9.6(b)(iv) (provided that, in each case, if the primary obligation being
guaranteed is subordinated, such guarantees are subordinated to the Guarantees
on substantially the same basis as such primary obligation is subordinated to
the Loans) and (ii) by any Foreign Subsidiary of any obligations of any other
Foreign Subsidiary. For purpose of this subsection 9.3(c), the payment, or
intercompany loans or advances for such purpose, by Holdings, the U.S. Borrower
or any Subsidiary of expenses and operating costs of Holdings, the U.S. Borrower
or any Subsidiary (x) incurred in the ordinary course of business (provided
that, any such payment by Holdings, the U.S. Borrower or any Subsidiary of
expenses and operating costs of Foreign Subsidiaries of the U.S. Borrower
pursuant to this clause shall be promptly repaid by such Foreign Subsidiaries as
soon as such Foreign Subsidiaries have funds available to make such repayment
and any such repayment shall not increase the amount of guarantees permitted
pursuant to clause (i)(B) of this paragraph) or (y) incurred in association with
the initial establishment, start up and capitalization of Holdings, the U.S.
Borrower and its Subsidiaries shall not be considered to be a loan, advance,
dividend or other investment, and shall be permitted under this Agreement and
such payments shall not reduce any permitted amounts to be so made as specified
herein;
(d) Contingent Obligations existing on the Closing Date and described
in Schedule 9.3(d) and refinancings thereof permitted by subsection 9.1(a);
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(e) guarantees of obligations to third parties in connection with
relocation of employees of the U.S. Borrower or any of its Subsidiaries, in an
amount which, together with all loans and advances made pursuant to subsection
9.6(f), shall not exceed $7,500,000 at any time outstanding; and
(f) Contingent Obligations in connection with workmen's compensation
obligations and general liability exposure of Holdings, the U.S. Borrower and
its Subsidiaries.
9.4 Prohibition of Fundamental Changes. Enter into any merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or engage in any type of business other
than of the same general type now conducted by it, except (a) for the
transactions otherwise permitted pursuant to clause (b) of subsection 9.5, (b)
any Domestic Subsidiary of the U.S. Borrower may be merged with and into the
U.S. Borrower or a wholly owned Domestic Subsidiary of the U.S. Borrower, (c)
any Foreign Subsidiary of the U.S. Borrower may be merged with and into the U.S.
Borrower or a wholly owned Subsidiary of the U.S. Borrower, (d) Subsidiaries
with a net book value not greater than $100,000 may be dissolved, (e) any
Subsidiary (other than the Canadian Borrower) may otherwise be dissolved
(provided that upon dissolution, the assets of such Subsidiary are transferred
to the U.S. Borrower or one of its wholly owned Domestic Subsidiaries (or, in
the case of a dissolution of a Foreign Subsidiary, such assets are transferred
to the U.S. Borrower or one of its wholly owned Subsidiaries) on the terms and
subject to the conditions set forth in subsection 9.5(b)) and (f) so long as no
Event of Default (in the case of clause (i)) or Default (in the case of clauses
(ii) and (iii)) shall have occurred and be continuing or would result therefrom,
(i) Holdings may be merged or consolidated with or into the Parent, or the
Parent may be merged or consolidated with or into Holdings, so long as, in any
such case, the surviving entity in any such transaction assumes (including, if
applicable, by operation of law) all of the rights and obligations of Holdings
under this Agreement, (ii) the U.S. Borrower may be merged with any Person for
purposes of effecting any acquisition permitted by subsection 9.6(g), provided
that the U.S. Borrower is the surviving entity in any such merger and (iii)
Holdings may form a new Subsidiary (in which Holdings shall own all the Capital
Stock thereof) solely for purposes of effecting any acquisition permitted by
subsection 9.6(g), and any such Subsidiary may be merged with any Person in
connection with any such permitted acquisition, provided that all the Capital
Stock of the surviving entity in any such merger is, upon consummation thereof
or substantially simultaneously therewith, contributed by Holdings to the U.S.
Borrower.
9.5 Prohibition on Sale of Assets. Convey, sell, lease (other than a
sublease of property), assign, transfer or otherwise dispose of (including
through a transaction of merger or consolidation of any Subsidiary) any of its
property, business or assets (including, without limitation, other payments and
receivables but excluding leasehold interests), whether now owned or hereafter
acquired, except:
(a) for sales or other dispositions of inventory in the ordinary
course of business;
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(b) that the U.S. Borrower or any Subsidiary of the U.S. Borrower may
sell, lease, transfer, or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to, and any Subsidiary of the U.S. Borrower
may merge with and into, the U.S. Borrower or a wholly owned Domestic Subsidiary
of the U.S. Borrower (or, in the case of any Foreign Subsidiary of the U.S.
Borrower, the U.S. Borrower, another Foreign Subsidiary or a wholly owned
Subsidiary of the U.S. Borrower), and the U.S. Borrower or any Subsidiary of the
U.S. Borrower may sell or otherwise dispose of, or part with control of any or
all of, the Capital Stock of any Subsidiary to a wholly owned Domestic
Subsidiary of the U.S. Borrower or the U.S. Borrower (or, in the case of the
Capital Stock or a Foreign Subsidiary, to another Foreign Subsidiary); provided
that (i) no such transaction may be effected if it would result in the transfer
of any Collateral to a Subsidiary the Capital Stock of which has not been
pledged to the Administrative Agent pursuant to subsection 8.9 and which has not
guaranteed the obligations of the U.S. Borrower or the Canadian Borrower, as
applicable, for the benefit of the Lenders, under the Notes and this Agreement,
and granted liens or security interests in favor of the Administrative Agent,
for the benefit of the Lenders, on substantially all of its assets to secure
such guarantee, pursuant to a guarantee, security agreement and other
documentation reasonably satisfactory to the Administrative Agent and (ii) the
U.S. Borrower shall not transfer all or substantially all of its assets pursuant
to this paragraph; provided further that, notwithstanding the foregoing, so long
as no Default shall have occurred and be continuing or result therefrom, the
U.S. Borrower may be merged or consolidated with or into a corporation or
limited liability company newly formed by Holdings (which shall own all the
common equity interests thereof) and organized under the laws of the United
States or any state thereof or the District of Columbia solely for purposes of
reincorporating or reorganizing in another jurisdiction, so long as Holdings
shall give reasonable prior notice of such merger or consolidation to the
Administrative Agent and take all such actions as would be required under
subsection 8.9(b) if such corporation or limited liability company were a
Subsidiary of the U.S. Borrower;
(c) leases or licenses of Fee Properties and other real property owned
in fee;
(d) any condemnation or eminent domain proceedings affecting any real
property or any casualty or loss with respect to any property; provided that the
net proceeds received in connection with such proceeding, casualty or loss, as
the case may be, shall be deemed not to constitute Net Proceeds if such net
proceeds are reinvested in new or existing properties within eighteen months
from the date of such condemnation, taking, casualty or loss;
(e) substantially like-kind exchanges of real property or equipment;
provided that only any cash received by the U.S. Borrower or any Subsidiary of
the U.S. Borrower in connection with such an exchange (net of all costs and
expenses incurred in connection with such transaction or with the commencement
of operation of real property received in such exchange) shall be deemed to be
Net Proceeds and shall be applied as provided for in subsection 5.4(b)(iii)
unless such Net Proceeds are reinvested in new or existing properties or
equipment within twelve months from the date of such exchange;
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(f) for the sale or other disposition of any property that, in the
reasonable judgment of the U.S. Borrower, has become uneconomic, obsolete or
worn out, and which is sold or disposed of in the ordinary course of business;
(g) for the sale or other disposition of any property (other than
pursuant to a Specified Sale-Leaseback Transaction) the aggregate amount of the
net proceeds received in respect of which shall not exceed $10,000,000 during
the term of this Agreement after the Closing Date; and
(h) any sale or disposition of any interest in property (other than
pursuant to a Specified Sale-Leaseback Transaction); provided that (i) the net
proceeds of any such sale shall constitute Net Proceeds only to the extent such
net proceeds are not reinvested in new or existing properties within twelve
months from the date of such sale, (ii) if the property so sold constituted
Collateral under the Security Documents then any property purchased with the net
proceeds thereof shall be mortgaged or pledged, as the case may be, for the
benefit of the Lenders if required by subsection 8.9 and in accordance therewith
and (iii) the aggregate outstanding amount of net proceeds held by the U.S.
Borrower and its Subsidiaries at any time for reinvestment in respect of any
property sold pursuant to this paragraph shall not exceed $15,000,000;
(i) for the sale or other disposition of the Photography Division;
provided that (i) 50% of the net proceeds shall constitute Net Proceeds to be
applied to the Term Loans in accordance with subsection 5.4(b)(iii), (ii) 50% of
the net proceeds of any such sale shall constitute Net Proceeds only to the
extent such net proceeds are not reinvested in new or existing properties within
twelve months from the date of such sale and (iii) if the property so sold
constituted Collateral under the Security Documents then any property purchased
with the net proceeds thereof shall be mortgaged or pledged, as the case may be,
for the benefit of the Lenders if required by subsection 8.9 and in accordance
therewith;
(j) any sale or other disposition of any minority interests in a joint
venture or other Person;
(k) the sale or discount of overdue accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof;
(l) licenses or sublicenses of intellectual property and general
intangibles and licenses, leases or subleases of other property, in each case,
in the ordinary course of business and which do not materially interfere with
the business of the U.S. Borrower and its Subsidiaries; and
(m) dispositions permitted by subsection 9.4; and
(n) dispositions of Fee Properties pursuant to Specified
Sale-Leaseback Transactions; provided that the Net Proceeds thereof shall be
used to prepay Term Loans in accordance with subsection 5.4(b)(iii).
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9.6 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of, or make any other investment in
(including, without limitation, any acquisition of all or any substantial
portion of the assets, and any acquisition of a business or a product line, of
other companies, other than the acquisition of inventory in the ordinary course
of business), any Person (except to the extent permitted by Section 9.7 or
9.11), except:
(a) loans or advances, to the extent, in each case, the Indebtedness
created thereby is permitted by subsection 9.1(g);
(b) (i) any Subsidiary may make investments in Holdings or the U.S.
Borrower (by way of capital contribution or otherwise), (ii) Holdings, the U.S.
Borrower or any Subsidiary may make investments in, or create, any wholly owned
Domestic Subsidiary of the U.S. Borrower (by way of capital contribution or
otherwise) or make investments permitted by subsection 9.5(b); provided that, in
any such case, the requirements of subsection 8.9 are satisfied, (iii) the U.S.
Borrower and any Subsidiary may make investments in any Subsidiary financed with
contributions of equity after the Closing Date from the Investor Group or their
Affiliates, and (iv) the U.S. Borrower and any Subsidiary may make investments
in, or create, any Foreign Subsidiary (by way of capital contribution or
otherwise) or make investments permitted by subsection 9.5(b); provided that (x)
the requirements of subsection 8.9 are satisfied and (y) the aggregate amount at
any one time of all investments in such Foreign Subsidiaries shall not exceed
(I) $35,000,000 (plus the sum of any amounts dividended or distributed by
Foreign Subsidiaries to the U.S. Borrower or any Domestic Subsidiary), minus
(II) the amount of any Indebtedness of any Foreign Subsidiary at any such time
outstanding in accordance with subsection 9.1(j) or 9.3(c)(ii);
(c) Holdings, the U.S. Borrower and its Subsidiaries may (i) invest
in, acquire and hold Cash Equivalents and Investment Grade Securities and (ii)
make loans and acquire or hold other non-cash investments in an aggregate amount
at any time outstanding not to exceed $1,000,000 in connection with a sale of
assets permitted by subsection 9.5;
(d) Holdings, the U.S. Borrower and its Subsidiaries may make payroll
advances in the ordinary course of business (including advances against
commissions);
(e) the U.S. Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms
(provided that nothing in this clause (e) shall prevent the U.S. Borrower or any
of its Subsidiaries from offering such concessionary trade terms, or from
receiving such investments, in connection with the bankruptcy or reorganization
of their respective suppliers or customers or the settlement of disputes with
such customers or suppliers arising in the ordinary course of business, as
management deems reasonable in the circumstances);
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(f) Holdings, the U.S. Borrower or any of its Subsidiaries may make
travel and entertainment advances and relocation and other loans to directors,
officers and employees of Holdings, the U.S. Borrower or any such Subsidiary;
provided that the aggregate principal amount of all such loans and advances
outstanding at any one time, together with the guarantees of such loans and
advances made pursuant to subsection 9.3(e), shall not exceed $7,500,000 at any
one time outstanding;
(g) Holdings, the U.S. Borrower and its Subsidiaries may make
expenditures to acquire all or a portion of the Capital Stock or assets of any
Person that, in the case of the acquisition of Capital Stock, will become a
Subsidiary of the U.S. Borrower as a result thereof and that is engaged
primarily in one or more businesses in which the U.S. Borrower and its
Subsidiaries are engaged or directly related thereto; provided that, after
giving pro forma effect to any such acquisition and the financing thereof, (i)
the amount of the expenditures in connection with such acquisition does not
exceed $30,000,000 without the prior written consent of the Required Lenders,
(ii) the provisions of subsection 8.9 are satisfied, (iii) the U.S. Borrower is
in compliance with subsections 9.9 and 9.10 as of the end of the immediately
preceding Fiscal Quarter of the U.S. Borrower for which the appropriate
financial information is available; provided that the last four fiscal quarters
of Consolidated EBITDA (as may be adjusted for identified post acquisition cost
savings reasonably agreed to by the U.S. Borrower and the Administrative Agent)
of each acquired company, business or group of assets during the testing period
shall be added for purposes of determining compliance with such subsections,
(iv) if such acquisition is made by Holdings, the Capital Stock or assets so
acquired are transferred to the U.S. Borrower or a Subsidiary of the U.S.
Borrower promptly following the consummation of such acquisition, and (v) no
Default or Event of Default has occurred and is continuing or would result
therefrom;
(h) Holdings, the U.S. Borrower or any of its Subsidiaries may make
investments in, and the U.S. Borrower or any of its Subsidiaries may make loans
to or expenditures relating to, joint ventures or other Persons engaged
primarily in one or more businesses in which the U.S. Borrower and its
Subsidiaries are engaged or generally related thereto in an aggregate amount not
to exceed the greater of (i) $20,000,000 in the aggregate after the Closing Date
or (ii) $12,500,000 in the aggregate after the Closing Date in connection with
loans to such joint ventures or other Persons or expenditures relating to such
investments (plus the sum of (A) any amounts dividended or distributed to the
U.S. Borrower or any Domestic Subsidiary of the U.S. Borrower (whichever party
is making such loan or expenditure) by such joint venture or other Person, (B)
the net cash proceeds of any issuance of Capital Stock by Holdings to, or any
capital contribution to Holdings by the Investor Group or its Affiliates (so
long as such amount (x) is contributed to the U.S. Borrower as common equity and
(y) has not been used to increase the Base Amount of Capital Expenditures
permitted under subsection 9.7 for any period) and/or any incurrence of
Indebtedness permitted under subsection 9.1(i) in respect of loans made by the
Investor Group or its Affiliates and (C) any amounts from sales or distributions
permitted by subsection 9.5(j)); provided that (I) if such investment is made by
Holdings, the interest in the joint venture or other Person so acquired is
transferred to the U.S. Borrower or a Subsidiary of the U.S. Borrower promptly
following the making of such investment and (II) at the time of and after giving
effect thereto no
103
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
(i) Contingent Obligations permitted by subsection 9.3;
(j) the Transactions;
(k) investments existing on the Closing Date and listed on Schedule
9.6(k), and extensions, renewals, modifications, restatements or replacements
thereof; provided that no such extension, renewal, modification, restatement or
replacement shall increase the amount of the original investment;
(l) investments in Commodity Hedging Agreements and Interest Rate
Agreements entered into by the U.S. Borrower or any Subsidiary in the ordinary
course of business; and
(m) investments permitted by subsection 9.4.
For purposes of this subsection 9.6, the payment, or intercompany
loans or advances for such purpose, by Holdings, the U.S. Borrower or any
Subsidiary of expenses and operating costs of Holdings, the U.S. Borrower or any
Subsidiary (x) incurred in the ordinary course of business (provided that, any
such payment by Holdings, the U.S. Borrower or any Subsidiary of expenses and
operating costs of Foreign Subsidiaries of the U.S. Borrower pursuant to this
clause shall be promptly repaid by such Foreign Subsidiaries as soon as such
Foreign Subsidiaries have funds available to make such repayment) or (y)
incurred in association with the initial establishment, start up and
capitalization of Holdings, the U.S. Borrower and its Subsidiaries shall not be
considered to be a loan, advance, dividend or other investment, and shall be
permitted under this Agreement and such payments shall not reduce any permitted
amounts to be so made as specified herein.
9.7 Capital Expenditures. Make or commit to make any Capital
Expenditures, except that the U.S. Borrower and its Subsidiaries may make or
commit to make Capital Expenditures not exceeding $40,000,000 for any Fiscal
Year of the U.S. Borrower (the "Base Amount"), commencing with the 2003 Fiscal
Year; provided that (i) for any Fiscal Year, the Base Amount may be increased by
a maximum of 50% of the Base Amount for such Fiscal Year by carrying over to
such Fiscal Year any portion of the Base Amount (as increased) not spent in the
immediately preceding Fiscal Year, (ii) for each Fiscal Year of the U.S.
Borrower, the Base Amount for such Fiscal Year shall be increased by the amount
of any net cash proceeds from the issuance of Capital Stock of Holdings to, or
any capital contribution to Holdings by, directly or indirectly, the Investor
Group or its Affiliates (to the extent the amount thereof is contributed to the
U.S. Borrower as common equity), (iii) for each Fiscal Year of the U.S.
Borrower, the Base Amount for such Fiscal Year shall be increased in the event
any Person or assets of such Person (an "Acquired Person") is acquired as
permitted herein by an amount equal to 110% of the amount of capital
expenditures (determined in accordance with GAAP) of such Acquired Person for
the twelve months prior to the date it was acquired ("Acquired
104
Capital Expenditures"); provided that, with respect to the Fiscal Year in which
such Person becomes an Acquired Person, the Base Amount shall be increased by
the product of (A) the Acquired Capital Expenditures of such Acquired Person
times (B) a fraction, the numerator of which is the number of days remaining in
the Fiscal Year of the U.S. Borrower in which such Acquired Person was acquired
and the denominator of which is 365 and (iv) for any Fiscal Year of the U.S.
Borrower, the U.S. Borrower and its Subsidiaries may make Capital Expenditures
in the form of Financing Leases entered into in connection with the consummation
of any Specified Sale-Leaseback Transaction; and provided, further, that,
notwithstanding anything herein, additional Capital Expenditures may be made
with the net cash proceeds from dispositions permitted under subsection 9.5(d),
(e), (h) or (i), in each case, in accordance with the parameters set forth
therein.
9.8 Interest Rate Agreements. Enter into, create, incur, assume or
suffer to exist any Interest Rate Agreements or obligations in respect thereof
except in the ordinary course of business for non-speculative purposes.
9.9 Debt to EBITDA. (a) At the last day of any Fiscal Quarter of the
U.S. Borrower set forth below, permit the ratio (the "Leverage Ratio") of
Consolidated Indebtedness (excluding seasonal borrowings of the Borrowing
Parties occurring in the third Fiscal Quarter of the U.S. Borrower which shall
be calculated as the lesser of (i) $85,000,000 and (ii) the amount of Revolving
Credit Loans and C$ Loans outstanding on the date of such calculation) as of
such day to Consolidated EBITDA for the period of four consecutive Fiscal
Quarters of the U.S. Borrower ending on such day to be greater than the ratio
set forth below for such Fiscal Quarter; provided that, with respect to any
acquisition permitted by subsection 9.6(g), the last four fiscal quarters of
Consolidated EBITDA (as may be adjusted for post acquisition cost savings
reasonably agreed to by the U.S. Borrower and the Administrative Agent) of the
acquired company shall be added for the purposes of calculating this ratio:
Fiscal Year Fiscal Quarter Ratio
----------- -------------- ------------
2003 Third 4.75 to 1.00
Fourth 4.75 to 1.00
2004 First 4.75 to 1.00
Second 4.75 to 1.00
Third 4.75 to 1.00
Fourth 4.65 to 1.00
2005 First 4.65 to 1.00
Second 4.65 to 1.00
Third 4.65 to 1.00
Fourth 4.25 to 1.00
2006 First 4.25 to 1.00
Second 4.25 to 1.00
Third 4.25 to 1.00
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Fiscal Year Fiscal Quarter Ratio
----------- -------------- ------------
Fourth 4.00 to 1.00
2007 First 4.00 to 1.00
Second 4.00 to 1.00
Third 4.00 to 1.00
Fourth 3.50 to 1.00
2008 First 3.50 to 1.00
Second 3.50 to 1.00
Third 3.50 to 1.00
Fourth 3.00 to 1.00
2009 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Thereafter 2.75 to 1.00
(b) At the last day of any Fiscal Quarter of the U.S. Borrower set
forth below, permit the Senior Leverage Ratio to be greater than the ratio set
forth below for such Fiscal Quarter; provided that with respect to any
acquisition permitted by subsection 9.6(g), the last four fiscal quarters of
Consolidated EBITDA (as may be adjusted for post-acquisition cost savings
reasonably agreed to by the U.S. Borrower and the Administrative Agent) of the
acquired company shall be added for the purposes of calculating this ratio:
Fiscal Year Fiscal Quarter Ratio
----------- -------------- ------------
2003 Third 3.25 to 1.00
Fourth 3.25 to 1.00
2004 First 3.25 to 1.00
Second 3.25 to 1.00
Third 3.25 to 1.00
Fourth 3.00 to 1.00
2005 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 2.50 to 1.00
2006 First 2.50 to 1.00
Second 2.50 to 1.00
Third 2.50 to 1.00
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Fiscal Year Fiscal Quarter Ratio
----------- -------------- ------------
Fourth 2.00 to 1.00
2007 First 2.00 to 1.00
Second 2.00 to 1.00
Third 2.00 to 1.00
Thereafter 1.75 to 1.00
9.10 Interest Coverage. At the last day of any Fiscal Quarter of the
U.S. Borrower set forth below, permit the Interest Coverage Ratio to be less
than the ratio set forth below for such Fiscal Quarter:
Fiscal Year Fiscal Quarter Interest Coverage Ratio
----------- -------------- -----------------------
2003 Third 2.50 to 1.00
Fourth 2.50 to 1.00
2004 First 2.50 to 1.00
Second 2.50 to 1.00
Third 2.50 to 1.00
Fourth 2.50 to 1.00
2005 First 2.50 to 1.00
Second 2.50 to 1.00
Third 2.50 to 1.00
Fourth 2.60 to 1.00
2006 First 2.60 to 1.00
Second 2.60 to 1.00
Third 2.60 to 1.00
Fourth 2.65 to 1.00
2007 First 2.65 to 1.00
Second 2.65 to 1.00
Third 2.65 to 1.00
Fourth 3.25 to 1.00
2008 First 3.25 to 1.00
Second 3.25 to 1.00
Third 3.25 to 1.00
Thereafter 3.50 to 1.00
9.11 Limitation on Restricted Payments. Declare any dividends on any
shares of any class of Capital Stock, or make any payment on account of, or set
apart
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assets for a sinking or other analogous fund for, the purchase, redemption,
retirement or other acquisition of any outstanding shares of any class of
Capital Stock of Holdings, the U.S. Borrower or any Subsidiary, or any warrants
or options to purchase such Capital Stock, whether now or hereafter outstanding,
or optionally prepay, retire, redeem, purchase, defease or exchange, or make or
arrange for any mandatory prepayment, retirement, redemption, purchase or
defeasance of any Indebtedness outstanding pursuant to subsection 9.1(c), (d),
(e), (f) or (i) or, in each case, make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of Holdings, the U.S. Borrower or any of its Subsidiaries; except
that:
(a) Subsidiaries may pay dividends to the U.S. Borrower or any other
Subsidiary, and any Foreign Subsidiary of the U.S. Borrower organized under the
laws of Ireland may pay dividends to its employee shareholders as part of such
employee shareholders' compensation package;
(b) Holdings, the U.S. Borrower and its Subsidiaries may pay or make
dividends or distributions to any holder of its Capital Stock in the form of
additional shares of Capital Stock of the same class and type;
(c) the U.S. Borrower may make the Existing Notes Payment and the
Preferred Stock Payment pursuant to the Change of Control Offers;
(d) the U.S. Borrower may redeem Preferred Stock or Existing Notes
with the proceeds of (i) the issuance of Capital Stock of Holdings ("Holdings
Capital Stock"), to the extent that such proceeds are not required to be used to
prepay Term Loans pursuant to subsection 5.4(b)(i) and (ii) any Indebtedness
permitted pursuant to subsection 9.1(f); provided that no Default or Event of
Default exists at the time of, or would result from, such redemptions;
(e) Holdings may repurchase Holdings Capital Stock with the proceeds
of the issuance of Holdings Capital Stock, to the extent that such proceeds are
not required to be used to prepay Term Loans pursuant to subsection 5.4(b)(i);
provided that no Default or Event of Default exists at the time of, or would
result from, such repurchases;
(f) Holdings may repurchase Holdings Capital Stock and the U.S.
Borrower may repurchase Existing Notes or Preferred Stock; provided that (i) the
aggregate amount expended pursuant to this clause (f), together with all amounts
dividended or distributed by Holdings to the Parent pursuant to subsection
9.11(k)(vi), shall not exceed $25,000,000 during the term of this Agreement
after the Closing Date, (ii) the U.S. Borrower is in pro forma compliance with
the financial covenants as set forth in Section 9.9 and Section 9.10 (for
purposes of this subsection 9.11(f) only, such pro forma compliance shall be
determined after giving effect to such redemptions and repurchases, and any
occurrence of Indebtedness in connection therewith, on a pro forma basis as of
the last day of the most recent Fiscal Quarter for which financial statements
have been delivered pursuant to Section 8.1) and (iii) no Default or Event of
Default exists at the time of, or would result from, such repurchases;
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(g) Holdings may repurchase Holdings Capital Stock and the U.S.
Borrower may repurchase Existing Notes or Preferred Stock; provided that (i) the
aggregate amount expended pursuant to this clause (g), together with all amounts
dividended or distributed by Holdings to the Parent pursuant to subsection
9.11(k)(vi), shall not exceed $25,000,000 during the term of this Agreement
after the Closing Date, (ii) the Senior Leverage Ratio is less than 3.00:1.00,
determined after giving effect to such repurchases on a pro forma basis as of
the last day of the most recent Fiscal Quarter for which financial statements
have been delivered pursuant to Section 8.1, and (iii) no Default or Event of
Default exists at the time of, or would result from, such repurchases; and
provided further that neither Holdings nor the U.S. Borrower shall make such
repurchases as set forth in this clause (g) until they have expended the total
aggregate amount in respect of repurchases permitted pursuant to paragraph (f)
of subsection 9.11;
(h) the U.S. Borrower may repurchase Existing Notes; provided that (i)
the aggregate amount expended by the U.S. Borrower pursuant to this clause (h)
shall not exceed $25,000,000 during the term of this Agreement after the Closing
Date, (ii) the Senior Leverage Ratio is less than 2.75:1.00, determined after
giving effect to such repurchases on a pro forma basis as of the last day of the
most recent Fiscal Quarter for which financial statements have been delivered
pursuant to Section 8.1, and (iii) no Default or Event of Default exists at the
time of, or would result from, such repurchases; and provided further that the
U.S. Borrower shall not make such repurchases as set forth in this clause (h)
until Holdings and the U.S. Borrower have expended the total aggregate amount in
respect of repurchases permitted pursuant to paragraphs (f) and (g) of
subsection 9.11;
(i) the U.S. Borrower may (x) redeem the Borrower Bridge Subordinated
Debt with the proceeds of Permitted Subordinated Notes as permitted by
subsection 9.1(f), and (y) refinance the Permitted Subordinated Notes as
contemplated by subsection 9.1(f);
(j) Holdings may (x) redeem the Holdings Bridge Debt with the proceeds
of Permitted Senior Notes and (y) refinance the Permitted Senior Notes as
contemplated by subsection 9.1(f); and
(k) the U.S. Borrower may make dividends or distributions to Holdings
(and Holdings may make dividends or distributions to the Parent; provided that,
in the case of any direct or indirect distribution to the Parent, the Parent
owns, beneficially and of record, 100% of the issued and outstanding common
stock of Holdings at the time of such distribution):
(i) the proceeds of which shall be applied by Holdings or the
Parent, as applicable, directly to pay out of pocket expenses for
administrative, legal and accounting services provided by third parties
that are reasonable and customary and incurred in the ordinary course of
business for such professional services, or to pay franchise fees and
similar costs;
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(ii) the proceeds of which will be used to pay taxes of the
Parent, Holdings, the U.S. Borrower and its Subsidiaries as part of a
consolidated, combined or unitary tax filing group or taxes resulting from
the separate existence of the Parent or Holdings;
(iii) so long as no Event of Default or Default shall have
occurred and be continuing or would result therefrom, the proceeds of which
will be used by the Parent or Holdings to repurchase shares of Holdings
Capital Stock or Parent Capital Stock, as the case may be, owned by former,
present or future employees of the Parent, Holdings, the U.S. Borrower or
its Subsidiaries or their assigns, estates and heirs; provided that the
aggregate amount expended by Holdings (or dividended or distributed by
Holdings or the Parent) pursuant to this clause (k)(iii) shall not in the
aggregate exceed $25,000,000 during the term of this Agreement after the
Closing Date, plus any amounts contributed to the Parent or Holdings as a
result of resales of such repurchased shares of Parent Capital Stock or
Holdings Capital Stock, respectively (in the case of Parent Common Stock,
to the extent the proceeds of such resales are contributed to Holdings as
common equity);
(iv) of the proceeds of Permitted Subordinated Notes, the
proceeds of which will be used by Holdings to redeem the Holdings Bridge
Debt or Permitted Senior Notes; and
(v) the proceeds of which will be used by Holdings to repurchase
Holdings Capital Stock pursuant to paragraph (f) or (g) of this subsection
9.11; provided that all of the terms and conditions applicable to such
repurchase set forth in such paragraph (f) or (g), as applicable, are
satisfied;
(vi) the proceeds of which will be used by the Parent to
repurchase Parent Capital Stock pursuant to paragraph (f) or (g) of this
subsection 9.11 (as though references therein to Holdings were instead
references to the Parent); provided that all of the terms and conditions
applicable to such repurchase set forth in such paragraph (f) or (g), as
applicable, are satisfied; and
(vii) the proceeds of which will be used to pay management fees
to DLJMB and its Affiliates in accordance with the terms of this Agreement
and the Management Agreement
; provided, however, that all amounts dividended or distributed to the Parent or
Holdings pursuant to this paragraph (k) shall be returned promptly to the U.S.
Borrower if they are not used by the Parent or Holdings for the purposes
specified therein within 10 days of the Parent's or Holdings' receipt thereof.
9.12 Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of
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any service, with any Affiliate except for transactions which are otherwise (a)
permitted under this Agreement or (b) which are upon fair and reasonable terms
no less favorable to Holdings, the U.S. Borrower or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate; provided that nothing in this subsection 9.12 shall prohibit
Holdings, the U.S. Borrower or its Subsidiaries from engaging in the following
transactions: (w) the performance of Holdings, the U.S. Borrower's or any
Subsidiary's obligations under any employment contract, collective bargaining
agreement, employee benefit plan, related trust agreement or any other similar
arrangement heretofore or hereafter entered into in the ordinary course of
business, (x) the payment of compensation to employees, officers, directors or
consultants in the ordinary course of business (and the payment of reasonable
and customary fees and reimbursement of expenses payable to directors of the
Parent or Holdings; provided that, with respect to any such payment to directors
of the Parent, the Parent owns, beneficially and of record, 100% of the issued
and outstanding common stock of Holdings at the time of such payment), (y) the
maintenance of benefit programs or arrangements for employees, officers or
directors, including, without limitation, vacation plans, health and life
insurance plans, deferred compensation plans, and retirement or savings plans
and similar plans, in each case, in the ordinary course of business or (z) the
payment to DLJMB or its Affiliates of (i) fees with respect to the Transactions,
to be paid on the Closing Date, in an amount not to exceed $10,000,000, (ii)
fees and expenses pursuant to the Management Agreement in an aggregate amount
not to exceed $2,500,000 in any Fiscal Year and (iii) fees in respect of any
acquisitions or dispositions in which DLJMB or its Affiliates acted as an
adviser to Parent, Holdings, the U.S. Borrower or any Subsidiary in an amount
not to exceed 1% of the value of such transaction.
9.13 Limitation on Changes in Fiscal Year. Permit the Fiscal Year of
Holdings or the U.S. Borrower to end on a day other than on the Saturday closest
to December 31 in any calendar year.
9.14 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
U.S. Borrower or any Subsidiary is engaged on the date of this Agreement (or
which are directly related thereto or generally related thereto, including,
without limitation, the provision of goods or services related to educational
institutions, parents and students and the recognition businesses).
9.15 Amendments to Certain Documents. Amend, modify, waive or
terminate any provisions of the Merger Agreement in a manner which is materially
adverse to the U.S. Borrower or the Lenders, without the consent of the
Administrative Agent, which consent shall not be unreasonably withheld or
delayed.
9.16 Limitation on Amendments of Certain Debt. Waive, amend,
supplement, modify, terminate or release any of the provisions with respect to
the Bridge Debt or any Indebtedness incurred pursuant to subsection 9.1(f)
without the prior consent of the Administrative Agent, to the extent that any
such waiver, amendment, supplement, modification, termination or release would
be materially adverse to the Lenders.
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9.17 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by Holdings, the U.S. Borrower or any
Subsidiary of real or personal, immovable or movable, property which has been or
is to be sold or transferred by Holdings, the U.S. Borrower or such Subsidiary
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of the U.S. Borrower or such Subsidiary (a "Sale-Leaseback Transaction"),
provided that this subsection 9.17 shall not prohibit any Sale-Leaseback
Transaction resulting from the incurrence of any lease in respect of (a) any
capital asset entered into within 180 days of the acquisition of such capital
asset for the purpose of providing permanent financing of such capital asset and
(b) Specified Sale-Leaseback Transactions.
9.18 Limitations on Changes in Holding Company Status. Permit Holdings
to engage in any activities or incur any Indebtedness or Contingent Obligations
other than (a) owning the stock of the U.S. Borrower, (b) its activities
incident to the performance of the Credit Documents, including its guarantee
thereunder, (c) the consummation of the Transactions or (d) other transactions
as expressly permitted by this Agreement.
SECTION 10. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
events:
(a) The U.S. Borrower or the Canadian Borrower shall fail to (i) pay
any principal of any Loan, Bankers' Acceptance or Note when due in accordance
with the terms hereof or thereof or to reimburse the Issuing Lender in
accordance with subsection 3.8 or (ii) pay any interest on any Loan or Note or
any fee or other amount payable hereunder within five days after any such
interest or other amount becomes due in accordance with the terms thereof or
hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; provided that no Event of
Default shall occur (or be deemed to occur) as a result of the representations
and warranties made on the Closing Date unless any and all inaccuracies in such
representations and warranties, in the aggregate, would result in a "Material
Adverse Effect" (as defined in the Merger Agreement); or
(c) The U.S. Borrower shall default in the observance or performance
of any agreement contained in subsection 8.7(a) or 8.9 or Section 9 of this
Agreement; or
(d) Any Credit Party shall default in the observance or performance of
any other covenant or agreement contained in any Credit Document and such
default shall continue unremedied for a period of 30 days following written
notice of such default to the U.S. Borrower from the Administrative Agent; or
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(e) Holdings, the U.S. Borrower or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on or other amounts in
respect of any Indebtedness (other than the Loans, the Bankers' Acceptances, the
L/C Obligations and any intercompany debt) or Interest Rate Agreement or in the
payment of any Contingent Obligation, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness, Interest
Rate Agreement or Contingent Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness, Interest Rate Agreement or Contingent Obligation or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness, the party or parties to such Interest Rate Agreements or
beneficiary or beneficiaries of such Contingent Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity, any applicable grace period having expired, such
Interest Rate Agreement to be terminated, any applicable grace period having
expired or such Contingent Obligation to become payable, any applicable grace
period having expired; in each case; provided that the aggregate principal
amount (or net obligation) of all such Indebtedness, Interest Rate Agreements
and Contingent Obligations under which a default exists or which would then
become due or payable equals or exceeds $15,000,000; or
(f) (i) Holdings, the U.S. Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
Holdings, the U.S. Borrower or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against Holdings, the U.S. Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against Holdings, the U.S. Borrower
or any of its Subsidiaries any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) Holdings,
the U.S. Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings,
the U.S. Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts (other than
intercompany debts) as they become due; or
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(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
U.S. Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, or (v) the U.S. Borrower or any Commonly Controlled Entity shall, or in
the reasonable opinion of the Required Lenders is likely to, incur any liability
in connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan that, individually in the case of any event described in this
paragraph (g) or when taken together with all other events described in this
paragraph (g), would reasonably be expected to result in liability of the U.S.
Borrower in an aggregate amount exceeding $15,000,000; or
(h) One or more judgments or decrees shall be entered against
Holdings, the U.S. Borrower or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid or reserved for or to the extent
not covered by insurance or indemnities to the extent the U.S. Borrower, in its
reasonable good faith judgment, believes that such judgment or decree will be
paid when due by the parties providing such indemnities) of $15,000,000 or more
and all such judgments or decrees shall not have been vacated, discharged, paid,
stayed or bonded pending appeal within 60 days from the entry thereof; or
(i) Any Credit Document shall cease, for any reason, to be in full
force and effect (unless released by the Administrative Agent at the direction
of the Required Lenders or all Lenders (to the extent required by subsection
12.1) or as otherwise permitted under this Agreement or the other Credit
Documents) or any Credit Party or any of its Subsidiaries shall so assert in
writing, or any Security Document shall cease to be effective to grant a
perfected Lien on the collateral described therein with the priority purported
to be created thereby (other than as a result of any action or inaction on the
part of the Administrative Agent or the Lenders), subject to such exceptions as
may be permitted therein or herein, and in the case of any Security Agreement,
such condition shall continue unremedied for 30 days after notice thereof to the
U.S. Borrower by the Administrative Agent or any Lender; or
(j) There shall have occurred a Change of Control; or
(k) The subordination provisions of any document governing any of the
Existing Notes, the Borrower Bridge Subordinated Debt, the Permitted
Subordinated Debt, subordinated Indebtedness refinancing any of the foregoing
under subsection 9.1(f) or any Indebtedness permitted under subsection 9.1(i)
shall cease, for any reason, to be valid or any Credit Party or any of its
Subsidiaries shall so assert in writing;
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then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to Holdings or the
U.S. Borrower, automatically (i) the Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the Notes shall immediately become due and payable, and
(ii) all obligations of the U.S. Borrower in respect of the Letters of Credit,
although contingent and unmatured, shall become immediately due and payable and
the Issuing Lender's obligations to issue the Letters of Credit shall
immediately terminate and (b) if such event is any other Event of Default, so
long as any such Event of Default shall be continuing, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the U.S. Borrower, declare the
Commitments and the Issuing Lender's obligations to issue the Letters of Credit
to be terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to the U.S. Borrower, (A)
declare all or a portion of the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
and (B) declare all or a portion of the obligations of the U.S. Borrower in
respect of the Letters of Credit, although contingent and unmatured, to be due
and payable forthwith, whereupon the same shall immediately become due and
payable and/or demand that the U.S. Borrower discharge any or all of the
obligations supported by the Letters of Credit by paying or prepaying any amount
due or to become due in respect of such obligations. All payments under this
Section 10 on account of undrawn Letters of Credit shall be made by the U.S.
Borrower directly to a cash collateral account established by the Administrative
Agent for such purpose for application to the U.S. Borrower's reimbursement
obligations under subsection 3.8 as drafts are presented under the Letters of
Credit, with the balance, if any, to be applied to the U.S. Borrower's
obligations under this Agreement and the Notes as the Administrative Agent shall
determine with the approval of the Required Lenders. Except as expressly
provided above in this Section 10, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.
SECTION 11. THE ADMINISTRATIVE AGENTS; THE ISSUING LENDER
11.1 Appointment. Each Lender hereby irrevocably designates and
appoints CSFB as the Administrative Agent and Credit Suisse First Boston Toronto
Branch as the Canadian Administrative Agent under this Agreement and irrevocably
authorizes CSFB as Administrative Agent or Credit Suisse First Boston Toronto
Branch as Canadian Administrative Agent, as applicable, for such Lender to take
such action on its behalf under the provisions of the Credit Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Applicable Administrative Agent by the terms of the Credit Documents, together
with such other powers as are reasonably incidental thereto, including, without
limitation, in the case of the Administrative Agent, entering into the
Intercreditor Agreement with The Bank of Nova Scotia in substantially
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the form of Exhibit R. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the Administrative Agents shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the
Credit Documents or otherwise exist against either of the Administrative Agents.
11.2 Delegation of Duties. The Administrative Agents may execute any
of their respective duties under this Agreement and each of the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. Neither
Administrative Agent shall be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care, except as
otherwise provided in subsection 11.3.
11.3 Exculpatory Provisions. Neither of the Administrative Agents, nor
any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
the Credit Documents (except for its or such Person's own gross negligence or
willful misconduct, as determined in the final judgment of a court of competent
jurisdiction), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Credit Party or
any officer thereof contained in the Credit Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Applicable Administrative Agent under or in connection with, the Credit
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of the Credit Documents or for any failure of any Credit Party to
perform its obligations thereunder. Neither of the Administrative Agents shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, any Credit Document, or to inspect the properties, books or records of any
Credit Party.
11.4 Reliance by Administrative Agents. Each Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, entries maintained in the Registers, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any Borrowing Party), independent accountants and other
experts selected by either of the Administrative Agents. Each Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Applicable Administrative Agent. Each
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Credit Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, where a higher percentage of the
Lenders is expressly required hereunder, such Lenders) as it deems appropriate
or it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be
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incurred by it by reason of taking or continuing to take any such action. The
Administrative Agents shall in all cases be fully protected in acting, or in
refraining from acting, under any Credit Document in accordance with a request
of the Required Lenders (unless a higher percentage of Lenders is expressly
required), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
11.5 Notice of Default. Neither of the Administrative Agents shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Administrative Agent has received written notice
from a Lender or the U.S. Borrower or any other Credit Party referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that either of the Administrative
Agents receives such a notice, such Administrative Agent shall promptly give
notice thereof to the other Administrative Agent and to the Lenders. The
Administrative Agents shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agents shall have received
such directions, the Administrative Agents may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
11.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither of the Administrative Agents nor any
of their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
either of the Administrative Agents hereafter taken, including any review of the
affairs of the Credit Parties, shall be deemed to constitute any representation
or warranty by such Administrative Agent to any Lender. Each Lender represents
to the Administrative Agents that it has, independently and without reliance
upon the Administrative Agents or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of Holdings, the U.S. Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agents or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under the Credit Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Holdings, the U.S.
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Applicable
Administrative Agent hereunder, the Administrative Agents shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of the Credit Parties which may come into the
possession of the Administrative Agents or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
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11.7 Indemnification. The Lenders agree to indemnify each of the
Administrative Agents in its capacity as such (in each case to the extent not
reimbursed by the Credit Parties and without limiting the obligation of the
Credit Parties to do so), ratably according to the respective amounts of their
respective Commitments (or, to the extent such Commitments have been terminated,
according to the respective outstanding principal amounts of the Loans, Bankers'
Acceptances and the L/C Obligations and the respective obligations, whether as
Issuing Lender or a Participating Lender, under the Letters of Credit), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against either of the Administrative Agents, as applicable, in any way relating
to or arising out of the Credit Documents or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted by either of the Administrative Agents, as applicable, under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Applicable Administrative Agent's gross negligence or
willful misconduct, as determined in the final judgment of a court of competent
jurisdiction. The agreements in this subsection 11.7 shall survive the repayment
of the Loans and all other amounts payable hereunder.
11.8 The Administrative Agents in their Individual Capacities. Each of
the Administrative Agents and their respective Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with Holdings,
the U.S. Borrower and its Subsidiaries as though such Administrative Agent were
not an Administrative Agent hereunder. With respect to its Loans made or renewed
by it and any Note issued to it, each Administrative Agent shall have the same
rights and powers, duties and liabilities under the Credit Documents as any
Lender and may exercise the same as though it were not an Administrative Agent
and the terms "Lender" and "Lenders" shall include the Administrative Agents in
their respective individual capacities.
11.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders, and the
Administrative Agent may be removed as Administrative Agent by the U.S. Borrower
upon 30 days' notice to the Administrative Agent. If the Administrative Agent
shall so resign or be so removed as Administrative Agent under the Credit
Documents, then, (i) if Deutsche Bank AG or one of its Affiliates is a Lender
hereunder at such time and it accepts such appointment in its sole discretion,
Deutsche Bank AG (acting through a branch to be determined by it) shall become
the successor Administrative Agent for the Lenders or (ii) if neither Deutsche
Bank AG nor any of its Affiliates is a Lender hereunder at such time or Deutsche
Bank AG is unwilling to accept such appointment as successor Administrative
Agent, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall, so long as no Event
of Default has occurred and is continuing, be approved by the U.S. Borrower,
which shall not unreasonably withhold its approval, whereupon, in either such
case, such
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successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 11 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Administrative Agent under the Credit Documents. The provisions of this
subsection 11.9 shall apply mutatis mutandis to the resignation and removal of
the Canadian Administrative Agent.
11.10 Issuing Lender as Issuer of Letters of Credit. Each U.S.
Revolving Credit Lender hereby acknowledges that the provisions of this Section
11 shall apply to the Issuing Lender, in its capacity as issuer of the Letters
of Credit, in the same manner as such provisions are expressly stated to apply
to the Administrative Agent, except that obligations to indemnify the Issuing
Lender shall be ratable among the U.S. Revolving Credit Lenders in accordance
with their respective U.S. Revolving Credit Commitments (or, if the U.S.
Revolving Credit Commitments have been terminated, the outstanding principal
amount of their respective U.S. Revolving Credit Loans and L/C Obligations and
their respective participating interests in the outstanding Letters of Credit).
11.11 Administrative Agent as Joint and Several Creditor. Solely for
purposes of the pledge of shares of Jostens Can Investments B.V., a Netherlands
corporation and Jostens International Holdings B.V., a Netherlands corporation,
the U.S. Borrower and each Lender agree that the Administrative Agent shall be
the joint and several creditor (together with the relevant Lenders) of each
obligation of the U.S. Borrower towards each Lender under the Credit Documents,
and that accordingly, the Administrative Agent will have its own independent
right to demand performance by the U.S. Borrower of those obligations. However,
(i) any discharge of any such obligation to one of the Administrative Agent or a
Lender shall, to the same extent, discharge the corresponding obligation owing
to the other, and (ii) a Lender and the Administrative Agent shall not, by
virtue of this subsection 11.11, be entitled to pursue the U.S. Borrower
concurrently for the same obligation.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Except as otherwise expressly set forth
in this Agreement, no Credit Document nor any terms thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of
this subsection 12.1. With the written consent of the Required Lenders, the
Administrative Agent and the respective Credit Parties may, from time to time,
enter into written amendments, supplements or modifications hereto or to any
other Credit Document for the purpose of adding any provisions to any Credit
Document to which they are parties or changing in any manner the rights of the
Lenders or of any such Credit Party thereunder or waiving, on such terms and
conditions as the Administrative Agent may specify in
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such instrument, any of the requirements of any such Credit Document or any
Default or Event of Default and its consequences; provided that:
(a) no such waiver and no such amendment, supplement or modification
shall (i) release all or substantially all of the Collateral without the written
consent of all Lenders or (ii) release Collateral not required or permitted by
any Credit Document to be released and which, in the aggregate with all other
Collateral released pursuant to this clause (a) (ii) (other than Collateral
released pursuant to the proviso to this clause (a)) during the calendar year in
which such proposed release would be effected and the immediately preceding
calendar year, has fair market value on the proposed date of release in excess
of 20% of the fair market value of all Collateral (including any Guarantee) on
such date without the written consent of the Supermajority Lenders; provided
that, notwithstanding the foregoing, this clause (a) shall not be applicable to
and no consent shall be required for (i) releases of Collateral in connection
with any dispositions permitted by subsection 9.5, (ii) releases of Collateral
in accordance with subsection 12.11 or (iii) upon the reincorporation of
Holdings, the U.S. Borrower or any Subsidiary in a new jurisdiction or the
creation of a new Subsidiary of the U.S. Borrower, any release of Collateral in
connection with the transfer of such released Collateral to such reincorporated
entity or new Subsidiary in compliance with subsection 9.4; provided that the
Administrative Agent, in its sole discretion, determines that such release and
transfer, together with any grant and perfection of a new Lien therein in favor
of the Administrative Agent, will cause no material impairment of the value of
the Collateral taken as a whole, after giving effect to such release and
transfer;
(b) except as provided in subsection 12.1(d), no such waiver and no
such amendment, supplement or modification shall extend the final maturity date
or termination date of any Loan or Commitment or the scheduled payment date of
any installment of any Loan, or reduce the rate or extend the time of payment of
interest thereon (it being understood and agreed that neither changes to the
definitions of Consolidated EBITDA, Consolidated Indebtedness or Leverage Ratio
(or any other component definition of any of the foregoing) nor the election not
to impose (or once imposed, an election to rescind) the default rate of interest
provided for in the Credit Documents shall be (or be deemed to be) a reduction
in the rate of interest payable hereunder for the purposes of this subsection
12.1(b)), or reduce or extend the time of payment of any fee payable to the
Lenders hereunder, or reduce the principal amount of any Loan, or change the
amount of any Lender's Commitment or Commitment Percentage, or require any
Lender to offer Interest Periods of greater than six months, in each case,
without the prior written consent of each Lender directly affected thereby;
(c) no such waiver and no such amendment, supplement or modification
affecting the then Administrative Agent, the Canadian Administrative Agent or
Issuing Lender shall amend, modify or waive any provision of Section 11 without
the written consent of such Administrative Agent, the Canadian Administrative
Agent or Issuing Lender, as the case may be;
(d) without the consent of each of the Revolving Credit Lenders, each
of the Term Loan Lenders may amend this Agreement and the Term Notes to extend
the
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maturities of the installments of the Term Loans; and without the consent of
each of the Lenders which are holders of the Term Loans only, each of the
Revolving Credit Lenders may amend this Agreement and the Revolving Credit Notes
to extend the Revolving Credit Termination Date;
(e) no such waiver, and no such amendment, supplement or modification
shall amend, modify or waive the order of application of prepayments specified
in subsection 5.4(a) or subsections 5.4(b)(i) through 5.4(b)(iv) without the
written consent of the holders of more than 50% of each of (i) the aggregate
unpaid principal amount of the Term Loans, if any, and (ii) the Revolving Credit
Commitments or, if the Revolving Credit Commitments are terminated, the
aggregate unpaid principal amount of the Revolving Credit Loans (the Term Loans
and the Revolving Credit Commitments of any Non-Funding Lender to be disregarded
in determining such percentage at any time);
(f) no such waiver and no such amendment, supplement or modification
shall amend, modify or waive any provision of subsection 5.9(a) or (b) or this
subsection 12.1 or reduce the percentage specified in (or otherwise modify) the
definition of Required Lenders or Supermajority Lenders or consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under any Credit Agreement, in each case without the prior written consent of
each Lender;
any such waiver and any such amendment, supplement or modification described in
this subsection 12.1 shall apply equally to each of the Lenders and shall be
binding upon each Credit Party and its Subsidiaries, the Lenders, the
Administrative Agents and the Issuing Lender and all future holders of the Notes
and the Loans. Any extension of a Letter of Credit by the Issuing Lender shall
be treated hereunder as a new Letter of Credit. In the case of any waiver, the
Credit Parties, the Lenders, the Administrative Agents and Issuing Lender shall
be restored to their former position and rights hereunder and under the
outstanding Notes, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.
12.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when sent, confirmation of receipt received, or,
in the case of telex notice, when sent, answerback received, addressed as
follows in the case of the U.S. Borrower, the Canadian Borrower, the
Administrative Agent, or the Canadian Administrative Agent and as set forth in
Schedule I in the case of any Lender, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The U.S. Borrower: Jostens, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
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Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
With a copy to: DLJ Merchant Banking III, Inc.
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
With a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
The Canadian Borrower: Jostens Canada Ltd.
000-000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx X0X0X0
Attention: Xxxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
With a copy to: DLJ Merchant Banking III, Inc.
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
The Administrative Agent, Credit Suisse First Boston
Swing Line Lender and Eleven Madison Avenue
Issuing Lender: XXX-0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Group Manager
Telecopy: (000) 000-0000
With a copy to: Credit Suisse First Boson
Eleven Madison Avenue
New York, NY 10010
Attention: Xxxxxx Xxxx
Telecopy: (000) 000-0000
The Canadian Credit Suisse First Boston Toronto
Administrative Agent: Branch
One First Canadian Place,
Suite 3000, X.X. Xxx 000,
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
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Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent,
the Canadian Administrative Agent or the Lenders pursuant to subsections 3.4,
3.5, 5.1, 5.2, 5.3 and 5.4 shall not be effective until received and; provided,
further, that the failure to provide the copies of notices to the U.S. Borrower
or the Canadian Borrower provided for in this subsection 12.2 shall not result
in any liability to either of the Administrative Agents.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of either of the Administrative Agents or any
Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
12.4 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Letters of Credit and the Notes.
12.5 Payment of Expenses and Taxes. The U.S. Borrower agrees (a) to
pay or reimburse the Administrative Agent, the Arrangers and the Canadian
Administrative Agent for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, negotiation, preparation and
execution of the Credit Documents and any other documents prepared in connection
herewith, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
one counsel to the Administrative Agent, the Arrangers and the Canadian
Administrative Agent in each relevant jurisdiction (all of the foregoing being
subject in the case of the Arrangers to the terms of the Assignment Letter
Agreement dated as of July 3, 2003, among CSFB, Credit Suisse First Boston LLC,
Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc. and the
U.S. Borrower), (b) to pay or reimburse all of the reasonable expenses,
including without limitation, reasonable fees and expenses of counsel, incurred
by the Administrative Agent and the Canadian Administrative Agent in connection
with the administration of the facilities provided for herein or in connection
with any amendments, waivers, work-outs or restructurings in respect thereof,
(c) to pay or reimburse the Administrative Agent, the Arrangers, the Canadian
Administrative Agent, the Issuing Lender and each Lender for all their costs and
expenses incurred in connection with, and to pay, indemnify, and hold the
Administrative Agent, the Arrangers, the Canadian Administrative Agent, the
Issuing Lender and each Lender harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever arising out of
or in connection with, the enforcement or preservation of any rights under any
Credit Document and any such other documents, including, without
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limitation, reasonable fees and disbursements of one counsel in each relevant
jurisdiction to the Administrative Agent incurred in connection with the
foregoing and in connection with advising the Administrative Agent with respect
to its rights and responsibilities under this Agreement and the documentation
relating thereto, and, at any time after and during the continuance of an Event
of Default, one counsel in each relevant jurisdiction to the Lenders, (d) to
pay, indemnify, and to hold each Administrative Agent, the Arrangers and each
Lender harmless from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay (other than to the
extent attributable to such Administrative Agent, Arranger or Lender) in paying,
stamp, excise and other similar taxes (other than withholding taxes), if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, any Credit Document and any such other
documents, and (e) to pay, indemnify, and hold the Administrative Agent, the
Arrangers, the Canadian Administrative Agent, the Issuing Lender and each Lender
and their respective Affiliates, officers, directors and trustees harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and
disbursements of counsel) which may be incurred by or asserted against the
Administrative Agent, the Arrangers, the Canadian Administrative Agent, the
Issuing Lender or the Lenders or such Affiliates, officers, directors or
trustees (x) arising out of or in connection with any investigation, litigation
or proceeding related to this Agreement, the other Credit Documents, the
proceeds of the Loans and the transactions contemplated by or in respect of such
use of proceeds, or any of the other transactions contemplated hereby, whether
or not the Administrative Agent, the Arrangers, the Canadian Administrative
Agent, the Issuing Lender or any of the Lenders or such Affiliates, officers,
directors or trustees is a party thereto, including, without limitation, any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to Holdings, the U.S. Borrower, any of
its Subsidiaries or any of the facilities and properties owned, leased or
operated by Holdings, the U.S. Borrower or any of its Subsidiaries, or (y)
without limiting the generality of the foregoing, by reason of or in connection
with the execution and delivery or transfer of, or payment or failure to make
payments under, Letters of Credit (it being agreed that nothing in this
subsection 12.5(d)(y) is intended to limit the U.S. Borrower's obligations
pursuant to subsection 3.8) (all the foregoing, collectively, the "indemnified
liabilities"); provided that the U.S. Borrower shall have no obligation
hereunder with respect to indemnified liabilities of the Administrative Agent,
the Arrangers, the Canadian Administrative Agent, the Issuing Lender or any
Lender or any of their respective Affiliates, officers, directors and trustees
arising from (i) the gross negligence or willful misconduct of, or material
breach of its obligations under this Agreement and the other Credit Documents
by, the person seeking indemnification (to the extent so determined in the final
judgment of a court of competent jurisdiction) or (ii) legal proceedings
commenced against the Administrative Agent, the Arrangers, the Canadian
Administrative Agent, the Issuing Lender or Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such or (iii) legal proceedings
commenced against the
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Administrative Agent, the Arrangers, the Canadian Administrative Agent, the
Issuing Lender or any such Lender by any Transferee (as defined in subsection
12.6). Without limiting the foregoing, and to the extent permitted by applicable
law, each of Holdings and the U.S. Borrower agrees not to assert, and hereby
waives (and shall cause their respective Subsidiaries not to assert and to
waive) all rights for contribution or any other rights of recovery with respect
to all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever, under
or related to Environmental Laws, that any of them might have by statute or
otherwise against the Administrative Agent, the Arrangers, the Canadian
Administrative Agent, the Issuing Lender or any Lender, except to the extent any
of the foregoing (i) arise as a result of the gross negligence of wilful
misconduct of the Administrative Agent, the Arrangers, the Canadian
Administrative Agent, the Issuing Lender or any Lender (to the extent so
determined in the final judgment of a court of competent jurisdiction) or (ii)
relate to any violation of Environmental Laws that first occurred on or with
respect to any real property after such real property has been transferred to
the Applicable Administrative Agent by foreclosure, sale, deed in lieu of
foreclosure or other similar transfer. The agreements in this subsection 12.5
shall survive repayment of the Loans and all other amounts payable hereunder.
12.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the U.S. Borrower,
the Canadian Borrower, the Lenders, the Administrative Agent, the Arrangers, the
Canadian Administrative Agent, all future holders of the Notes and the Loans,
and their respective successors and assigns, except that none of Holdings, the
U.S. Borrower or the Canadian Borrower may assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of the
Administrative Agent, the Canadian Administrative Agent, the Issuing Lender and
each Lender, and any attempted assignment without such consent shall be null and
void.
(b) Any Lender may, in the ordinary course of its commercial banking,
lending or investment business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any participating interest in the
Letters of Credit of such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder. In the event of
any such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the relevant Borrowing Party and the
Applicable Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Credit Documents. The Borrowing Parties agree that if
amounts outstanding under this Agreement and the Notes are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
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Agreement or any Note; provided that such right of setoff shall be subject to
the obligation of such Participant to share with the Lenders, and the Lenders
agree to share with such Participant, as provided in subsection 12.7. The
Borrowing Parties also agree that each Participant shall be entitled to the
benefits of subsections 3.10, 5.11 and 5.12 with respect to its participation in
the Letters of Credit, if applicable, and in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided that in the case
of subsection 5.11(e), such Participant shall have complied with the
requirements of such subsection; provided further that no Participant shall be
entitled to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred. Each Lender agrees that the participation
agreement pursuant to which any Participant acquires its participating interest
(or any other document) may afford voting rights to such Participant, or any
right to instruct such Lender with respect to voting hereunder, only with
respect to matters requiring the consent of either all of the Lenders hereunder
or all of the Lenders holding the relevant Term Loans or Revolving Credit
Commitments subject to such participation. In each case in which a Lender has
sold a participating interest to a Participant pursuant to this Section 12.6,
such Lender shall maintain a register and record therein the amounts of such
Participant's entitlement to payments of principal and interest with respect to
such participating interest.
(c) Subject to paragraph (h) of this subsection 12.6, any Lender may,
in the ordinary course of its commercial banking, lending or investment business
and in accordance with applicable law, (i) at any time and from time to time
assign all or any part of its rights and obligations under this Agreement and
the Notes to any Lender or any Affiliate thereof or any Related Fund; provided
that, in the event of a sale of less than all of such rights and obligations,
such assigning Lender after any such sale to any other Lender or any Affiliate
or Related Fund of such Lender shall retain Commitments and/or Loans and/or L/C
Participating Interests aggregating at least $1,000,000 (or such lesser amount
as the Applicable Administrative Agent may determine) and (ii) with the consent
of the U.S. Borrower (on its own behalf and, if applicable, on behalf of the
Canadian Borrower; provided that such consent shall not be required after the
occurrence and during the continuance of an Event of Default, or if such
assignment is made in connection with the primary syndication of the Revolving
Credit Commitments or the Term Loans to Persons previously identified to the
U.S. Borrower in writing and agreed to by the U.S. Borrower), and the Applicable
Administrative Agent (which in each case shall not be unreasonably withheld or
delayed) at any time and from time to time assign to one or more additional
banks, mutual funds or financial institutions or other entities who invest in
commercial loans (each, an "Assignee"), all or any part of its rights and
obligations under this Agreement and the Notes, pursuant to an Assignment and
Acceptance, executed by such Assignee, such transferor Lender (and, except as
provided in clause (i) above, in the case of an Assignee that is not then a
Lender or an Affiliate or Related Fund thereof, by the U.S. Borrower (on its own
behalf and, if applicable, on behalf of the Canadian Borrower) and the
Applicable Administrative Agent), and delivered to the Applicable Administrative
Agent for its acceptance and recording in the applicable Register; provided that
(A) each such sale pursuant to clause (ii) of this subsection 12.6(c) shall be
in a principal amount of at least $1,000,000 (or such lesser
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amount as the Applicable Administrative Agent and the U.S. Borrower may
determine) unless the assigning Lender is transferring all of its rights and
obligations and (B) in the event of a sale of less than all of such rights and
obligations, such Lender after any such sale shall retain Commitments and/or
Loans and/or L/C Participating Interests aggregating at least $1,000,000 (or
such lesser amount as the Applicable Administrative Agent and the U.S. Borrower
may determine). In lieu of manually executing and delivering to the Applicable
Administrative Agent any such Assignment and Acceptance, the parties to such
assignment may electronically execute and deliver to the Applicable
Administrative Agent an Assignment and Acceptance via an electronic settlement
system acceptable to the Applicable Administrative Agent (which initially shall
be ClearPar, LLC). Upon such execution, delivery, acceptance and recording in
the applicable Register, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent of the
interest transferred, as reflected in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a transferor
Lender's rights and obligations under this Agreement, such transferor Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of the indemnification provisions set forth in subsection 12.5).
(d) Each Applicable Administrative Agent, on behalf of the Lenders for
the benefit of the Borrowing Parties, shall maintain at the address of such
Administrative Agent referred to in subsection 12.2 a copy of each Assignment
and Acceptance delivered to it and a register (each, a "Register" and
collectively, the "Registers") for the recordation of the names and addresses of
the U.S. Lenders or Canadian Lenders, as applicable, and (i) the Commitment of
each such Lender and the amount of each U.S. Loan or Canadian Loan, as
applicable, made hereunder, the Type thereof and each Interest Period applicable
thereto, (ii) any Note evidencing such Loan, (iii) the amounts of any principal
or interest due and payable, or to become due and payable, from the U.S.
Borrower or the Canadian Borrower, as applicable, to each such Lender hereunder,
(iv) the amounts of any principal or interest paid to, or for the account of,
each such Lender hereunder, and (v) the amounts of any sums received by such
Administrative Agent hereunder from the U.S. Borrower or the Canadian Borrower,
as applicable, as well as each such Lender's share thereof. The entries in the
Registers shall be conclusive, in the absence of manifest error, and the U.S.
Borrower, the Canadian Borrower, the Administrative Agents and the Lenders shall
treat each Person whose name is recorded in the Registers as the owner of a Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Credit Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder shall be
effective only upon appropriate entries with respect thereto being made in the
applicable Register. The Registers shall be available for inspection by the U.S.
Borrower, the Canadian Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate or a Related Fund thereof, by the U.S. Borrower
(on its own behalf and, if applicable, on behalf of the Canadian Borrower) and
the Applicable Administrative Agent), together with payment to the Applicable
Administrative Agent of a registration and processing fee of $3,500 (unless (w)
such Assignment and Acceptance is electronically executed and delivered as
provided in subsection 12.6(b)), (x) such fee is waived at the discretion of the
Applicable Administrative Agent or (y) the assigning Lender is a predecessor
Administrative Agent that has been removed in accordance with subsection 11.9,
in which case such fee shall not apply), the Applicable Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the applicable Register and give notice of such acceptance and
recordation to the U.S. Borrower and the Canadian Borrower, if applicable (no
such assignment shall become effective unless and until so recorded); provided
that, in the case of contemporaneous assignments by a Lender to more than one
Related Fund, only a single $3,500 fee shall be payable for all such
contemporaneous assignments (unless such fee is inapplicable or waived as
provided above). On or prior to such effective date, the U.S. Borrower or the
Canadian Borrower, as applicable, at its own expense, shall execute and deliver
to the Applicable Administrative Agent (in exchange for any or all of the Term
Loan Notes, Revolving Credit Notes or C$ Notes of the assigning Lender, if any)
new Term Loan Notes, Revolving Credit Notes or C$ Notes, as the case may be, to
the order of such Assignee and its registered assigns (if requested) in an
amount equal to the Revolving Credit Commitment, the Term Loans or the C$ Prime
Loans, as the case may be, assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment or any Term
Loans or C$ Prime Loans hereunder, new Term Loan Notes, Revolving Credit Notes
or C$ Notes, as the case may be, to the order of the assigning Lender and its
registered assigns in an amount equal to the Commitment or such Term Loans or C$
Prime Loans, as the case may be, retained by it hereunder (if requested). Such
new Notes shall be dated the Closing Date and shall otherwise be in the form of
the Notes replaced thereby.
(f) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Applicable Administrative Agent and the U.S. Borrower or the Canadian
Borrower, as applicable, the option to provide to either Borrowing Party all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make to such Borrowing Party pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
if an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof and (iii) with respect to an SPC of a Canadian
Lender, such SPC shall be a resident of Canada for purposes of the ITA. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In
128
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this subsection 12.6, any SPC may (i) with
notice to, but without the prior written consent of, the applicable Borrowing
Party and the Applicable Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loans to the
Granting Lender or to any financial institutions (consented to by the U.S.
Borrower or the Canadian Borrower, as applicable, and the Applicable
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. For the avoidance of
doubt, the Granting Lender shall for all purposes, including the approval of any
amendment or waiver or any provision of any Credit Document or the obligation to
pay any amount payable by the Granting Lender under the Credit Documents
continue to be the Lender of record hereunder. In each case in which a Lender
has granted to an SPC the option to provide to the U.S. Borrower all or any part
of a Loan that such Lender would otherwise be obligated to make hereunder, such
Lender shall (i) maintain a register and record therein the amounts of such
SPC's entitlement to payments of principal and interest with respect to such
Loan, and (ii) collect from such SPC, prior to such SPC's receipt of payments
with respect to such Loan, the forms, certificates, and statements required
pursuant to Section 5.11 hereof, as if such SPC were a Lender. In each case in
which such SPC has assigned all or a portion of its interest in any Loan to any
financial institution pursuant to this Section 12.6(f), such SPC shall (i)
maintain a register and record therein the amounts of the entitlement of such
financial institution to payments of principal and interest with respect to such
Loan, and (ii) collect from such financial institution, prior to the receipt by
such financial institution of payments with respect to such Loan, the forms,
certificates, and statements required pursuant to Section 5.11 hereof.
(g) The Administrative Agent, the Arrangers, the Canadian
Administrative Agent and the Lenders agree that they will use reasonable efforts
to protect the confidentiality of any confidential information concerning
Holdings, the U.S. Borrower and its Subsidiaries and Affiliates. Notwithstanding
the foregoing, each of the U.S. Borrower and the Canadian Borrower authorizes
each Lender to disclose (i) to its employees, officers, Affiliates and advisors,
who shall be bound by the confidentiality provisions hereof and who shall use
such information only for purposes of preserving, exercising or enforcing the
rights of such Lender hereunder, (ii) to any regulatory authority as required by
law, (iii) in connection with any enforcement or other legal action (in which
case, such Person agrees to inform the U.S. Borrower prior to making such
disclosure to the extent it is reasonably practicable to do so) and (iv) to any
Participant, Assignee or pledgee (each, a "Transferee") and any prospective
Transferee or to any direct or indirect contractual counterparty under a swap
agreement that relates to
129
any Loan (or to such contractual counterparty's professional advisor), any and
all information in such Lender's possession concerning Holdings, the U.S.
Borrower and its Subsidiaries which has been delivered to such Lender by or on
behalf of the U.S. Borrower or the Canadian Borrower pursuant to this Agreement
or which has been delivered to such Lender by or on behalf of the U.S. Borrower
or the Canadian Borrower in connection with such Lender's credit evaluation of
the U.S. Borrower and its Subsidiaries prior to becoming a party to this
Agreement; provided that each Lender shall cause its respective prospective
Transferees and swap counterparties (and their professional advisors), to agree
in writing to protect the confidentiality of any confidential information
concerning Holdings, the U.S. Borrower and its Subsidiaries and Affiliates in
accordance with the provisions of this paragraph (g).
(h) If, pursuant to this subsection 12.6, any interest in this
Agreement or any Note is transferred to any Transferee which is organized under
the laws of any jurisdiction other than the United States or any State thereof,
the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the terms of this Agreement
including without limitation subsection 5.11(e).
(i) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
12.7 Adjustments; Set-off. (a) If any relevant U.S. Lender or Canadian
Lender, as applicable (a "benefitted Lender") shall at any time receive any
payment of all or part of any of its Loans or L/C Participating Interests, as
the case may be, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in clause (f) of Section 10, or otherwise)
in a greater proportion than any such payment to and collateral received by any
other relevant U.S. Lender or Canadian Lender, as applicable, if any, in respect
of such other relevant Lender's Loans or L/C Participating Interests, as the
case may be, or interest thereon, in each case except as otherwise contemplated
by this Agreement such benefitted Lender shall purchase for cash from the other
relevant U.S. Lenders or Canadian Lenders, as applicable, such portion of each
such other relevant Lender's Loans or L/C Participating Interests, as the case
may be, or shall provide such other relevant Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the relevant U.S. Lenders or Canadian Lenders, as
applicable; provided that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. Subject to paragraph (b) of this
subsection 12.7, the Borrowing Parties agree that each Lender so purchasing a
portion of another Lender's
130
Loans and/or L/C Participating Interests may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion. The
Applicable Administrative Agent shall promptly give the applicable Borrowing
Party notice of any set-off; provided that the failure to give such notice shall
not affect the validity of such set-off.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to Holdings, the
U.S. Borrower or the Canadian Borrower, any such notice being expressly waived
by Holdings, the U.S. Borrower and the Canadian Borrower to the extent permitted
by applicable law, upon the filing of a petition under any of the provisions of
the Bankruptcy Code or amendments thereto (or in the case of the Canadian
Borrower, any comparable law or statute), by or against; the making of an
assignment for the benefit of creditors by; the application for the appointment,
or the appointment, of any receiver of, or of any substantial portion of the
property of; the issuance of any execution against any substantial portion of
the property of; the issuance of a subpoena or order, in supplementary
proceedings, against or with respect to any substantial portion of the property
of; or the issuance of a warrant of attachment against any substantial portion
of the property of; Holdings, the U.S. Borrower or the Canadian Borrower, to set
off and apply against any indebtedness, whether matured or unmatured, of
Holdings, the U.S. Borrower or the Canadian Borrower to such Lender, any amount
owing from such Lender to Holdings, the U.S. Borrower or the Canadian Borrower,
at or at any time after, the happening of any of the above mentioned events. The
aforesaid right of set-off may be exercised by such Lender against Holdings, the
U.S. Borrower or the Canadian Borrower or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of Holdings, the U.S. Borrower or the
Canadian Borrower, or against anyone else claiming through or against Holdings,
the U.S. Borrower or the Canadian Borrower or such trustee in bankruptcy, debtor
in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the making, filing
or issuance, or service upon such Lender of, or of notice of, any such petition;
assignment for the benefit of creditors; appointment or application for the
appointment of a receiver; or issuance of execution, subpoena, order or warrant.
Each Lender agrees promptly to notify Holdings, the U.S. Borrower or the
Canadian Borrower, as applicable, and the Applicable Administrative Agent after
any such set-off and application made by such Lender; provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
12.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, including
by means of facsimile, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the U.S. Borrower and
each of the Administrative Agents. This Agreement shall become effective with
respect to Holdings, the U.S. Borrower, the Canadian Borrower, the
Administrative
131
Agent, the Canadian Administrative Agent and the Lenders when the Administrative
Agent shall have received copies of this Agreement executed by Holdings, the
U.S. Borrower, the Canadian Borrower, the Administrative Agent, the Canadian
Administrative Agent and the Lenders, or, in the case of any Lender, shall have
received telephonic confirmation from such Lender stating that such Lender has
executed counterparts of this Agreement or the signature pages hereto and sent
the same to the Administrative Agent.
12.9 Governing Law; No Third Party Rights. This Agreement and the
Notes and the rights and obligations of the parties under this Agreement and the
Notes shall be governed by, and construed and interpreted in accordance with,
the law of the State of New York. This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and, except as
set forth in subsection 12.6, no other Persons shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.
12.10 Submission to Jurisdiction; Waivers. (a) Each party to this
Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any of the other Credit Documents,
or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in subsection 12.2 or at
such other address of which the Applicable Administrative Agent shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in any
legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
12.11 Releases. The Administrative Agents and the Lenders agree to
cooperate with Holdings, the U.S. Borrower and its Subsidiaries with respect to
any sale or other disposition permitted by subsection 9.5 and promptly take such
action and execute and deliver such instruments and documents necessary to
release the liens and security interests created by the Security Documents
relating to any of the assets or
132
property affected by any such sale permitted by subsection 9.5, including,
without limitation, any Uniform Commercial Code or PPSA amendment, release or
termination or partial release or termination statements.
12.12 Interest. Each provision in this Agreement and each other Credit
Document is expressly limited so that in no event whatsoever shall the amount
paid, or otherwise agreed to be paid, by the Borrowing Parties for the use,
forbearance or detention of the money to be loaned under this Agreement or any
other Credit Document or otherwise (including any sums paid as required by any
covenant or obligation contained herein or in any other Credit Document which is
for the use, forbearance or detention of such money), exceed that amount of
money which would cause the effective rate of interest to exceed the highest
lawful rate permitted by applicable law (the "Highest Lawful Rate"), and all
amounts owed under this Agreement and each other Credit Document shall be held
to be subject to reduction to the effect that such amounts so paid or agreed to
be paid which are for the use, forbearance or detention of money under this
Agreement or such other Credit Document shall in no event exceed that amount of
money which would cause the effective rate of interest to exceed the Highest
Lawful Rate. Notwithstanding any provision in this Agreement or any other Credit
Document to the contrary, if the maturity of the Loans or the obligations in
respect of the other Credit Documents are accelerated for any reason, or in the
event of any prepayment of all or any portion of the Loans or the obligations in
respect of the other Credit Documents by either of the Borrowing Parties or in
any other event, earned interest on the Loans and such other obligations of the
applicable Borrowing Party may never exceed the Highest Lawful Rate, and any
unearned interest otherwise payable on the Loans or the obligations in respect
of the other Credit Documents that is in excess of the Highest Lawful Rate shall
be canceled automatically as of the date of such acceleration or prepayment or
other such event and (if theretofore paid) shall, at the option of the holder of
the Loans or such other obligations, be either refunded to the applicable
Borrowing Party or credited on the principal of the Loans. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Highest Lawful Rate, the applicable Borrowing Party and the Lenders
shall, to the maximum extent permitted by applicable law, amortize, prorate,
allocate and spread, in equal parts during the period of the actual term of this
Agreement, all interest at any time contracted for, charged, received or
reserved in connection with this Agreement.
12.13 Special Indemnification. Notwithstanding any provision in this
Agreement to the contrary, (A) each Lender, or Transferee of any Lender pursuant
to subsection 12.6(g) of this Agreement, shall indemnify the U.S. Borrower, the
Canadian Borrower and each of the Administrative Agents, and hold each of them
harmless against any and all payments, expenses or taxes which the U.S.
Borrower, the Canadian Borrower or either of the Administrative Agents may
become subject to or obligated to pay if and to the extent that, (i) on the
Closing Date or the effective date of transfer, as the case may be, such Lender,
or such Transferee of a Lender pursuant to subsection 12.6(g) of this Agreement,
(a) makes the representation and covenants set forth in subsection 5.11(e) of
this Agreement and the Assignment and Acceptance, and (b) is not in fact also
qualified to make the representation and covenants set forth in subsection
5.11(e) of this Agreement and the Assignment and Acceptance, and (ii) as a
133
result of any Change in Law or compliance by such Lender, or Transferee, with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority the U.S. Borrower, the Canadian
Borrower or either of the Administrative Agents is required to make any
additional payments on account of U.S. withholding taxes and amounts related
thereto with respect to any payments under this Agreement, any Note, or a
Eurodollar Loan, made prior to such Change in Law or request or directive, none
of which payments would have been required if such Lender, or Transferee, was
qualified on the Closing Date or the date of the transfer, as the case may be,
to make the representation and covenants set forth in subsection 5.11(e) of this
Agreement and the Assignment and Acceptance, as the case may be, and (B) each
Lender, or Transferee of any Lender pursuant to subsection 12.6(g) of this
Agreement, agrees that to the extent any amount payable by such Lender or
Transferee pursuant to this subsection 12.13 remains unpaid on any Interest
Payment Date or the date on which any prepayment is made, the U.S. Borrower or
the Canadian Borrower, as the case may be, shall have the right to set-off
against any payment due to such Lender or Transferee on such date any amounts
owing to the U.S. Borrower or the Canadian Borrower, as the case may be,
pursuant to this subsection 12.13.
12.14 Tax Disclosure. Notwithstanding anything herein to the contrary,
any party subject to confidentiality obligations hereunder or under any other
related document (and any employee, representative or other agent of such party)
may disclose to any and all Persons, without limitation of any kind, such
party's U.S. federal income tax treatment and the U.S. federal income tax
structure of the transactions contemplated hereby relating to such party and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
such party shall disclose any information relating to such tax treatment or tax
structure to the extent nondisclosure is reasonably necessary in order to comply
with applicable securities laws. This paragraph is intended to cause the
transactions contemplated hereby not to be treated as having been offered under
conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any
successor provision) of the Treasury Regulations promulgated under Section 6011
of the Code, and shall be construed in a manner consistent with such purpose. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to the tax structure of the transactions contemplated hereby or any tax
matter or tax idea related to such transactions.
12.15 Documentation Agents. None of the Documentation Agents shall
have any duties or obligations under this Agreement or the other Credit
Documents, express or implied. None of the Documentation Agents shall incur any
personal liability by reason of being named as a Documentation Agent hereunder.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
134
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
RING ACQUISITION CORP., as Borrower
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President and Secretary
JOSTENS CANADA LTD., as Canadian Borrower
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
RING IH CORP.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President and Secretary
CREDIT SUISSE FIRST BOSTON, acting
through its New York branch, individually
and as Administrative Agent, Issuing
Lender and Swing Line Lender
By: /s/ Xxxxxx Xxxx
-------------------------------------
Name: Xxxxxx Xxxx
Title: Director
By: /s/ Xxxxxx XxXxxxx
-------------------------------------
Name: Xxxxxx XxXxxxx
Title: Assistant Vice President
CREDIT SUISSE FIRST BOSTON
TORONTO BRANCH,
individually and as Canadian
Administrative Agent
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Director
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
DEUTSCHE BANK AG CAYMAN
ISLANDS BRANCH
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
[SIGNATURE PAGES OF OTHER LENDERS FOLLOW]
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Allied Irish Banks, p.l.c.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Bank One, NA
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: The Bank of New York
By: /s/ Xxxx-Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx-Xxxx Xxxxxxx
Title: Vice President
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: The Bank of Nova Scotia
By: /s/ X. Xxxx
-------------------------------------
Name: X. Xxxx
Title: Senior Manager
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Bank of Tokyo-Mitsubishi Trust Company
By: /s/ Xxxx Xxxxxxxxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxxxxxx Xxxxxxx
Title: Assistant Vice President
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Commerzbank AG, New York and Grand Cayman
Branches
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Erste Bank der Oesterreichischen
Sparkassen AG
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: First Vice President
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Erste Bank
New York Branch
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Fleet National Bank
By: /s/ X. Xxxxxx
-------------------------------------
Name: X. Xxxxxx
Title: Director
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Xxxxxxxx Floating Rate Fund, LLC
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Mizuho Corporate Bank, Ltd.
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: National City Bank
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Account Officer
SIGNATURE PAGE TO
RING ACQUISITION CORP.
CREDIT AGREEMENT
Name of Institution: Xxxxx Fargo Bank N.A.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Vice President
SCHEDULE I TO THE
CREDIT AGREEMENT
Lenders, Addresses and Commitments
I. U.S. Lenders
-------------------------------------------------------------------------------------------------------
Change of Control Term Closing Date Term U.S. Revolving
Name of Lender Loan Commitment Loan Commitment Credit Commitment
-------------------------------------------------------------------------------------------------------
Allied Irish Banks, p.l.c. $0 $ 0 $ 5,000,000
000 Xxxx Xxxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Bank One, NA $0 $12,500,000 $12,500,000
1 Bank Xxx Xxxxx
Xxxxx XX0-0000
Xxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Bank of New York $0 $ 7,500,000 $12,500,000
U.S. Commercial Banking
Central Division
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Bank of Nova Scotia $0 $12,500,000 $ 7,500,000
Chicago Rep Xxxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Bank of Tokyo-Mitsubishi Trust Company $0 $12,500,000 $12,500,000
Transaction Business Group
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000-0000
-------------------------------------------------------------------------------------------------------
Commerzbank AG $0 $ 7,500,000 7,500,000
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Change of Control Term Closing Date Term U.S. Revolving
Name of Lender Loan Commitment Loan Commitment Credit Commitment
-------------------------------------------------------------------------------------------------------
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
-------------------------------------------------------------------------------------------------------
Credit Suisse First Boston $32,500,000 $377,000,000 $13,750,000
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Deutsche Bank $17,500,000 $ 5,000,000 $13,750,000
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Erste Bank Der Oesterreichischen $ 0 $ 5,000,000 $ 5,000,000
Sparkassen AG
000 Xxxx Xxxxxx Xxxx Xxxxxxxx
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Fleet National Bank $ 0 $ 12,500,000 $12,500,000
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Xxxxxxxx Floating Rate LLC $ 0 $ 5,000,000 $ 0
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Mizuho Corporate Bank, Ltd. $ 0 $ 7,500,000 $ 7,500,000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
-------------------------------------------------------------------------------------------------------
National City Bank $ 0 $ 7,500,000 $ 7,500,000
0000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
Xxxxx Fargo $ 0 $ 3,000,000 $12,500,000
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------
II. Canadian Lenders
---------------------------------------------------------------------
Canadian Revolving Credit
Name of Lender Commitment /1/
---------------------------------------------------------------------
Bank of Nova Scotia $5,000,000
Chicago Rep Xxxxxx
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
---------------------------------------------------------------------
Credit Suisse First Boston Toronto Branch $7,500,000
0 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
X.X. Xxx 000
Xxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0
---------------------------------------------------------------------
Deutsche Bank $7,500,000
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
---------------------------------------------------------------------
----------
/1/ Expressed in Dollars.
SCHEDULE II TO THE
CREDIT AGREEMENT
PRICING GRID
Applicable Margin Applicable Margin
for Eurodollar Revolving for ABR Revolving Credit Loans Commitment
Leverage Ratio Credit Loans and Swing Line Loans Fee Rate
------------------------------------ ------------------------ ------------------------------ ---------------------------
Category 1: Greater than 3.75 to 2.75% 1.75% 0.75%, subject to reduction
1.00 to 0.50% as provided below*
Category 2: Greater than 3.00 to 2.50% 1.50% 0.75%, subject to reduction
1.00, but less than or equal to 3.75 to 0.50% as provided below*
to 1.00
Category 3: Greater than 2.00 to 2.25% 1.25% 0.50%, subject to reduction
1.00, but less than or equal to 3.00 to 0.375% as provided
to 1.00 below*
Category 4: Less than or equal to 2.00% 1.00% 0.50%, subject to reduction
2.00 to 1.00 to 0.375% as provided
below*
* In respect of each day on which (x) the Aggregate U.S. Credit Exposure is
greater than 50% of the U.S. Revolving Credit Commitments or (y) the Aggregate
Canadian Credit Exposure is greater than 50% of the Canadian Revolving Credit
Commitments, the Commitment Fee Rate with respect to the Available U.S.
Revolving Credit Commitments or the Available Canadian Revolving Credit
Commitments, as applicable, shall be reduced to the applicable rate set forth
above.
