STOCK PURCHASE AGREEMENT
BY AND AMONG
MORTONBAY S.A.
AND
PIAMENT HOLDINGS S.A.,
AS SELLERS
AND
MAVERICK TUBE INTERNATIONAL HOLDINGS, INC.,
MAVERICK GP LLC,
AND
MAVERICK INVESTMENT LLC,
AS BUYERS
DATED AS OF MAY 20, 2005
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS.............................................................................................2
ARTICLE 2 SALE AND TRANSFER OF SHARES; CLOSING...................................................................11
Section 2.1 SHARES......................................................................................11
Section 2.2 PURCHASE PRICE..............................................................................11
Section 2.3 CLOSING.....................................................................................11
Section 2.4 CLOSING OBLIGATIONS.........................................................................11
Section 2.5 ADJUSTMENT AMOUNT...........................................................................13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS..............................................................14
Section 3.1 ORGANIZATION AND GOOD STANDING..............................................................14
Section 3.2 AUTHORITY; NO CONFLICT......................................................................14
Section 3.3 CAPITALIZATION..............................................................................16
Section 3.4 FINANCIAL STATEMENTS........................................................................17
Section 3.5 BOOKS AND RECORDS...........................................................................18
Section 3.6 TITLE TO PROPERTIES; ENCUMBRANCES...........................................................18
Section 3.7 CONDITION AND SUFFICIENCY OF ASSETS.........................................................19
Section 3.8 ACCOUNTS RECEIVABLE.........................................................................19
Section 3.9 INVENTORY...................................................................................19
Section 3.10 NO UNDISCLOSED LIABILITIES..................................................................20
Section 3.11 TAXES.......................................................................................20
Section 3.12 NO MATERIAL ADVERSE CHANGE..................................................................22
Section 3.13 EMPLOYEE BENEFITS...........................................................................22
Section 3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.............................24
Section 3.15 LEGAL PROCEEDINGS; ORDERS...................................................................25
Section 3.16 ABSENCE OF CERTAIN CHANGES AND EVENTS.......................................................26
Section 3.17 CONTRACTS; NO DEFAULTS......................................................................27
Section 3.18 INSURANCE...................................................................................30
Section 3.19 ENVIRONMENTAL MATTERS.......................................................................32
Section 3.20 EMPLOYEES...................................................................................33
Section 3.21 LABOR RELATIONS; COMPLIANCE.................................................................34
Section 3.22 INTELLECTUAL PROPERTY.......................................................................35
Section 3.23 CERTAIN PAYMENTS............................................................................35
Section 3.24 DISCLOSURE..................................................................................36
Section 3.25 CONTROLS AND PROCEDURES.....................................................................36
Section 3.26 RELATIONSHIPS WITH AFFILIATES...............................................................36
Section 3.27 BROKERS OR FINDERS..........................................................................37
Section 3.28 NO OTHER REPRESENTATIONS....................................................................37
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYERS...............................................................37
Section 4.1 ORGANIZATION AND GOOD STANDING..............................................................37
Section 4.2 AUTHORITY; NO CONFLICT......................................................................37
Section 4.3 INVESTMENT INTENT...........................................................................38
Section 4.4 CERTAIN PROCEEDINGS.........................................................................38
Section 4.5 BROKERS OR FINDERS..........................................................................38
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ARTICLE 5 COVENANTS OF SELLERS PRIOR TO CLOSING DATE.............................................................39
Section 5.1 ACCESS AND INVESTIGATION....................................................................39
Section 5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES.......................................39
Section 5.3 NEGATIVE COVENANT...........................................................................39
Section 5.4 COMPLIANCE WITH FCPA........................................................................40
Section 5.5 REQUIRED APPROVALS..........................................................................40
Section 5.6 NOTIFICATION................................................................................40
Section 5.7 PAYMENT OF INDEBTEDNESS BY AFFILIATES.......................................................41
Section 5.8 NO NEGOTIATION..............................................................................41
Section 5.9 RISK OF LOSS................................................................................41
Section 5.10 BEST EFFORTS................................................................................42
Section 5.11 TAX FORM 8832 AND DISREGARDED ENTITY TREATMENT..............................................42
ARTICLE 6 COVENANTS OF BUYERS PRIOR TO CLOSING DATE..............................................................42
Section 6.1 APPROVALS OF GOVERNMENTAL BODIES............................................................42
Section 6.2 BEST EFFORTS................................................................................43
Section 6.3 NOTIFICATION................................................................................43
Section 6.4 RELEASE OF GUARANTIES.......................................................................43
Section 6.5 CERTAIN ACCOUNTS RECEIVABLE.................................................................43
ARTICLE 7 CONDITIONS PRECEDENT TO BUYERS' OBLIGATION TO CLOSE....................................................44
Section 7.1 ACCURACY OF REPRESENTATIONS.................................................................44
Section 7.2 SELLERS' PERFORMANCE........................................................................45
Section 7.3 APPROVALS...................................................................................45
Section 7.4 ADDITIONAL DOCUMENTS........................................................................45
Section 7.5 NO PROCEEDINGS OR INJUNCTION................................................................46
Section 7.6 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS.........................................46
Section 7.7 NO PROHIBITION..............................................................................46
ARTICLE 8 CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE...................................................46
Section 8.1 ACCURACY OF REPRESENTATIONS.................................................................46
Section 8.2 BUYERS' PERFORMANCE.........................................................................47
Section 8.3 APPROVALS...................................................................................47
Section 8.4 ADDITIONAL DOCUMENTS........................................................................47
Section 8.5 NO INJUNCTION...............................................................................47
ARTICLE 9 TERMINATION AND RESCISSION.............................................................................48
Section 9.1 TERMINATION AND RESCISSION EVENTS...........................................................48
Section 9.2 EFFECT OF TERMINATION.......................................................................48
Section 9.3 TERMINATION FEES............................................................................49
ARTICLE 10 INDEMNIFICATION; REMEDIES.............................................................................50
Section 10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE................................50
Section 10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS...........................................50
Section 10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS--ENVIRONMENTAL MATTERS....................51
Section 10.4 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYERS............................................52
Section 10.5 TIME LIMITATIONS............................................................................52
Section 10.6 LIMITATIONS ON AMOUNT--SELLERS..............................................................53
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Section 10.7 LIMITATIONS ON AMOUNT--BUYER.................................................................54
Section 10.8 RIGHT OF SET-OFF.............................................................................55
Section 10.9 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS............................................55
Section 10.10 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS..................................................56
Section 10.11 DUTY TO MITIGATE DAMAGES.....................................................................56
ARTICLE 11 GENERAL PROVISIONS.....................................................................................57
Section 11.1 EXPENSES.....................................................................................57
Section 11.2 SALES AND TRANSFER TAXES.....................................................................57
Section 11.3 PUBLIC ANNOUNCEMENTS.........................................................................57
Section 11.4 CONFIDENTIALITY..............................................................................57
Section 11.5 NOTICES......................................................................................58
Section 11.6 ARBITRATION; JURISDICTION; SERVICE OF PROCESS................................................59
Section 11.7 FURTHER ASSURANCES...........................................................................60
Section 11.8 WAIVER.......................................................................................61
Section 11.9 ENTIRE AGREEMENT AND MODIFICATION............................................................61
Section 11.10 DISCLOSURE LETTER............................................................................61
Section 11.11 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS...........................................61
Section 11.12 SEVERABILITY.................................................................................62
Section 11.13 SECTION HEADINGS, CONSTRUCTION...............................................................62
Section 11.14 TIME OF ESSENCE..............................................................................62
Section 11.15 GOVERNING LAW................................................................................62
Section 11.16 COUNTERPARTS.................................................................................62
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STOCK PURCHASE AGREEMENT
This
Stock Purchase Agreement ("AGREEMENT") is made as of May 20, 2005,
by and among Maverick Tube International Holdings, Inc., a
Delaware corporation
("MAVERICK HOLDINGS"), Maverick GP LLC, a
Delaware limited liability company
("MAVERICK GP"), Maverick Investment LLC, a
Delaware limited liability company
("MAVERICK INVESTMENT," and collectively with Maverick Holdings and Maverick GP,
"BUYERS"), Mortonbay S.A., a Panama sociedad de responsibilidad limitada
("MORTONBAY"), and Piament Holdings S.A., a Panama sociedad de responsibilidad
limitada ("PIAMENT," and collectively with Mortonbay, the "SELLERS").
RECITALS
Sellers own 100% of the issued and outstanding member interests (the
"INTERNATIONAL GROWTH SHARES") of International Growth Partners Ltda., a Panama
sociedad de responsibilidad limitada ("INTERNATIONAL GROWTH").
Sellers own 100% of the issued and outstanding member interests (the
"SELECT GROWTH SHARES") of Select Growth Partners Ltda., a Panama sociedad de
responsibilidad limitada ("SELECT GROWTH").
Sellers own 100% of the issued and outstanding shares (the "ADVANCE
FLORIDA SHARES") of capital stock of Advance Corp., a Florida corporation d/b/a
Advance Tubular Corp. ("ADVANCE FLORIDA").
International Growth owns 100% of the issued and outstanding member
interests (the "GROWTH INVESTORS SHARES") of International Growth Investors
Ltd., a British Virgin Islands international business company ("GROWTH
INVESTORS").
Select Growth owns 100% of the issued and outstanding member interests
(the "SELECT COMMON SHARES") of Select Common Partners Ltd., a British Virgin
Islands international business company ("SELECT COMMON").
Growth Investors and Select Common collectively own: (i) 99.999997% of
the issued and outstanding shares (the "TUBOCARIBE SHARES") of capital stock of
Tubos del Caribe S.A., a Colombia sociedad anonima ("TUBOCARIBE"); (ii)
97.0171575% of the issued and outstanding shares (the "COLMENA SHARES") of
capital stock of Consorcio Metalurgico Nacional S.A., a Colombia sociedad
anonima ("COLMENA"); (iii) 100% of the issued and outstanding shares (the
"ADVANCE ECUADOR SHARES") of capital stock of Advance Tubular de Ecuador S.A.,
an Ecuador sociedad anonima ("ADVANCE ECUADOR"); (iv) 100% of the issued and
outstanding shares (the "ADVANCE VENEZUELA SHARES") of capital stock of Advance
Tubular de Venezuela, C.A., a Venezuela compania anonima ("ADVANCE VENEZUELA");
and (v) 100% of the issued and outstanding equity quotas (the "TUBULARES
SHARES") of equity of Tubulares de Colombia Ltda, a Colombia limitada
("TUBULARES").
Sellers desire to sell, and Buyers desire to purchase, all of the
International Growth Shares and Select Growth Shares, and indirectly as a result
of such sale and purchase and the direct and indirect holdings of International
Growth and Select Growth, all of the Growth
Investors Shares, Select Common Shares, Advance Florida Shares, TuboCaribe
Shares, Advance Ecuador Shares, Advance Venezuela Shares, Colmena Shares and
Tubulares Shares (collectively, the "SHARES") for the consideration and on the
terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article 1:
"ACQUIRED COMPANIES" means International Growth, Select Growth, Growth
Investors, Select Common, Advance Florida, TuboCaribe, Colmena, Advance Ecuador,
Advance Venezuela, Tubulares and their respective Subsidiaries, collectively.
"ADJUSTMENT AMOUNT" has the meaning set forth in Section 2.5.
"AFFILIATE" means, with respect to a specified Person, (i) any other
Person who directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such specified Person; (ii)
each other member of such Person's Family (in the case of an individual); (iii)
any Person in which such Person owns a Material Interest; and (iv) any Person
with respect to which such individual or one or more member(s) of such Person's
Family serves as a director, officer, partner, executor, general partner or
trustee (or other similar capacity).
"APPLICABLE CONTRACT" means any Contract (a) under which any Acquired
Company has or may acquire any rights, (b) under which any Acquired Company has
or may become subject to any obligation or liability, or (c) by which any
Acquired Company or any of the assets owned or used by it is or may become
bound.
"BALANCE SHEETS" has the meaning set forth in Section 3.4.
"BEST EFFORTS" means the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible; provided, however, that an obligation
to use Best Efforts under this Agreement does not require the Person subject to
that obligation to take actions that would result in a materially adverse change
in the benefits to such Person of this Agreement and the Contemplated
Transactions.
"BREACH" of a representation, warranty, covenant, obligation, or other
provision of this Agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation or other provision or (b) any
claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such
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representation, warranty, covenant, obligation, or other provision, and the term
"BREACH" means any such inaccuracy, breach, failure, claim, occurrence, or
circumstance.
"BS.$" means Venezuela Bolivares, the lawful currency of Venezuela.
"BUSINESS DAY" means any day of the week other than Saturday, Sunday or
a day that is a legal holiday in either Colombia or the State of New York on
which commercial banking institutions are obligated to close for business.
"BUYER PARTY" as used in Section 4.2(a) means any of Maverick Holdings,
Maverick GP, Maverick Investments and Maverick Tube.
"BUYERS" has the meaning set forth in the first paragraph of this
Agreement.
"BUYERS' CLOSING DOCUMENTS" means the Escrow Agreement, the Buyers'
Guaranty and the Promissory Notes.
"BUYERS' GUARANTY" has the meaning set forth in Section 2.4(b)(iii).
"CLOSING" has the meaning set forth in Section 2.3.
"CLOSING DATE" means the date and time as of which the Closing actually
takes place.
"COLOMBIA" means the Republic of Colombia.
"COL$" means the lawful currency of Colombia.
"COMPANY" means any of International Growth, Select Growth, Growth
Investors, Select Common, Advance Florida, TuboCaribe, Colmena, Advance Ecuador,
Advance Venezuela and Tubulares.
"COMPANY PLAN" has the meaning set forth in Section 3.13.
"CONSENT" means any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" means all of the transactions contemplated
by this Agreement, including:
(a) the sale of the Shares by Sellers to Buyers;
(b) the execution, delivery, and performance of the Promissory
Note, the Noncompetition Agreements, the Sellers' Release, the Sellers'
Guaranties, the Buyers' Guaranty, the Transition Services Agreement and
the Escrow Agreement;
(c) the performance by Buyers and Sellers of their respective
covenants and obligations under this Agreement; and
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(d) Buyers' acquisition and ownership of the Shares and
exercise of control over the Acquired Companies.
"CONTRACT" means any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"DAMAGES" has the meaning set forth in Section 10.2.
"DIAN" means the National Administrative Department of Taxes and
Customs of Colombia or any successor agency or Governmental Body.
"DISCLOSURE LETTER" means the disclosure letter delivered by Sellers to
Buyers concurrently with the execution and delivery of this Agreement.
"DOLLARS" and "$" mean the lawful currency of the United States of
America.
"EAIDA" means Empresa Administrativa e Industrial del Atlantico
Limitada, a Colombia limited liability partnership.
"ENCUMBRANCE" means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, right of first offer, preferential purchase right, or restriction
of any kind, including any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership.
"ENVIRONMENT" means soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" means any cost,
damages, expense, liability, obligation, or other responsibility arising from or
under applicable Environmental Law or applicable Occupational Safety and Health
Law and consisting of or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and
health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and expenses
arising under applicable Environmental Law or applicable Occupational
Safety and Health Law;
(c) financial responsibility under applicable Environmental
Law or applicable Occupational Safety and Health Law for cleanup costs
or corrective action, including any investigation, cleanup, removal,
containment, or other remediation or response actions ("CLEANUP")
required by applicable Environmental Law or applicable Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any
natural resource damages; or
4
(d) any other compliance, corrective, investigative, or
remedial measures required under applicable Environmental Law or
applicable Occupational Safety and Health Law.
The terms "REMOVAL," "REMEDIAL," and "RESPONSE ACTION," include the types of
activities covered by any applicable Legal Requirement.
"ENVIRONMENTAL LAW" means any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants or hazardous
substances or materials, violations of discharge limits, or other
prohibitions and of the commencements of activities, such as resource
extraction or construction, that could have significant impact on the
Environment;
(b) preventing or reducing to acceptable levels the Release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the Release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health
or the Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances;
(g) cleaning up pollutants that have been Released, preventing
the threat of release, or paying the costs of such clean up or
prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest to
recover for injuries done to public assets.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974
or any successor law, and regulations and rules issued pursuant to that Act or
any successor law.
"ESCROW AGREEMENT" has the meaning set forth in Section 2.4.
"FACILITIES" means any real property, leaseholds, or other interests
currently or formerly owned or operated by any Acquired Company and any
buildings, plants, structures, or equipment (including motor vehicles, tank
cars, and rolling stock) currently or formerly owned or operated by any Acquired
Company.
"FAMILY" of an individual includes (i) the individual, (ii) the
individual's spouse and former spouses, (iii) any other natural Person who is
related to the individual or the individual's
5
spouse within the fourth degree, and (iv) any other natural Person who resides
with such individual.
"FCPA" means the U.S. Foreign Corrupt Practices Act, together with all
rules and regulations promulgated thereunder.
"FUNDED INDEBTEDNESS" means all indebtedness for borrowed money.
"GAAP" means (a) in the case of Advance Florida, generally accepted
accounting principles, as in effect in the United States, (b) in the case of
TuboCaribe, Colmena and Tubulares, generally accepted accounting principles, as
in effect in Colombia, (c) in the case of Advance Ecuador, generally accepted
accounting principles, as in effect in Ecuador, and (d) in the case of Advance
Venezuela, generally accepted accounting principles, as in effect in Venezuela,
in each case applied on a basis consistent with the basis on which the Balance
Sheets and the other financial statements referred to in Section 3.4 were
prepared.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license,
permit, waiver, registration, filing, or other authorization issued, granted,
given, or otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" means any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, commission,
corporation, official, or entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature.
"HAZARDOUS ACTIVITY" means the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Acquired
Companies.
"HAZARDOUS MATERIALS" means any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any applicable Environmental Law, including any admixture or
solution thereof, and specifically including, if included pursuant to applicable
6
Environmental Law, petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
"HSR ACT" means the U.S. Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 or any successor law, and regulations and rules issued pursuant to that
Act or any successor law.
"INTELLECTUAL PROPERTY" means U.S. and non-U.S. intellectual property,
including patents, patent applications, inventions, and discoveries ("PATENTS");
processes, algorithms, formulae, technology, know-how and related improvements;
copyrights and copyrightable works (including software, code, applications,
databases, website content, documentation published and unpublished works, and
related items) ("COPYRIGHTS"); all rights in mask works, trademarks, service
marks, trade names, corporate names, domain names, trade names, logos, trade
dress, applications and other source indicators ("MARKS"); trade secrets,
customer lists, technical information, data, process technology, plans, drawings
and blue prints and confidential or proprietary information.
"INTERIM BALANCE SHEET" has the meaning set forth in Section 3.4.
"INTERNATIONAL SHARES" means collectively, the International Growth
Shares, the Select Growth Shares, the Growth Investors Shares, the Select Common
Shares, the TuboCaribe Shares, the Colmena Shares, the Advance Ecuador Shares,
the Advance Venezuela Shares, and the Tubulares Shares.
"IRC" means the U.S. Internal Revenue Code of 1986 or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"IRS" means the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"KNOWLEDGE"--an individual will be deemed to have "KNOWLEDGE" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the
existence of such fact or other matter.
A Person (other than an individual) will be deemed to have "KNOWLEDGE" of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, partner, or serves in any other similar
managerial capacity of such Person has, or at any time had, Knowledge of such
fact or other matter, and also includes all stockholders of such Person or its
ultimate parent entity.
"LEGAL REQUIREMENT" means any Order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty of any Governmental
Body.
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"MATERIAL ADVERSE EFFECT" means, with respect to the Acquired
Companies, any effect on such Person or its Affiliates that is, either
individually or in the aggregate, (a) materially adverse to the business,
operations, financial condition, properties or prospects of the Acquired
Companies, taken as a whole, other than any such effect attributable to or
resulting from (i) this Agreement or the Contemplated Transactions or the
announcement thereof, (ii) any change in general economic conditions or
prevailing interest rates in the country or region in which any of the Acquired
Companies operates, (iii) any change or condition generally affecting the
industry in which the Acquired Companies operate, (iv) any change in applicable
law or applicable GAAP or in the official interpretations thereof, (v) any
outbreak or substantial worsening or major hostilities in which the United
States or Colombia is involved or any act of terrorism within the United States
or Colombia or its properties or citizens or (vi) any act or omission by such
Person or any of its Affiliates taken with the prior written consent or at the
written direction of the other parties hereto or (b) materially adverse to the
ability of the Sellers to consummate the Contemplated Transactions or otherwise
perform their obligations hereunder.
"MATERIAL INTEREST" means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting
securities or other voting interests representing at least 5% of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least 5% of the outstanding equity securities or equity
interests in a Person.
"MAVERICK TUBE" means
Maverick Tube Corporation, a
Delaware
corporation.
"NONCOMPETITION AGREEMENT" has the meaning set forth in Section
2.4(a)(v).
"OCCUPATIONAL SAFETY AND HEALTH LAW" means any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private (including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working conditions.
"ORDER" means any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS"--an action taken by a Person will be
deemed to have been taken in the "ORDINARY COURSE OF BUSINESS" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(b) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons
exercising similar authority) and is not required to be specifically
authorized by the parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons
8
exercising similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of
business as such Person.
"ORGANIZATIONAL DOCUMENTS" means (a) the articles or certificate of
incorporation and the bylaws of a corporation, (b) the partnership agreement and
any statement of partnership of a general partnership, (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership, (d) any charter, bylaws, regulations or similar document adopted or
filed in connection with the creation, formation or organization of a Person,
(e) a certificate of existence and legal representation issued by a competent
Governmental Body with respect to a Person no more than 15 days prior to a
particular date in question, if applicable and (f) any amendment to any of the
foregoing.
"PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Governmental Body.
"PROCEEDING" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"PROMISSORY NOTE" has the meaning set forth in Section 2.4(b)(ii).
"RELATED PARTY INDEBTEDNESS" means any indebtedness between any
Acquired Company on the one hand and any Affiliate of any Acquired Company,
other than Advance Florida or any other Acquired Company, on the other hand.
"RELEASE" means any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional.
"REPRESENTATIVE" means with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"SECURITIES ACT" means the U.S. Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
"SELLER PARTY" as used in Section 3.2(a) means any of Mortonbay,
Piament, EAIDA, the Persons set forth in Section 2.4(a)(iv) of the Disclosure
Letter and the Persons set forth in Section 2.4(a)(v) of the Disclosure Letter.
"SELLERS" has the meaning set forth in the first paragraph of this
Agreement.
"SELLERS' CLOSING DOCUMENTS" means the Escrow Agreement, the Sellers'
Release, the Sellers' Guaranties, the Noncompetition Agreements and the
Transition Services Agreement.
"SELLERS' GUARANTIES" has the meaning set forth in Section 2.4(a)(iv).
"SELLERS' RELEASE" has the meaning set forth in Section 2.4(a)(iii).
9
"SHARES" has the meaning set forth in the Recitals of this Agreement.
"SUBSIDIARY" means with respect to any Person (the "OWNER"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its Subsidiaries;
when used without reference to a particular Person, "SUBSIDIARY" means a
Subsidiary of one or more of the Companies.
"TAX" means any income, gross receipts, license, payroll, employment,
excise, fuel (including fuel oil importation or distribution), severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value-added, alternative or add-on minimum, estimated or
other tax, assessment, fee, contribution or other governmental charge imposed by
any Governmental Body of any kind whatsoever, including any interest, penalty
and addition thereto, whether disputed or not.
"TAX RETURN" means any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.
"THREAT OF RELEASE" means a substantial likelihood of a Release that
may require action in order to prevent or mitigate damage to the Environment
that may result from such Release.
"THREATENED"--a claim, Proceeding, dispute, action, investigation, or
other matter will be deemed to have been "THREATENED" if any demand or statement
has been made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances exist,
that would lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
"TRANSITION SERVICES AGREEMENT" has the meaning set forth in Section
2.4(a)(iii).
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ARTICLE 2
SALE AND TRANSFER OF SHARES; CLOSING
SECTION 2.1 SHARES
Subject to the terms and conditions of this Agreement, at the Closing:
(a) Sellers will sell and transfer to Maverick Holdings the
International Shares, and Maverick Holdings will purchase the
International Shares from Sellers; and
(b) Sellers will sell and transfer to Maverick GP and Maverick
Investments, in the proportions set forth on Exhibit 2.1(b), the
Advance Florida Shares, and Maverick GP and Maverick Investments will
purchase the Advance Florida Shares from Sellers in such proportions.
SECTION 2.2 PURCHASE PRICE
The purchase price (the "PURCHASE PRICE") for the Shares will be
$186,000,000 less (a) the Adjustment Amount, (b) any reduction as determined
pursuant to Section 2.2 of the Disclosure Letter, and (c) all Related Party
Indebtedness satisfied by Buyers at Closing.
SECTION 2.3 CLOSING
The purchase and sale (the "CLOSING") provided for in this Agreement
will take place at in Panama City, Panama at a location mutually agreeable to
Buyers and Sellers, at 5:00 p.m. (local time) on the later of (i) May 27, 2005
and (ii) the date that is one Business Day following the termination of the
applicable waiting period under the HSR Act and the satisfaction or waiver of
all other conditions to Closing specified herein, or at such other time and
place as the parties may agree. Subject to the provisions of Article 9, failure
to consummate the purchase and sale provided for in this Agreement on the date
and time and at the place determined pursuant to this Section 2.3 will not
result in the termination of this Agreement and will not relieve any party of
any obligation under this Agreement.
SECTION 2.4 CLOSING OBLIGATIONS
At the Closing:
(a) Sellers will deliver to Buyers:
(i) originals of the certificates representing the
Shares, duly endorsed, when applicable, (or accompanied by
duly executed stock powers), with signatures guaranteed by a
commercial bank, notary or similar authority, for transfer to
Buyers, or such other documents as may be necessary to effect
the transfer of the Shares to Buyers in accordance with all
Legal Requirements of the applicable jurisdiction, in form and
substance reasonably satisfactory to Buyers;
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(ii) evidence that (A) Growth Investors and Select
Common are the duly registered owners of the TuboCaribe
Shares, Colmena Shares, Tubulares Shares, Advance Florida
Shares, Advance Venezuela Shares, Advance Ecuador Shares,
including, without limitation, detailed information as to the
specific number of shares of the capital stock of Colmena
constituting the Colmena Shares and the prior ownership
thereof satisfactory to Buyers in their sole discretion, and
(B) such ownership complies with all Legal Requirements,
including, without limitation, the reports of ownership
changes to DIAN and to Banco de la Republica de Colombia and
the payment of all related Taxes;
(iii) a release in the form of Exhibit 2.4(a)(iii)
executed by Sellers (the "SELLERS' RELEASE");
(iv) guaranty agreements in the form of Exhibit
2.4(a)(iv) executed by the Persons set forth in Section
2.4(a)(iv) of the Disclosure Letter (collectively, the
"SELLERS' GUARANTIES");
(v) noncompetition agreements in the form of Exhibit
2.4(a)(vi), executed by the Persons set forth in Section
2.4(a)(v) of the Disclosure Letter (collectively, the
"NONCOMPETITION AGREEMENTS");
(vi) a transition services agreement in the form of
Exhibit 2.4(a)(vi) executed by EAIDA (the "TRANSITION SERVICES
AGREEMENT"); and
(vii) a certificate executed by Sellers representing
and warranting to Buyers that each of Sellers' representations
and warranties in this Agreement was accurate as of the times
and to the extent required pursuant to Section 7.1.
(b) Buyers will deliver to Sellers:
(i) The net of $161,000,000 less (a) the Adjustment
Amount, (b) any reduction as determined pursuant to Section
2.2 of the Disclosure Letter, and (c) all Related Party
Indebtedness satisfied by Buyers at Closing, by bank cashier's
or certified check payable to the order of or by wire transfer
in immediately available funds to accounts specified by
Sellers in the proportions specified in Exhibit 2.4(b)(i);
(ii) a promissory note in the original principal
amount of $15,000,000 payable to Sellers or Sellers' designees
in the proportions specified in Exhibit 2.4(b)(i) which
promissory note shall be in the form of Exhibit 2.4(b)(ii)
(the "PROMISSORY NOTE");
(iii) a guaranty agreement in the form of Exhibit
2.4(b)(iii) executed by Maverick Tube (the "BUYERS'
GUARANTY");
(iv) the sum of $10,000,000 to the escrow agent
referred to in Section 2.4(c) by wire transfer in immediately
available funds;
12
(v) a certificate executed by Buyers to the effect
that, except as otherwise stated in such certificate, each of
Buyers' representations and warranties in this Agreement was
accurate as of the times and to the extent required pursuant
to Section 8.1; and
(vi) the Transition Services Agreement, executed by
one or more of the Acquired Companies as a direct or indirect
Subsidiary of Buyers.
(c) Buyers and Sellers will enter into an escrow agreement
with JPMorgan Chase Bank, or such other Person as is mutually agreeable
to Buyers and Sellers (XX Xxxxxx Xxxxx Bank or such other Person, the
"ESCROW AGENT"), in form and substance mutually agreeable to Buyers,
Sellers and the Escrow Agent (the "ESCROW AGREEMENT").
SECTION 2.5 ADJUSTMENT AMOUNT
(a) The Adjustment Amount will be equal to the aggregate
amount of Funded Indebtedness of the Acquired Companies as of the
Closing Date.
(b) For purposes of the Closing, Sellers shall notify Buyers
of Sellers' estimate of the aggregate amount of Funded Indebtedness of
the Acquired Companies that will be outstanding as of the Closing Date
not less than two Business Days prior to the anticipated Closing Date
(the "ESTIMATED CLOSING FUNDED INDEBTEDNESS"), which Estimated Closing
Funded Indebtedness shall be used in determining the delivery of the
cash portion of the Purchase Price to be delivered to Sellers at
Closing pursuant to Section 2.4(b)(i). Sellers and Buyers shall use
their Best Efforts to agree, within 45 days after the Closing, on the
actual amount of the Adjustment Amount. If Sellers and Buyers are able
to reach agreement as to the actual amount of the Adjustment Amount
within such 45-day period, Sellers and Buyers shall execute a
certificate evidencing their agreement as to the actual amount of the
Adjustment Amount. If Sellers and Buyers are unable to agree as to the
actual amount of the Adjustment Amount within such 45-day period, then
such matter shall be resolved pursuant to the dispute resolution
provisions in Section 11.6 of this Agreement. Within three Business
Days after the actual amount of the Adjustment Amount has been finally
determined (whether by agreement of Sellers and Buyers or through the
dispute resolution provisions in Section 11.6 of this Agreement), if
the actual amount of the Adjustment Amount is greater than the
Estimated Closing Funded Indebtedness, Sellers shall pay to Buyers, by
wire transfer of immediately available funds to an account designated
by Buyers, the amount by which the actual amount of the Adjustment
Amount exceeds the Estimated Closing Funded Indebtedness, and if the
actual amount of the Adjustment Amount is less than the Estimated
Closing Funded Indebtedness, Buyers shall pay to Sellers, by wire
transfer of immediately available funds to an account designated by
Sellers, the amount by which the Estimated Closing Funded Indebtedness
exceeds the actual amount of the Adjustment Amount.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers jointly and severally represent and warrant to Buyers subject
to such exceptions as are specifically disclosed in writing in the Disclosure
Letter, which shall be arranged in sections and subsections corresponding to the
numbered and lettered sections and subsections contained in this Article 3 with
the disclosures in any section or subsection of such schedule qualifying the
corresponding section or subsection in this Article 3, as well as any other
section or subsection of this Article 3 if specified therein, supplied by
Sellers to Buyers and dated as of the date hereof as follows:
SECTION 3.1 ORGANIZATION AND GOOD STANDING
(a) Section 3.1(a) of the Disclosure Letter contains a
complete and accurate list for each Acquired Company of its name, its
jurisdiction of organization, other jurisdictions in which it is
authorized to do business, and its capitalization (including the
identity of each stockholder and the number of shares held by each).
Each Acquired Company is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of organization, with full
power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to
own or use, and to perform all its obligations under Applicable
Contracts. Each Acquired Company is and at all times has been duly
qualified to do business and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
(b) Sellers have delivered to Buyers copies of the
Organizational Documents of each Acquired Company, as currently in
effect.
SECTION 3.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of each Seller, enforceable against each Seller in
accordance with its terms. Upon the execution and delivery by each
Seller Party of each of the Sellers' Closing Documents to which such
Seller Party is a party, such Sellers' Closing Document will constitute
the legal, valid, and binding obligation of each Seller Party who is a
party thereto, enforceable against each such Seller Party in accordance
with its terms. Each Seller has the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement
and to perform its obligations under this Agreement, and each Seller
Party has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver each of the Sellers' Closing Documents
to which such Seller Party is a party and to perform such Seller
Party's obligations under each of the Sellers' Closing Documents to
which such Seller Party is a party.
(b) Except as set forth in Section 3.2(b) of the Disclosure
Letter, neither the execution and delivery of this Agreement nor the
consummation or performance of any
14
of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents
of the Acquired Companies, or (B) any resolution adopted by
the board of directors (or similar governing body) or the
stockholders of any Acquired Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person
the right to challenge any of the Contemplated Transactions or
to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which any Acquired Company or
Sellers, or any of the assets owned or used by any Acquired
Company, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governmental Authorization
that is held by any Acquired Company or that otherwise relates
to the business of, or any of the assets owned or used by, any
Acquired Company;
(iv) cause Buyers or any Acquired Company to become
subject to, or to become liable for the payment of, any Tax;
(v) cause any of the assets owned by any Acquired
Company to be reassessed or revalued by any taxing authority
or other Governmental Body;
(vi) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person
the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; or
(vii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or
used by any Acquired Company.
Except as set forth in Section 3.2(b) of the Disclosure Letter, neither
of the Sellers nor any Acquired Company is or will be required to give
any notice to or obtain any Consent from any Person in connection with
the execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
(c) Sellers and Sellers' designees are acquiring the
Promissory Note for their own account and not with a view to their
distribution within the meaning of Section 2(11) of the Securities Act.
Sellers and each of Sellers' designees are "accredited investors" as
such term is defined in Rule 501(a) under the Securities Act.
15
SECTION 3.3 CAPITALIZATION
(a) The authorized equity securities of International Growth
consist of 100 shares of common stock, par value $100.00 per share, of
which 100 shares are issued and outstanding and constitute the
International Growth Shares.
(b) The authorized equity securities of Select Growth consist
of 100 shares of common stock, par value $100.00 per share, of which
100 shares are issued and outstanding and constitute the Select Growth
Shares.
(c) The authorized capital stock of Advance Florida consists
of 10,000,000 shares of common stock, no par value per share, of which
1,700,000 shares are issued and outstanding and constitute the Advance
Florida Shares.
(d) The authorized equity securities of Growth Investors
consist of 50,000 shares of common stock, par value $1.00 per share, of
which 50,000 shares are issued and outstanding and constitute the
Growth Investors Shares.
(e) The authorized equity securities of Select Common consist
of 50,000 shares of common stock, par value $1.00 per share, of which
50,000 shares are issued and outstanding and constitute the Select
Common Shares.
(f) The authorized equity securities of TuboCaribe consist of
101,500,000 shares of common stock, par value Col$1,000 per share, of
which 101,423,769 shares are issued, outstanding and fully paid, and
101,423,766 of which constitute the TuboCaribe Shares.
(g) The authorized equity securities of Colmena consist of
882,000,000 shares of common stock, par value Col$10 per share, of
which 881,732,313 shares are issued outstanding and fully paid, and
855,431,627 of which constitute the Colmena Shares.
(h) The authorized equity securities of Advance Ecuador
consist of 5,000 shares of common stock, par value $1.00 per share, of
which 5,000 shares are issued and outstanding and constitute the
Advance Ecuador Shares.
(i) The authorized equity securities of Advance Venezuela
consist of 1,000 shares of common stock, par value Bs.$10,000 per
share, of which 1,000 shares are issued and outstanding and constitute
the Advance Venezuela Shares.
(j) The authorized equity securities of Tubulares consist of
10,000 equity quotas, par value Col$1,000 per equity quota, of which
10,000 equity quotas are issued and outstanding and constitute the
Tubulares Shares.
(k) Sellers are and will be on the Closing Date, directly or
indirectly, the record and beneficial owners and holders of the Shares,
free and clear of all Encumbrances. Sellers collectively own all of the
International Growth Shares, Select Growth Shares and Advance Florida
Shares, International Growth and Select Growth collectively own all of
the Growth Investors Shares and Select Common Shares, and
16
Growth Investors and Select Common collectively own all of the
TuboCaribe Shares, Colmena Shares, Advance Ecuador Shares, Advance
Venezuela Shares and Tubulares Shares. Except for the Shares and except
as set forth in Section 3.3(k) of the Disclosure Letter, all of the
outstanding equity securities and other securities of each Acquired
Company are owned of record and beneficially by one or more of the
Acquired Companies, free and clear of all Encumbrances. No legend or
other reference to any purported Encumbrance appears upon any
certificate representing equity securities of any Acquired Company or
in any of the stockholder books of any of the Acquired Companies. All
of the outstanding equity securities of each Acquired Company have been
duly authorized and validly issued and are fully paid and
nonassessable. There are no Contracts relating to the issuance, sale,
or transfer of any equity securities or other securities of any
Acquired Company. None of the outstanding equity securities or other
securities of any Acquired Company was issued in violation of the
Securities Act or any other Legal Requirement. No Acquired Company
owns, or has any Contract to acquire, any equity securities or other
securities of any Person (other than Acquired Companies) or any direct
or indirect equity or ownership interest in any other business. Upon
the consummation of the Contemplated Transactions, Buyers will acquire,
directly or indirectly, good and marketable title to the Shares, free
and clear of all Encumbrances.
SECTION 3.4 FINANCIAL STATEMENTS
Sellers have delivered to Buyers: (a) audited balance sheets of the
Acquired Companies as at December 31 in each of the years 2002 through 2004
(collectively, the "BALANCE SHEETS"), and the related audited statements of
income, changes in stockholders' equity, cash flow, profit and loss audited
statements, and reports of changes in the financial situation for each of the
fiscal years then ended, together with the report thereon of Xxxxxx Xxxxxx,
qualified statutory auditor, (b) an unaudited balance sheet of the Acquired
Companies as of March 31, 2005 (including the notes thereto, the "INTERIM
BALANCE SHEET"), and the related statements of income, changes in stockholders'
equity, cash flow, and reports of changes in the financial situation for the
period then ended, and (c) an unaudited consolidated balance sheets of the
Acquired Companies as at December 31, 2003, December 31, 2004 and March 31, 2005
(collectively, the "CONSOLIDATED BALANCE SHEETS") and the related unaudited
consolidated statements of income, changes in stockholders' equity, cash flow
and reports of changes in the financial situation for the periods then ended.
Such financial statements fairly present the financial condition and the results
of operations, changes in stockholders' equity, and cash flow of the Acquired
Companies as at the respective dates of and for the periods referred to in such
financial statements, materially all in accordance with GAAP, subject, in the
case of interim financial statements, to normal recurring year-end adjustments
(the effect of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes (that, if presented, would not differ
materially from those included in the Balance Sheets). The financial statements
referred to in this Section 3.4 reflect the consistent application of such
accounting principles throughout the periods involved. No financial statements
of any Person other than the Acquired Companies are required by GAAP to be
included in the consolidated financial statements of the Companies.
17
SECTION 3.5 BOOKS AND RECORDS
The books of account, minute books, stock record books, and other
records of the Acquired Companies, all of which have been provided to Buyers,
are complete and correct, duly signed, and have been maintained in accordance
with sound business practices and the requirements of Section 13(b)(2) of the
Securities Exchange Act of 1934, as amended (regardless of whether or not the
Acquired Companies are subject to that Section), including the maintenance of an
adequate system of internal controls. The minute books of the Acquired Companies
contain accurate and complete records of all meetings held of, and action taken
by, the stockholders, the boards of directors (or similar governing bodies), and
committees of the boards of directors (or similar governing bodies) of the
Acquired Companies, and no meeting of any such stockholders, board of directors
(or similar governing bodies), or committee has been held for which minutes have
not been prepared and are not contained in such minute books. At the Closing,
all of those books and records will be duly signed and in the possession of the
Acquired Companies.
SECTION 3.6 TITLE TO PROPERTIES; ENCUMBRANCES
Section 3.6 of the Disclosure Letter contains a complete and accurate
list of all real property, leaseholds, or other interests therein owned or used
by any Acquired Company. Sellers have delivered to Buyers copies of the deeds
and other instruments (as recorded) by which the Acquired Companies acquired
such real property and interests, and copies of all title insurance policies,
opinions, abstracts, and surveys in the possession of Sellers or the Acquired
Companies and relating to such property or interests. The Acquired Companies own
(with good and marketable title in the case of real property) all the properties
and assets (whether real, personal, or mixed and whether tangible or intangible)
that they purport to own located in the facilities owned or operated by the
Acquired Companies or reflected as owned in the books and records of the
Acquired Companies, including all of the properties and assets reflected in the
Balance Sheets and the Interim Balance Sheet (except for assets held under
capitalized leases disclosed or not required to be disclosed in Section 3.6 of
the Disclosure Letter and personal property sold since the date of the Balance
Sheets and the Interim Balance Sheet, as the case may be, in the Ordinary Course
of Business), and all of the properties and assets purchased or otherwise
acquired by the Acquired Companies since the date of the Balance Sheets (except
for personal property acquired and sold since the date of the Balance Sheets in
the Ordinary Course of Business and consistent with past practice), which
subsequently purchased or acquired properties and assets (other than inventory
and short-term investments) are listed in Section 3.6 of the Disclosure Letter.
All material properties and assets reflected in the Balance Sheets and the
Interim Balance Sheet are free and clear of all Encumbrances and are not, in the
case of real property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations, usufruct, rights of use or limitations of
any nature except, with respect to all such properties and assets, (a) mortgages
or security interests shown on the Balance Sheets or the Interim Balance Sheet
as securing specified liabilities or obligations, with respect to which no
default (or event that, with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred in connection with
the purchase of property or assets after the date of the Interim Balance Sheet
(such mortgages and security interests being limited to the property or assets
so acquired), with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (c) liens for current
Taxes not yet due,
18
and (d) with respect to real property, (i) minor imperfections of title, if any,
none of which is substantial in amount, materially detracts from the value or
impairs the use of the property subject thereto, or impairs the operations of
any Acquired Company, and (ii) zoning laws and other recorded land use
restrictions that do not impair the present or anticipated use of the property
subject thereto. All buildings, plants, and structures owned by the Acquired
Companies lie wholly within the boundaries of the real property owned by the
Acquired Companies and do not encroach upon the property of, or otherwise
conflict with the property rights of, any other Person.
SECTION 3.7 CONDITION AND SUFFICIENCY OF ASSETS
The buildings, plants, structures, and equipment of the Acquired
Companies are structurally sound, are in good operating condition and repair,
and are adequate for the uses to which they are being put, and, to the best
Knowledge of Sellers and the Acquired Companies, none of such buildings, plants,
structures, or equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost. The building, plants, structures, and equipment of the Acquired Companies
are sufficient for the continued conduct of the Acquired Companies' businesses
after the Closing in substantially the same manner as conducted prior to the
Closing.
SECTION 3.8 ACCOUNTS RECEIVABLE
All accounts receivable of the Acquired Companies that are reflected on
the Balance Sheets or the Interim Balance Sheet or on the accounting records of
the Acquired Companies as of the Closing Date (collectively, the "ACCOUNTS
RECEIVABLE") represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course of Business.
Unless paid prior to the Closing Date, the Accounts Receivable are or will be as
of the Closing Date current and collectible net of the respective reserves shown
on the Balance Sheets or the Interim Balance Sheet or on the accounting records
of the Acquired Companies as of the Closing Date (which reserves are adequate
and calculated consistent with past practice and, in the case of the reserve as
of the Closing Date, will not represent a greater percentage of the Accounts
Receivable as of the Closing Date than the reserve reflected in the Interim
Balance Sheet represented of the Accounts Receivable reflected therein and will
not represent a material adverse change in the composition of such Accounts
Receivable in terms of aging). Subject to such reserves, each of the Accounts
Receivable either has been or will be collected in full, without any set-off,
within ninety days after the day on which it first becomes due and payable.
There is no contest, claim, or right of set-off, other than returns in the
Ordinary Course of Business, under any Contract with any obligor of an Accounts
Receivable relating to the amount or validity of such Accounts Receivable.
Section 3.8 of the Disclosure Letter contains a complete and accurate list of
all Accounts Receivable as of the date of the Interim Balance Sheet, which list
sets forth the aging of such Accounts Receivable.
SECTION 3.9 INVENTORY
Except as set forth in Section 3.9 of the Disclosure Letter, all
inventory of the Acquired Companies, whether or not reflected in the Balance
Sheets or the Interim Balance Sheet, consists of a quality and quantity usable
and salable in the Ordinary Course of Business, except for
19
obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Balance Sheets or the
Interim Balance Sheet or on the accounting records of the Acquired Companies as
of the Closing Date, as the case may be. Except as set forth in Section 3.9 of
the Disclosure Letter, all inventories of Advance Florida not written off have
been priced at the lower of cost or market value on a first in, first out basis.
Except as set forth in Section 3.9 of the Disclosure Letter, all inventories of
each Acquired Company other than Advance Florida that have not been written off
have been priced at average cost, and since January 1, 2003, such average cost
calculation has been subject to inflation adjustments. The quantities of each
item of inventory (whether raw materials, work-in-process, or finished goods)
are not excessive, but are reasonable in the present circumstances of the
Acquired Companies.
SECTION 3.10 NO UNDISCLOSED LIABILITIES
Except as set forth in Section 3.10 of the Disclosure Letter, the
Acquired Companies have no liabilities or obligations of any nature (whether
known or unknown and whether absolute, accrued, contingent, or otherwise) except
for liabilities or obligations reflected or reserved against in the Balance
Sheets or the Interim Balance Sheet and current liabilities incurred in the
Ordinary Course of Business since the respective dates thereof.
SECTION 3.11 TAXES
(a) The Acquired Companies have filed or caused to be filed
(on a timely basis since January 1, 1998) all Tax Returns that are or
were required to be filed by or with respect to any of them or any of
the Facilities, either separately or as a member of a group of
corporations, pursuant to applicable Legal Requirements. Sellers have
delivered to Buyers copies of, and Section 3.11(a) of the Disclosure
Letter contains a complete and accurate list of, all such Tax Returns
filed since January 1, 1998. The Acquired Companies have paid, or made
provision for the payment of, all Taxes that have or may have become
due pursuant to those Tax Returns or otherwise, or pursuant to any
assessment received by either Seller or any Acquired Company, except
such Taxes, if any, as are listed in Section 3.11(a) of the Disclosure
Letter and are being contested in good faith and as to which adequate
reserves (determined in accordance with GAAP) have been provided in the
Balance Sheets and the Interim Balance Sheet.
(b) The United States, Colombian, Venezuelan and Ecuadorian
national, federal, department, state, municipal and local income and
value added Tax Returns of each Acquired Company and Facilities subject
to such Taxes have been audited by the IRS, DIAN, similar Venezuelan or
Ecuadorian Tax authority or relevant state, department, municipal or
local Tax authorities or are closed by the applicable statute of
limitations for all taxable years through 1998. Sellers have delivered
to Buyers complete and accurate copies of all audits of all such Tax
Returns, including a reasonably detailed description of the nature and
status (or, if finally resolved, outcome) of each audit or inquiry. All
deficiencies proposed as a result of such audits have been paid,
reserved against, settled, or, as described in Section 3.11(b) of the
Disclosure Letter, are being contested in good faith by appropriate
proceedings. Section 3.11(b) of the Disclosure Letter describes all
adjustments to the income and value added Tax Returns filed by any
20
Acquired Company or any group of entities including any Acquired
Company for all taxable years since January 1, 1998 and the resulting
deficiencies proposed by the IRS, DIAN, similar Venezuelan or
Ecuadorian Tax authority or other competent Governmental Body. Except
as described in Section 3.11(b) of the Disclosure Letter, neither
Sellers nor any Acquired Company has given or been requested to give
waivers or extensions (or is or would be subject to a waiver or
extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of any Acquired Company or for which
any Acquired Company may be liable.
(c) The charges, accruals, and reserves with respect to Taxes
on the respective books of each Acquired Company are adequate
determined in accordance with GAAP and are at least equal to that
Acquired Company's liability for Taxes. There exists no proposed Tax
assessment against any Acquired Company except as disclosed in the
Balance Sheets or in Section 3.11(c) of the Disclosure Letter. No
consent to the application of Section 341(f)(2) of the IRC has been
filed with respect to any property or assets held, acquired, or to be
acquired by any Acquired Company. All Taxes that any Acquired Company
is or was required by Legal Requirements to withhold or collect have
been duly withheld or collected and, to the extent required, have been
paid to the proper Governmental Body or other Person. All Tax Returns
filed by (or that include on a consolidated basis) any Acquired Company
are true, correct and complete. There is no Tax sharing agreement that
will require any payment by any Acquired Company after the date of this
Agreement. Advance Florida is not and has not been an S corporation.
During the consistency period no Acquired Company or target affiliate
has sold or will sell any property or assets to Buyer or to any member
of the affiliated group that includes Buyer, all terms as defined under
the IRC. Section 3.11(d) of the Disclosure Letter lists all such target
affiliates.
(d) Sellers have caused, or as of the Closing will have
caused, an IRS Form 8832 to be properly executed and properly filed
with respect to each of International Growth, Select Growth, Growth
Investors and Select Common, and each such IRS Form 8832 shall properly
elect for each of International Growth, Select Growth, Growth Investors
and Select Common to be classified as a disregarded entity for U.S.
federal income tax purposes. Each of International Growth, Select
Growth, Growth Investors and Select Common have been formed as and
shall remain at all times an eligible entity for which an election to
be classified as a disregarded entity for U.S. federal income tax
purposes can properly be made under U.S. Treasury Regulations section
301.7701 until such election is effective.
(e) Neither (i) the formation of Sellers, International
Growth, Select Growth, Growth Investors or Select Common, nor (ii) the
issuance, transfer, or contribution of the Shares or any equity
interest in either of the Sellers, nor (iii) any action taken prior to
the Closing with respect to the pre-Closing reorganization of the
Acquired Companies, will result in the imposition of any Tax or
Encumbrance on any of the Buyers or the Acquired Companies or any of
their respective assets or properties.
21
SECTION 3.12 NO MATERIAL ADVERSE CHANGE
Since the date of the Balance Sheets, (i) there has not been any change
in the business, operations, credit, payment, collection or inventory practices
or policies, properties, prospects, assets, or condition of any Acquired
Company, and (ii) no event has occurred or circumstance exists, in the case of
clause (i) or (ii), individually or in the aggregate, has had or is reasonably
expected to have a Material Adverse Effect.
SECTION 3.13 EMPLOYEE BENEFITS
(a) As used in this Section 3.13, the following terms have the
meanings set forth below.
"COLOMBIAN/VENEZUELAN CONTRIBUTIONS" mean contributions to
mandatory or voluntary pension plans and funds, severance ("cesantias")
funds, mandatory work accident insurance and health coverage and other
payroll parafiscal contributions to "Cajas de Compensacion," "Instituto
Colombiano de Bienestar Familiar" -ICBF- and to "Servicio Nacional de
Aprendizaje" -SENA or any such contributions to any comparable
Venezuelan institutions or authorities.
"COMPANY OTHER BENEFIT OBLIGATION" means an Other Benefit
Obligation owed, adopted, or followed by an Acquired Company or an
ERISA Affiliate of an Acquired Company.
"COMPANY PLAN" means any employee benefit plan, arrangement or
payroll practice, either mandatory or voluntary, including, without
limitation, any bonus plan, consulting, employment or other
compensation agreement, incentive, stock option or other equity or
equity-based compensation, or deferred compensation arrangement, stock
purchase, severance pay, sick leave, vacation pay, salary continuation
for disability, hospitalization, medical insurance, life insurance,
scholarship program or similar plan.
"ERISA AFFILIATE" means any entity which, together with the
subject Person, would be treated as a single employer under Section 414
of the IRC or Section 4001 of ERISA and any general partnership of
which any such entity is or has been a general partner.
"MANDATORY BENEFITS" means the benefits required by Colombian
or Venezuelan Legal Requirements or by collective bargaining agreements
in Colombia or Venezuela.
"OTHER BENEFIT OBLIGATIONS" means all obligations,
arrangements, or customary practices, whether or not legally
enforceable, to provide benefits, other than salary, as compensation
for services rendered, to present or former directors, employees, or
agents, other than obligations, arrangements, and practices that are
Company Plans. Other Benefit Obligations include consulting agreements
under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and
fringe benefits within the meaning of IRC Section 132.
22
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
(b) Except as set forth on Schedule 3.13, none of the Acquired
Companies has maintained, sponsored, contributed to, or had any
liability under any Company Plan. Section 3.13 of the Disclosure Letter
sets forth the name and general description of each of such Company
Plans, and Sellers have provided to Buyer true, complete and correct
copies of such Company Plans documents and any material related
documents. Each Company Plan maintained, sponsored or contributed to by
any of the Acquired Companies has been maintained and operated in
compliance with all applicable Legal Requirements, including ERISA, and
with the terms of such plan.
(c) None of the Acquired Companies have any ERISA Affiliates.
(d) All contributions required to have been made under any of
such Company Plans or by applicable law to any funds or trusts
established thereunder or in connection therewith have been made by the
due date thereof, and all contributions for any period ending on or
before the Closing which are not yet due will be paid by the required
due date. Each Acquired Company and each ERISA Affiliate of an Acquired
Company has met the minimum funding standard, has paid all amounts due
under all Colombian/Venezuelan Contributions and Mandatory Benefits,
and has made all contributions required under applicable Legal
Requirements.
(e) The Acquired Companies, with respect to all
Colombian/Venezuelan Contributions, Company Plans, Company Other
Benefits Obligations, and Mandatory Benefits are, and each
Colombian/Venezuelan Contribution, Company Plan, Company Other Benefit
Obligation, and Mandatory Benefit is, in full compliance in all
material respects with all applicable Legal Requirements, including the
provisions of such Legal Requirements expressly mentioned in this
Section 3.13, and with any applicable collective bargaining agreement.
(f) Sellers have previously provided copies to Buyers of all
notices that were given by the IRS, the PBGC, the U.S. Department of
Labor, the Colombian Ministry of Social Security or any comparable
Venezuelan institution or Governmental Body, as the case may be, to any
Acquired Company or any ERISA Affiliate of an Acquired Company within
the five years preceding the date of this Agreement.
(g) All filings required by Colombian or Venezuelan Legal
Requirements as to each Colombian/Venezuelan Contribution, Mandatory
Benefit and Company Plan have been timely filed, and all notices and
disclosures to participants required by applicable Legal Requirements
have been timely provided.
(h) No event has occurred or circumstance exists that may
constitute grounds under applicable Legal Requirements for the
termination of, or the appointment of a trustee to administer, any
Company Plan. The Acquired Companies do not have any formal plan or
commitment, whether legally binding or not, to create any additional
Company Plan or modify or change any existing Company Plan in a manner
that would
23
impose liability on Buyers or any Affiliate of Buyers, nor has any
intention to do so been communicated to any of its employees or their
dependents, survivors or beneficiaries.
(i) No accumulated funding deficiency, whether or not waived,
exists with respect to any Colombian/Venezuelan Contributions, Company
Plan, or Mandatory Benefit; and no event has occurred or circumstance
exists that may result in an accumulated funding deficiency as of the
last day of the current plan year of any such Colombian/Venezuelan
Contribution, Company Plan, or Mandatory Benefit.
(j) The consummation of the Contemplated Transactions will not
result in the payment, vesting, or acceleration of any benefit.
SECTION 3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
(a) Except as set forth in Section 3.14(a) of the Disclosure
Letter:
(i) each Acquired Company is, and at all times has
been, in full compliance with each Legal Requirement,
including, without limitation, Colombian, Venezuelan, and
Ecuadorian foreign investment regulations, that is or was
applicable to it or to the conduct or operation of its
business or the ownership or use of any of its assets;
(ii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) (A) may
constitute or result in a violation by any Acquired Company
of, or a failure on the part of any Acquired Company to comply
with, any Legal Requirement, including, without limitation,
any Colombian, Venezuelan or Ecuadorian foreign investment
regulation, or (B) may give rise to any obligation on the part
of any Acquired Company to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature; and
(iii) no Acquired Company has received, at any time
since January 1, 2000 any notice or other communication
(whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible, or
potential obligation on the part of any Acquired Company to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature.
(b) Section 3.14(b) of the Disclosure Letter contains a
complete and accurate list of each Governmental Authorization that is
held by any Acquired Company or that otherwise relates to the business
of, or to any of the assets owned or used by, any Acquired Company.
Each Governmental Authorization listed or required to be listed in
Section 3.14(b) of the Disclosure Letter is valid and in full force and
effect. Except as set forth in Section 3.14(b) of the Disclosure
Letter:
(i) each Acquired Company is, and at all times since
January 1, 2000, has been, in full compliance with all of the
terms and requirements of each
24
Governmental Authorization identified or required to be
identified in Section 3.14(b) of the Disclosure Letter;
(ii) no event has occurred or circumstance exists
that may (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a violation of
or a failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed in
Section 3.14(b) of the Disclosure Letter, or (B) result
directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or
required to be listed in Section 3.14(b) of the Disclosure
Letter;
(iii) no Acquired Company has received, at any time
since January 1, 2000 any notice or other communication
(whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of, or
modification to any Governmental Authorization; and
(iv) all applications required to have been filed for
the renewal of the Governmental Authorizations listed or
required to be listed in Section 3.14(b) of the Disclosure
Letter have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings
required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the
appropriate Governmental Bodies.
The Governmental Authorizations listed in Section 3.14(b) of the
Disclosure Letter collectively constitute all of the Governmental
Authorizations necessary to permit the Acquired Companies to lawfully
conduct and operate their businesses in the manner they currently
conduct and operate such businesses and to permit the Acquired
Companies to own and use their assets in the manner in which they
currently own and use such assets.
SECTION 3.15 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth in Section 3.15(a) of the Disclosure
Letter, there is no pending Proceeding:
(i) that has been commenced by or against any
Acquired Company or that otherwise relates to or may affect
the business of, or any of the assets owned or used by, any
Acquired Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions.
To the Knowledge of Sellers and the Acquired Companies, (A) no such
Proceeding has been Threatened, and (B) no event has occurred or
circumstance exists that may give rise
25
to or serve as a basis for the commencement of any such Proceeding.
Sellers have delivered to Buyers copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed
in Section 3.15(a) of the Disclosure Letter. The Proceedings listed in
Section 3.15(a) of the Disclosure Letter will not have a material
adverse effect on the business, operations, assets, condition, or
prospects of any Acquired Company.
(b) Except as set forth in Section 3.15(b) of the Disclosure
Letter:
(i) there is no Order to which any of the Acquired
Companies, or any of the assets owned or used by any Acquired
Company, is subject;
(ii) Neither Seller is subject to any Order that
relates to the business of, or any of the assets owned or used
by, any Acquired Company; and
(iii) to the Knowledge of Sellers and the Acquired
Companies, no officer, director, agent, or employee of any
Acquired Company is subject to any Order that prohibits such
officer, director, agent, or employee from engaging in or
continuing any conduct, activity, or practice relating to the
business of any Acquired Company.
(c) Except as set forth in Section 3.15(c) of the Disclosure
Letter:
(i) each Acquired Company is, and at all times since
May 1, 1994 has been, in full compliance with all of the terms
and requirements of each Order to which it, or any of the
assets owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists
that may constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any
term or requirement of any Order to which any Acquired
Company, or any of the assets owned or used by any Acquired
Company, is subject; and
(iii) no Acquired Company has received, at any time
since May 1, 1994, any notice or other communication (whether
oral or written) from any Governmental Body or any other
Person regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any term or
requirement of any Order to which any Acquired Company, or any
of the assets owned or used by any Acquired Company, is or has
been subject.
SECTION 3.16 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Section 3.16 of the Disclosure Letter, since the
date of the Balance Sheets, the Acquired Companies have conducted their
businesses only in the Ordinary Course of Business and there has not been any:
(a) change in any Acquired Company's authorized or issued
capital stock; grant of any stock option or right to purchase shares of
capital stock of any Acquired Company; issuance of any security
convertible into such capital stock; grant of any
26
registration rights; purchase, redemption, retirement, or other
acquisition by any Acquired Company of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution
or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of any Acquired
Company;
(c) payment or increase by any Acquired Company of any
bonuses, salaries, or other compensation to any stockholder, director,
officer, or (except in the Ordinary Course of Business) employee or
entry into any employment, severance, or similar Contract with any
director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or
with any employees of any Acquired Company;
(e) damage to or destruction or loss of any asset or property
of any Acquired Company, whether or not covered by insurance,
materially and adversely affecting the properties, assets, business,
financial condition, or prospects of the Acquired Companies, taken as a
whole;
(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or (ii)
any Contract or transaction involving a total remaining commitment by
or to any Acquired Company of at least $100,000;
(g) sale (other than sales of inventory in the Ordinary Course
of Business), lease, or other disposition of any asset or property of
any Acquired Company or mortgage, pledge, or imposition of any lien or
other encumbrance on any material asset or property of any Acquired
Company, including the sale, lease, or other disposition of any of the
Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a
value to any Acquired Company in excess of $100,000;
(i) material change in the accounting methods, credit or
payment practices or polices used by any Acquired Company; or
(j) agreement, whether oral or written, by any Acquired
Company to do any of the foregoing.
SECTION 3.17 CONTRACTS; NO DEFAULTS
(a) Section 3.17(a) of the Disclosure Letter contains a
complete and accurate list, and except as set forth in the second
paragraph of Section 3.17(a) of the Disclosure Letter, Sellers have
delivered to Buyers true and complete copies, of:
27
(i) each Applicable Contract that involves
performance of services or delivery of goods or materials by
one or more Acquired Companies of an amount or value in excess
of $100,000;
(ii) each Applicable Contract that involves
performance of services or delivery of goods or materials to
one or more Acquired Companies of an amount or value in excess
of $100,000;
(iii) each Applicable Contract that was not entered
into in the Ordinary Course of Business and that involves
expenditures or receipts of one or more Acquired Companies in
excess of $100,000;
(iv) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
Applicable Contract affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any
real or personal property (except personal property leases and
installment and conditional sales agreements having a value
per item or aggregate payments of less than $100,000 and with
terms of less than one year);
(v) each licensing agreement or other Applicable
Contract with respect to patents, trademarks, copyrights, or
other intellectual property, including agreements with current
or former employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual
Property Assets;
(vi) each collective bargaining agreement and other
Applicable Contract to or with any labor union or other
employee representative of a group of employees;
(vii) each joint venture, partnership, and other
Applicable Contract (however named) involving a sharing of
profits, losses, costs, or liabilities by any Acquired Company
with any other Person;
(viii) each Applicable Contract containing covenants
that in any way purport to restrict the business activity of
any Acquired Company or any Affiliate of an Acquired Company
or limit the freedom of any Acquired Company or any Affiliate
of an Acquired Company to engage in any line of business or to
compete with any Person;
(ix) each Applicable Contract providing for payments
to or by any Person based on sales, purchases, or profits,
other than direct payments for goods;
(x) each power of attorney that is currently
effective and outstanding;
(xi) each Applicable Contract entered into other than
in the Ordinary Course of Business that contains or provides
for an express undertaking by any Acquired Company to be
responsible for consequential, incidental, special or
28
punitive damages, for lost profits, or otherwise requires any
Acquired Company to indemnify any other Person for such other
Person's own negligence;
(xii) each Applicable Contract for capital
expenditures in excess of $100,000;
(xiii) each written warranty, guaranty, and or other
similar undertaking with respect to contractual performance
extended by any Acquired Company other than in the Ordinary
Course of Business; and
(xiv) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
Except as set forth in the second paragraph of Section 3.17(a) of the
Disclosure Letter, Section 3.17(a) of the Disclosure Letter sets forth
reasonably complete details concerning such Contracts, including the
parties to the Contracts, the amount of the remaining commitment of the
Acquired Companies under the Contracts, and the Acquired Companies'
office where details relating to the Contracts are located.
(b) Except as set forth in Section 3.17(b) of the Disclosure
Letter:
(i) neither of the Sellers nor any Affiliate of
either of the Sellers has or may acquire any rights under, and
neither of the Sellers has or may become subject to any
obligation or liability under, any Contract that relates to
the business of, or any of the assets owned or used by, any
Acquired Company; and
(ii) no officer, director, agent, employee,
consultant, or contractor of any Acquired Company is bound by
any Contract that purports to limit the ability of such
officer, director, agent, employee, consultant, or contractor
to (A) engage in or continue any conduct, activity, or
practice relating to the business of any Acquired Company, or
(B) assign to any Acquired Company or to any other Person any
rights to any invention, improvement, or discovery.
(c) Except as set forth in Section 3.17(c) of the Disclosure
Letter, each Contract identified or required to be identified in
Section 3.17(a) of the Disclosure Letter is in full force and effect
and is valid and enforceable in accordance with its terms.
(d) Except as set forth in Section 3.17(d) of the Disclosure
Letter:
(i) each Acquired Company is, and at all times has
been, in full compliance with all applicable terms and
requirements of each Contract under which such Acquired
Company has or had any obligation or liability or by which
such Acquired Company or any of the assets owned or used by
such Acquired Company is or was bound;
(ii) each other Person that has or had any obligation
or liability under any Contract under which an Acquired
Company has or had any rights is, and at
29
all times since January 1, 2002 has been, in full compliance
with all applicable terms and requirements of such Contract;
(iii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene,
conflict with, or result in a violation or breach of, or give
any Acquired Company or other Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any Applicable Contract; and
(iv) no Acquired Company has given to or received
from any other Person, at any time since January 1, 2002, any
notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Contract.
(e) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or
payable to any Acquired Company under current or completed Contracts
with any Person and no such Person has made written demand for such
renegotiation.
(f) The Contracts relating to the sale, design, manufacture,
or provision of products or services by the Acquired Companies have
been entered into in the Ordinary Course of Business and have been
entered into without the commission of any act alone or in concert with
any other Person, or any consideration having been paid or promised,
that is or would be in violation of any Legal Requirement.
SECTION 3.18 INSURANCE
(a) Sellers have delivered to Buyers:
(i) true and complete copies of all policies of
insurance to which any Acquired Company is a party or under
which any Acquired Company, or any Representative of any
Acquired Company, is or has been covered at any time within
the three (3) years preceding the date of this Agreement; and
(ii) true and complete copies of all pending
applications for policies of insurance.
(b) Section 3.18(b) of the Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting
any Acquired Company, including any reserves established
thereunder;
(ii) any contract or arrangement, other than a policy
of insurance, for the transfer or sharing of any risk by any
Acquired Company; and
(iii) all obligations of the Acquired Companies to
third parties with respect to insurance (including such
obligations under leases and service agreements) and
identifies the policy under which such coverage is provided.
30
(c) Section 3.18(c) of the Disclosure Letter sets forth, by
year, for the current policy year and each of the three preceding
policy years:
(i) a summary of the loss experience under each
policy;
(ii) a statement describing each claim under an
insurance policy for an amount in excess of $100,000, which
sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer,
type of insurance, and period of coverage; and
(C) the amount and a brief description of
the claim;
(D) whether the claim was paid or rejected
or is still pending; and
(iii) a statement describing the loss experience for
all claims that were self-insured, including the number and
aggregate cost of such claims.
(d) Except as set forth on Section 3.18(d) of the Disclosure
Letter and to the best knowledge of Sellers:
(i) All policies to which any Acquired Company is a
party or that provide coverage to either Seller, any Acquired
Company, or any Representative of an Acquired Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is
financially sound, reputable and duly licensed to do
business in the applicable jurisdiction;
(C) taken together, provide adequate
insurance coverage for the assets and the operations
of the Acquired Companies for all risks normally
insured against by a Person carrying on the same
business or businesses as the Acquired Companies;
(D) are sufficient for compliance with all
Legal Requirements and Contracts to which any
Acquired Company is a party or by which any of them
is bound;
(E) will continue in full force and effect
immediately following the Closing; and
(F) do not require the payment of any
premium or adjustment amount after the Closing in
respect of any insured period before Closing.
31
(ii) Neither of the Sellers nor any Acquired Company
has received (A) any refusal of coverage or any notice that a
defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any
insurance policy is no longer in full force or effect or will
not be renewed or that the issuer of any policy is not willing
or able to perform its obligations thereunder.
(iii) The Acquired Companies have paid all premiums
due, and have otherwise performed all of their respective
obligations, under each policy to which any Acquired Company
is a party or that provides coverage to any Acquired Company
or director thereof.
(iv) The Acquired Companies have given timely notice
to the insurer of all claims that may be insured thereby.
SECTION 3.19 ENVIRONMENTAL MATTERS
Except as set forth in Section 3.19 of the disclosure letter:
(a) Each Acquired Company is, and at all times has been, in
full compliance with, and has not been and is not in violation of or
liable under, any applicable Environmental Law, and there are no
pending or, to the Knowledge of Sellers and the Acquired Companies,
Threatened claims, Encumbrances, or other restrictions of any nature,
resulting from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any applicable Environmental Law, with
respect to or affecting any of the Facilities or any other properties
and assets (whether real, personal, or mixed) in which either Seller or
any Acquired Company has or had an interest.
(b) Neither of the Sellers nor any Acquired Company has any
basis to expect, nor has any of them or any other Person for whose
conduct they are or may be held responsible under applicable Legal
Requirements, (i) received, (A) any actual or Threatened order, notice,
or other communication from any Person, whether or not acting in the
public interest, of any actual or potential violation or failure to
comply with any applicable Environmental Law, or of any actual or
Threatened obligation to undertake or bear the cost of compliance with
any Environmental Law or Order relating thereto with respect to any of
the Facilities or any other properties or assets (whether real,
personal, or mixed) in either Seller or any Acquired Company has had an
interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by either Seller, any Acquired Company, or
any other Person for whose conduct they are or may be held responsible,
or from which Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or received, or (B)
any citation, directive, inquiry, notice, Order, summons, warning, or
other communication that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or failure to
comply with any applicable Environmental Law, or of any alleged,
actual, or potential obligation to undertake or bear the cost of
compliance with any Environmental Law or Order relating thereto with
respect to any of the Facilities or any other properties
32
or assets (whether real, personal, or mixed) in which either Seller or
any Acquired Company had an interest, or with respect to any property
or facility to which Hazardous Materials generated, manufactured,
refined, transferred, imported, used, or processed by either Seller,
any Acquired Company, or any other Person for whose conduct they are or
may be held responsible, have been transported, treated, stored,
handled, transferred, disposed, recycled, or received, or (ii) has any
liabilities under any Environmental Law or Order relating thereto with
respect to the Facilities or with respect to any other properties and
assets (whether real, personal, or mixed) in which either Seller or any
Acquired Company (or any predecessor), has or had an interest, or, to
the Knowledge of Sellers and the Acquired Companies, at any property
geologically or hydrologically adjoining the Facilities or any such
other property or assets. Neither Seller nor any Acquired Company nor
any other Person for whose conduct they are or may be held responsible,
nor to the Knowledge of Sellers and the Acquired Companies, any other
Person, has permitted or conducted, or is aware of, any Hazardous
Activity conducted with respect to the Facilities or any other
properties or assets (whether real, personal, or mixed) in which either
Seller or any Acquired Company has or had an interest except in full
compliance with all applicable Environmental Laws.
(c) There are no Hazardous Materials present on or in the
Environment at the Facilities or at any geologically or hydrologically
adjoining property, including any Hazardous Materials contained in
barrels, above or underground storage tanks, landfills, land deposits,
dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water,
sumps, or any other part of the Facilities or such adjoining property,
or incorporated into any structure therein or thereon. There has been
no Release or, to the Knowledge of Sellers and the Acquired Companies,
Threat of Release, of any Hazardous Materials at or from the Facilities
or at any other locations where any Hazardous Materials were generated,
manufactured, refined, stored, transferred, produced, imported, used,
or processed from or by the Facilities, or from or by any other
properties and assets (whether real, personal, or mixed) in which
either Seller or any Acquired Company has or had an interest, or to the
Knowledge of Sellers and the Acquired Companies any geologically or
hydrologically adjoining property, whether by either Seller, any
Acquired Company, or any other Person.
(d) Sellers have delivered to Buyers true and complete copies
and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Sellers or any Acquired Company pertaining to
Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by either Seller, any Acquired
Company, or any other Person for whose conduct they are or may be held
responsible, with applicable Environmental Laws.
SECTION 3.20 EMPLOYEES
(a) Sellers have previously provided Buyers a complete and
accurate list of the following information for each employee, agent,
representative, officer or director of the Acquired Companies,
including each employee on leave of absence or layoff status: employer;
name; job title; current compensation paid or payable and any change in
33
compensation since December 31, 2003; vacation accrued; and service
credited for purposes of vesting and eligibility to participate under
any Acquired Company's pension, retirement, profit-sharing,
thrift-savings, deferred compensation, stock bonus, stock option, cash
bonus, employee stock ownership (including investment credit or payroll
stock ownership), severance pay, insurance, medical, welfare, or
vacation plan, other Employee Pension Benefit Plan or Employee Welfare
Benefit Plan, or any other employee benefit plan or any Director Plan.
(b) To the best knowledge of the Sellers and the Acquired
Companies, no Person that is an employee, agent, representative,
officer or director of any Acquired Company and that immediately after
the Closing will be an employee, agent, representative or director of
any Acquired Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement, between such employee,
agent, representative, officer or director and any other Person
("PROPRIETARY RIGHTS AGREEMENT") that in any way adversely affects or
will affect (i) the performance of his duties as an employee, agent,
representative, officer or director of the Acquired Companies, or (ii)
the ability of any Acquired Company to conduct its business, including
any Proprietary Rights Agreement with Sellers or the Acquired Companies
by any such employee, agent, representative, officer or director.
Except as requested by Buyers pursuant to Section 7.4(b) or as
otherwise contemplated herein, to Sellers' and the Acquired Companies'
Knowledge, no director, officer, agent, representative or other key
employee or other Person of any Acquired Company intends to terminate
his employment or representation with such Acquired Company.
(c) Section 3.20(c) of the Disclosure Letter also contains a
complete and accurate list of the following information for each
retired employee or director of the Acquired Companies, or their
dependents, receiving benefits or scheduled to receive benefits in the
future: name, pension benefit, pension option election, retiree medical
insurance coverage, retiree life insurance coverage, and any other
benefits.
SECTION 3.21 LABOR RELATIONS; COMPLIANCE
Except as set forth in Section 3.19 of the Disclosure Letter, since May
21, 2000, no Acquired Company has been or is a party to any collective
bargaining or other labor Contract. Except as set forth in Section 3.19 of the
disclosure letter, since May 21, 2000, there has not been, there is not
presently pending or existing, and to Sellers' and the Acquired Companies'
Knowledge there is not Threatened, (a) any strike, slowdown, picketing, work
stoppage, or employee grievance process, (b) any Proceeding against or affecting
any Acquired Company relating to the alleged violation of any applicable Legal
Requirement pertaining to labor relations or employment matters, including any
charge or complaint filed by an employee or union with any Governmental Body,
organizational activity, or other labor or employment dispute against or
affecting any of the Acquired Companies or EAIDA or their premises, or (c) any
application for certification of a collective bargaining agent. No event has
occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute. There is no lockout of any employees by any
Acquired Company, and no such action is contemplated by any Acquired Company.
Each Acquired Company has complied in all respects with all applicable Legal
34
Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar Taxes, occupational safety and
health, and plant closing. No Acquired Company is liable for the payment of any
compensation, damages, Taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements
applicable to such Acquired Company.
SECTION 3.22 INTELLECTUAL PROPERTY
(a) Except as disclosed in Section 3.22(a) of the Disclosure
Letter, all of the Acquired Companies' Intellectual Property is owned,
used, or licensed by any Acquired Company as licensee or licensor.
(b) The Acquired Companies own or have the royalty-free right
and license (a) to all the Intellectual Property used in their
businesses as currently conducted and (b) (i) such Intellectual
Property are registered in the name of any of the Acquired Companies
are valid and enforceable; (ii) to the best Knowledge of Sellers, none
of such Intellectual Property is being infringed or violated by any
other Person; and (iii) the conduct of the Acquired Companies'
respective businesses and the use by the Acquired Companies of such
Intellectual Property do not infringe or violate the intellectual
property of any other Person.
SECTION 3.23 CERTAIN PAYMENTS
No Acquired Company or to the best of Sellers' Knowledge no director,
officer, agent, representative or employee of any Acquired Company, or any other
Person associated with or acting for or on behalf of any Acquired Company, has
directly or indirectly: (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment, regardless of form, whether in
money, property, or services, to any Person, private or public (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of any Acquired Company or any
Affiliate of an Acquired Company, or (iv) in violation of any applicable Legal
Requirement; (b) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment, regardless of form, whether in money,
property, or services, to any Person, private or public who is (i) a Person
identified on the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury
Department, Office of Foreign Assets Control and any other similar list
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
pursuant to any Legal Requirements (or if such list does not exist, the similar
list then being maintained by the United States, including, without limitation,
trade embargo, economic sanctions, or other prohibitions imposed by Executive
Order of the President of the United States) or (ii) a Person with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction or other prohibition of any applicable Legal
Requirement; (c) established or maintained any fund or asset that has not been
properly recorded in the books and records of the Acquired Companies; or (d)
taken or omitted to take any other action that would constitute a violation of
the FCPA if such Acquired Company had been subject to FCPA.
35
SECTION 3.24 DISCLOSURE
(a) No representation or warranty of Sellers in this Agreement
and no statement in the Disclosure Letter omits to state a material
fact necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.6 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances
in which they were made, not misleading.
(c) There is no fact known to either Seller that has specific
application to either Seller or any Acquired Company (other than
general economic or industry conditions) and that materially adversely
affects or, as far as either Seller can reasonably foresee, materially
Threatens, the assets, business, prospects, financial condition, or
results of operations of the Acquired Companies (on a consolidated
basis) that has not been set forth in this Agreement or the Disclosure
Letter.
SECTION 3.25 CONTROLS AND PROCEDURES
To the best of Sellers' Knowledge, since January 1, 2005, the Acquired
Companies have had in place controls and procedures designed and maintained to
ensure in all material respects that (a) transactions are executed in accordance
with management's general or specific authorizations, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, (c) access to
assets is permitted only in accordance with management's general or specific
authorization, (d) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences and (e) all such information is accumulated and
communicated to the Acquired Companies' management as appropriate or required
under GAAP and other applicable Legal Requirements. None of the Acquired
Companies nor their qualified statutory auditors have identified any
"significant deficiencies" or "material weaknesses" or "control deficiency" in
the Acquired Companies' internal controls. None of the Acquired Companies'
records, systems, controls, data or information are recorded, stored,
maintained, operated or otherwise wholly or partly dependent on or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) that (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Acquired
Companies or their accountants.
SECTION 3.26 RELATIONSHIPS WITH AFFILIATES
Except as set forth in Section 3.25 of the Disclosure Letter, neither
of the Sellers nor, to the best Knowledge of Sellers, any Affiliates of either
of the Sellers or of any Acquired Company (a) has, or since January 1, 2002 has
had, any interest in any property (whether real, personal, or mixed and whether
tangible or intangible), used in or pertaining to the Acquired Companies'
businesses or (b) is, or since January 1, 2002 has owned (of record or as a
beneficial owner) an equity interest or any other financial or profit interest
in, a Person that has (i) had business dealings or a material financial interest
in any transaction with any Acquired Company
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other than business dealings or transactions conducted in the Ordinary Course of
Business with the Acquired Companies at substantially prevailing market prices
and on substantially prevailing market terms, or (ii) engaged in competition
with any Acquired Company with respect to any line of the products or services
of such Acquired Company (a "COMPETING BUSINESS") in any market presently served
by such Acquired Company except for less than one percent of the outstanding
capital stock of any Competing Business that is publicly traded on any
recognized exchange or in the over-the-counter market. Except as set forth in
Section 3.26 of the Disclosure Letter, neither of the Sellers nor, to the best
Knowledge of Sellers, any Affiliate of either of the Sellers or of any Acquired
Company is a party to any Contract with, or has any claim or right against, any
Acquired Company.
SECTION 3.27 BROKERS OR FINDERS
Sellers and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
SECTION 3.28 NO OTHER REPRESENTATIONS
Except for the representations and warranties contained in this
Agreement and the other documents ancillary to this transaction, none of Sellers
makes any representation or warranty, express or implied, with respect to the
Contemplated Transactions.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers jointly and severally represent and warrant to Sellers as
follows:
SECTION 4.1 ORGANIZATION AND GOOD STANDING
Maverick Holdings is a Canadian unlimited liability company duly
organized, validly existing, and in good standing under the laws of the province
of Alberta, Canada. Maverick GP and Maverick Investment are
Delaware limited
liability companies duly organized, validly existing, and in good standing under
the laws of the State of
Delaware.
SECTION 4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of each Buyer, enforceable against each Buyer in accordance
with its terms. Upon the execution and delivery by each Buyer Party of
each of the Buyers' Closing Documents to which such Buyer Party is a
party, such Buyers' Closing Document will constitute the legal, valid,
and binding obligation of each Buyer Party who is a party thereto,
enforceable against each such Buyer Party in accordance with its terms.
Each Buyer has the absolute and unrestricted right, power, authority,
and capacity to execute
37
and deliver this Agreement and, subject to the expiration of the
required waiting period or other approval under the HSR Act, to perform
its obligations under this Agreement, and each Buyer Party has the
absolute and unrestricted right, power, authority, and capacity to
execute and deliver each of the Buyers' Closing Documents to which such
Buyer Party is a party and, subject to the expiration of the required
waiting period or other approval under the HSR Act, to perform such
Buyer Party's obligations under each of the Buyers' Closing Documents
to which such Buyer Party is a party.
(b) Except as set forth in Schedule 4.2, neither the execution
and delivery of this Agreement by Buyers nor the consummation or
performance of any of the Contemplated Transactions by Buyers will give
any Person the right to prevent, delay, or otherwise interfere with any
of the Contemplated Transactions pursuant to:
(i) any provision of Buyers' Organizational
Documents;
(ii) any resolution adopted by the board of directors
or the stockholders of Buyers;
(iii) any Legal Requirement or Order to which any
Buyer may be subject; or
(iv) any Contract to which any Buyer is a party or by
which any Buyer may be bound.
Except as set forth in Schedule 4.2, Buyers are not and will not be
required to obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
SECTION 4.3 INVESTMENT INTENT
Buyers are acquiring the Shares for their own account and not with a
view to their distribution within the meaning of Section 2(11) of the Securities
Act.
SECTION 4.4 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against any
Buyer and that challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the Contemplated
Transactions. To Buyers' Knowledge, no such Proceeding has been Threatened.
SECTION 4.5 BROKERS OR FINDERS
Buyers and their officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement for which
Sellers will be obligated and will indemnify and hold Sellers harmless from any
such payment alleged to be due by or through Buyers as a result of the action of
Buyers or its officers or agents.
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ARTICLE 5
COVENANTS OF SELLERS PRIOR TO CLOSING DATE
SECTION 5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, Sellers will,
and will cause each Acquired Company and its Representatives to, (a) afford
Buyers and Buyer's Representatives and prospective lenders and their
Representatives (collectively, "BUYERS' ADVISORS") full and free access to each
Acquired Company's personnel, properties (including subsurface testing),
contracts, books and records, and other documents and data, (b) furnish Buyers
and Buyers' Advisors with copies of all such contracts, books and records, and
other existing documents and data as Buyers may reasonably request, and (c)
furnish Buyers and Buyers' Advisors with such additional financial, operating,
and other data and information as Buyers may reasonably request.
SECTION 5.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES
Between the date of this Agreement and the Closing Date, Sellers will,
and will cause each Acquired Company to:
(a) conduct the business of such Acquired Company only in the
Ordinary Course of Business, including, without limitation, continuing
to collect receivables, pay payables and maintain inventory levels in
accordance with its past practices, and refrain from taking any action
that would constitute a Breach of any of the provisions of Section
3.16;
(b) use their Best Efforts to preserve intact the current
business organization of such Acquired Company, keep available the
services of the current officers, employees, and agents of such
Acquired Company, and maintain the relations and good will with
suppliers, customers, landlords, creditors, employees, agents, and
others having business relationships with such Acquired Company;
(c) confer with Buyers concerning operational matters of a
material nature; and
(d) otherwise report periodically to Buyers concerning the
status of the business, operations, and finances of such Acquired
Company.
SECTION 5.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, Sellers will not, and will cause
each Acquired Company not to, without the prior written consent of Buyers, which
consent may be withheld in Buyers' sole discretion, take any affirmative action,
or fail to take any reasonable action within their or its control, as a result
of which any of the changes or events listed in Section 3.16 is likely to occur.
39
SECTION 5.4 COMPLIANCE WITH FCPA
Between the date of this Agreement and the Closing Date, Sellers will,
and will cause each Acquired Company to comply with all provisions of the FCPA.
Sellers acknowledge that the FCPA prohibits the payment or giving of anything of
value either directly or indirectly to an official of a foreign government or
governmental entity for the purpose of influencing an act or decision in his
official capacity, or inducing him to use his influence with the foreign
government or governmental entity. Sellers agree to advise all of their and
their respective Affiliates' officers, employees, agents and representatives who
are engaged in implementing this Agreement and performing services relating to
the business of any of the Acquired Companies regarding the purposes and
provisions of the FCPA. Sellers shall take appropriate steps to ensure that
their and their Affiliates and their respective officers, directors, employees,
agents and representatives will comply with the FCPA and will not take any
actions that would cause any other party hereto, or any of their respective
Affiliates, to be in violation of the FCPA.
SECTION 5.5 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Sellers
will, and will cause each Acquired Company to, make all filings required by
Legal Requirements to be made by them in order to consummate the Contemplated
Transactions (including all filings under the HSR Act and, if required, any
other country's correlative Legal Requirements). Between the date of this
Agreement and the Closing Date, Sellers will, and will cause each Acquired
Company to, (a) cooperate with Buyers with respect to all filings that Buyers
elect to make or is required by Legal Requirements to make in connection with
the Contemplated Transactions, and (b) cooperate with Buyers in obtaining all
consents identified in Schedule 4.2 (including taking all actions requested by
Buyers to cause early termination of any applicable waiting period under the HSR
Act and any applicable waiting period under the correlative Colombian,
Venezuelan, Ecuadorian or Canadian Legal Requirements.
SECTION 5.6 NOTIFICATION
Between the date of this Agreement and the Closing Date, Sellers will
promptly notify Buyers in writing if Sellers or any Acquired Company becomes
aware of any fact or condition that causes or constitutes a Breach of any of
Sellers' representations and warranties as of the date of this Agreement, or if
Sellers or any Acquired Company becomes aware of the occurrence after the date
of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. Should any such
fact or condition require any change in the Disclosure Letter if the Disclosure
Letter were dated the date of the occurrence or discovery of any such fact or
condition, Sellers will promptly deliver to Buyers a supplement to the
Disclosure Letter specifying such change. During the same period, Sellers will
promptly notify Buyers of the occurrence of any Breach of any covenant of
Sellers in this Article 5 or of the occurrence of any event that may make the
satisfaction of the conditions in Article 7 impossible or unlikely. No notice
given pursuant to this Section 5.6 will contain any untrue statement or omit to
state a material fact necessary to make the statements therein or in this
Agreement, in light of the circumstances in which they were made, not
misleading.
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SECTION 5.7 PAYMENT OF INDEBTEDNESS BY AFFILIATES
Except as expressly provided in this Agreement, Sellers will cause all
indebtedness owed to an Acquired Company by either Seller or any Affiliate of
either Seller to be paid in full prior to Closing.
SECTION 5.8 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Article 9, Sellers (a) will not, (b) will cause each Acquired Company and each
of their Representatives not to, directly or indirectly solicit, initiate, or
encourage and (c) will and will cause their Representatives to cease all
discussions with third parties regarding any inquiries or proposals from,
discuss or negotiate with, provide any non-public information to, or consider
the merits of any unsolicited inquiries or proposals from, any Person (other
than Buyers) relating to any transaction involving the sale of the business or
assets (other than in the Ordinary Course of Business) of any Acquired Company,
or any of the capital stock of any Acquired Company, or any merger,
consolidation, business combination, or similar transaction involving any
Acquired Company.
SECTION 5.9 RISK OF LOSS
(a) In the event of the damage or destruction of any asset or
property of any of the Acquired Companies prior to Closing, Sellers
shall promptly notify Buyers of such damage or destruction, and Sellers
shall, at Sellers' option, either (i) repair such asset or property and
restore it to the condition it was in immediately prior to such damage
or destruction at Sellers' sole cost and expense or (ii) reduce the
Purchase Price by an amount equal to the net insurance proceeds, if
any, received by Sellers or the applicable Acquired Company on or prior
to the Closing in respect of such damage or destruction, plus the
amount of any deductible or self retention amount applicable to such
damage or destruction and at the Closing assign to the applicable
Acquired Company any rights Sellers have to receive any additional
insurance proceeds or payments with respect to such damage or
destruction. In the event that Sellers elect to repair such damage or
destruction, Sellers shall be entitled to receive and retain all
insurance proceeds, if any, received by Sellers or the applicable
Acquired Company in respect of such damage or destruction, and at the
Closing Sellers shall cause the applicable Acquired Company to assign
to Sellers any rights the applicable Acquired Company has to receive
any additional insurance proceeds or payments with respect to such
damage or destruction. Except as provided in Section 5.9(b), the
Closing shall, subject to the conditions set forth in Article 7 and
Article 8 hereof, occur pursuant to Section 2.3 hereof without delay.
(b) Notwithstanding the provisions of Section 5.9(a), Sellers
and Buyers agree that if the damage or destruction covered by that
provision is such that Sellers or Buyers in good faith reasonably
expects the amount thereof to be in excess of $50,000,000, then Buyers
may terminate this Agreement. Unless terminated as hereinbefore
provided in this Section 5.9(b), the Contemplated Transactions shall
otherwise be consummated, subject to the conditions set forth in
Article 7 and Article 8 hereof, as though such destruction or damage
had not occurred.
41
(c) If, prior to the Closing Date, all or any significant
portion (as defined in this Section 5.9(c)) of the assets or properties
of any Acquired Company is taken by eminent domain or similar taking
(or is the subject of a pending taking which has not yet been
consummated), Sellers shall notify Buyers of such fact promptly after
obtaining Knowledge thereof, and Buyers shall have the right to
terminate this Agreement by giving notice to Sellers not later than ten
days after the giving of Sellers' notice. For the purposes hereof, a
"significant portion" of the assets or properties of an Acquired
Company shall mean such a portion of the applicable Acquired Company's
assets or properties as shall be necessary, as reasonably determined by
Buyers, for the operation of such Acquired Company's business or
operations in the Ordinary Course, without causing a material adverse
effect on such Acquired Company's business or operations. If Buyers do
not elect to terminate this Agreement as aforesaid, or if an
"insignificant portion" (i.e., anything other than a significant
portion) of an Acquired Company's assets or properties is taken by
eminent domain (or becomes the subject of a pending taking), there
shall be no reduction of the Purchase Price, and Sellers shall assign
to the applicable Acquired Company (without recourse) at the Closing
all rights of Sellers to the awards, if any, for the taking, and the
applicable Acquired Company shall be entitled to receive and keep all
awards for the taking of its assets or properties or such portion
thereof.
SECTION 5.10 BEST EFFORTS
Between the date of this Agreement and the Closing Date, each Seller
will use its respective Best Efforts to cause the conditions in Article 7 and
Article 8 to be satisfied.
SECTION 5.11 TAX FORM 8832 AND DISREGARDED ENTITY TREATMENT
Prior to or as of the Closing Sellers will, and upon request, Buyers
will use their reasonable efforts to assist Sellers, to cause an IRS Form 8832
to be properly executed and properly filed with respect to each of International
Growth, Select Growth, Growth Investors and Select Common, and each such IRS
Form 8832 shall properly elect for each of International Growth, Select Growth,
Growth Investors and Select Common to be classified as a disregarded entity for
U.S. federal income tax purposes. Each of International Growth, Select Growth,
Growth Investors and Select Common have been formed as and shall remain at all
times an eligible entity for which an election to be classified as a disregarded
entity for U.S. federal income tax purposes can properly be made under U.S.
Treasury Regulations section 301.7701 until such election is effective. As of
the Closing, each of International Growth, Select Growth, Growth Investors and
Select Common will be a disregarded entity for U.S. federal income tax purposes.
ARTICLE 6
COVENANTS OF BUYERS PRIOR TO CLOSING DATE
SECTION 6.1 APPROVALS OF GOVERNMENTAL BODIES
As promptly as practicable, Buyers will, and will cause each of its
Affiliates to, make all filings required by Legal Requirements to be made by
them to consummate the Contemplated
42
Transactions (including all filings under the HSR Act and, if required, the
correlative Colombian, Venezuelan, Ecuadorian or Canadian Legal Requirements).
Between the date of this Agreement and the Closing Date, Buyers will, and will
cause each Affiliate to, (a) cooperate with Sellers with respect to all filings
that Sellers are required by Legal Requirements to make in connection with the
Contemplated Transactions, and (b) cooperate with Sellers in obtaining all
consents identified in Section 3.2(b) of the Disclosure Letter; provided that
this Agreement will not require Buyers to dispose of or make any change in any
portion of its business or to incur any other burden to obtain a Governmental
Authorization.
SECTION 6.2 BEST EFFORTS
Except as set forth in the proviso to Section 6.1, between the date of
this Agreement and the Closing Date, each Buyer will use its respective Best
Efforts to cause the conditions in Article 7 and Article 8 to be satisfied.
SECTION 6.3 NOTIFICATION
Between the date of this Agreement and the Closing Date, (a) Buyers
will promptly notify Sellers in writing if Buyers have Knowledge of any fact or
condition that causes or constitutes a Breach of any of Buyers' representations
and warranties as of the date of this Agreement, or if Buyers become aware of
the occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition, and (b) Buyers will promptly notify Sellers of the occurrence of any
Breach of any covenant of Sellers in this Article 6 of which the Buyers have
Knowledge or of the occurrence of any event that to the Buyers' Knowledge may
make the satisfaction of the conditions in Article 7 impossible or unlikely,
provided that the delay or failure by Buyers to so promptly notify Sellers in
accordance with clause (a) or (b) of this Section 6.3 shall not (x) constitute a
breach, violation or default of this Agreement or (y) limit, reduce or modify in
any respect Buyers' rights under this Agreement.
SECTION 6.4 RELEASE OF GUARANTIES
Buyers shall use their respective Best Efforts to obtain releases of
all collateral, guaranties, letters of credit and similar security instruments
securing the obligations of one or more of the Acquired Companies provided by
either Seller or any of their respective Affiliates (other than the Acquired
Companies) and described in Section 6.4 of the Disclosure Letter (collectively,
the "SELLERS' COLLATERAL") within thirty days after the Closing. With respect to
any of the Sellers' Collateral with respect to which Buyers have not obtained a
release on or before the expiration of such 30-day period, Buyers shall, at
Buyers sole option, either (a) pay in full the obligations such unreleased
Sellers' Collateral secures or (b) purchase such unreleased Sellers' Collateral
from the applicable Seller or Affiliate for its then fair market value.
SECTION 6.5 CERTAIN ACCOUNTS RECEIVABLE
With respect to all accounts receivable of the Acquired Companies that
arise prior to the Closing (whether or not recorded on the books of the Acquired
Companies) but that remain
43
uncollected as of the Closing (collectively, the "UNCOLLECTED RECEIVABLES"),
Buyers shall use their respective Best Efforts, and shall cause the Acquired
Companies to use their respective Best Efforts, to collect all such Uncollected
Receivables following the Closing. All amounts collected by Buyers from any
Person from whom any Uncollected Receivables are due shall be applied to the
account of such Person on a first-in/first-out basis, such that amounts
collected from such Person will be applied first to all Uncollected Receivables
due from such Person and then to any accounts receivable due from such Person
that arise after the Closing only after all Uncollected Receivables due from
such Person have been paid in full. Within five Business Days after delivery by
Buyers of a written statement to Sellers listing all Uncollected Receivables
that, despite the Best Efforts of Buyers and the Acquired Companies to collect
them, remained outstanding and uncollected ninety days after the Closing Date,
including the amounts thereof, Sellers shall pay to Buyers, by wire transfer of
immediately available funds to an account designated by Buyers in such written
statement, the full amount of all such Uncollected Receivables that remained
outstanding as of the ninetieth day after the Closing Date, as set forth in such
written statement, less the amount of the reserve in respect of accounts
receivable reflected on the Interim Balance Sheet. Thereafter, Buyers shall
continue to use their respective Best Efforts, and shall cause the Acquired
Companies to continue to use their respective Best Efforts, to collect all such
Uncollected Receivables until the expiration of the applicable statute of
limitations for such Uncollected Receivables, and Buyers shall pay to Sellers
all amounts collected after the ninetieth day after the Closing Date in respect
thereof promptly after receipt of such amounts. The provisions of this Section
6.5 shall be Buyers' sole remedy with respect all Uncollected Receivables, and
the provisions of Article 10 shall not apply with respect to the Uncollected
Receivables; provided, however, that the provisions of Article 10 shall be
applicable to any Breach of the provisions of this Section 6.5.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYERS' OBLIGATION TO CLOSE
Buyers' obligation to purchase the Shares and to take the other actions
required to be taken by Buyers at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyers, in whole or in part):
SECTION 7.1 ACCURACY OF REPRESENTATIONS
(a) All of Sellers' representations and warranties in this
Agreement (considered collectively), and each of these representations
and warranties (considered individually), must have been accurate in
all material respects except where such representation or warranty is
qualified by materiality, in which case such representation or warranty
must have been accurate in all respects as of the date of this
Agreement, and must be accurate in all material respects except where
such representation or warranty is qualified by materiality, in which
case such representation or warranty must have been accurate in all
respects as of the Closing Date as if made on the Closing Date, without
giving effect to any supplement to the Disclosure Letter.
(b) Each of Sellers' representations and warranties in Section
3.3, Section 3.4, Section 3.12 and Section 3.24 must have been accurate
in all respects as of the date of
44
this Agreement, and must be accurate in all respects as of the Closing
Date as if made on the Closing Date, without giving effect to any
supplement to the Disclosure Letter.
SECTION 7.2 SELLERS' PERFORMANCE
(a) All of the covenants and obligations that Sellers are
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have been
duly performed and complied with in all material respects.
(b) Each document required to be delivered pursuant to Section
2.4 must have been delivered, and each of the other covenants and
obligations in Section 5.4 and Section 5.10 must have been performed
and complied with in all respects.
SECTION 7.3 APPROVALS
(a) Each of the Consents identified in Section 3.2(b) of the
Disclosure Letter, and each Consent identified in Schedule 4.2, must
have been obtained and must be in full force and effect.
(b) Any waiting period (and any extensions thereof) applicable
to the consummation of the Contemplated Transactions under the HSR Act
shall have expired or been terminated and all similar or other
applicable requirements of the Canadian, Venezuelan, Ecuadorian or
Colombian Legal Requirements shall have been satisfied.
SECTION 7.4 ADDITIONAL DOCUMENTS
Each of the following documents must have been delivered to Buyers:
(a) an opinion or opinions of Xxxxx-Xxxxxx, Xxxxxxx, Samper,
Suarez, Xxxxxxxx Abogados S.A. or such other law firm or firms as may
be reasonably acceptable to Buyers, dated the Closing Date, in form and
substance typically provided by counsel for the seller party or parties
in transactions such as those contemplated by this Agreement, as well
as an opinion in form and substance reasonably satisfactory to Buyers
as to the inapplicability of any filing or approval requirements under
Colombian Legal Requirements in connection with this Agreement and the
consummation of the Contemplated Transactions;
(b) written resignations of each officer and director of each
Acquired Company designated by Buyers by written notice to
Sellers not less than two Business Days prior to the Closing;
(b) the original share certificates of the nominal
stockholders of TuboCaribe, duly endorsed to the Persons Buyers have
designated to be the nominal stockholders of such Company, to complete
the acquisition of 100% of the ownership interests of such Company; and
45
(c) such other documents as Buyers may reasonably request for
the purpose of (i) evidencing the accuracy of any of Sellers'
representations and warranties, (ii) evidencing the performance by
Sellers of, or the compliance by Sellers with, any covenant or
obligation required to be performed or complied with by Sellers, (iii)
evidencing the satisfaction of any condition referred to in this
Article 7, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.
SECTION 7.5 NO PROCEEDINGS OR INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Sellers to Buyers or
(b) may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, or that seeks damages for which Buyers would not be fully
indemnified from and against (including, without limitation, indemnification for
attorneys' fees and other costs and expenses incurred in connection with such
matter and not subject to the limitation in Section 10.6(a)) by Sellers pursuant
to Article 10 in respect of, any of the Contemplated Transactions and (b) has
been adopted or issued, or has otherwise become effective, since the date of
this Agreement.
SECTION 7.6 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or Threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, any stock of, or any
other voting, equity, or ownership interest in, any of the Acquired Companies,
or (b) is entitled to all or any portion of the Purchase Price payable for the
Shares.
SECTION 7.7 NO PROHIBITION
Neither the consummation nor the performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time), materially contravene, or conflict with, or result in a material
violation of, or cause Buyers or any Person affiliated with Buyers to suffer any
material adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been published,
introduced, or otherwise proposed by or before any Governmental Body.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Sellers, in whole or in part):
SECTION 8.1 ACCURACY OF REPRESENTATIONS
All of Buyers' representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), must
46
have been accurate in all material respects except where such representation or
warranty is qualified by materiality, in which case such representation or
warranty must have been accurate in all respects as of the date of this
Agreement and must be accurate in all material respects except where such
representation or warranty is qualified by materiality, in which case such
representation or warranty must have been accurate in all respects as of the
Closing Date as if made on the Closing Date.
SECTION 8.2 BUYERS' PERFORMANCE
(a) All of the covenants and obligations that Buyers are
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have been
performed and complied with in all material respects.
(b) Buyers must have delivered each of the documents required
to be delivered by Buyers pursuant to Section 2.4 and must have made
the cash payments required to be made by Buyers pursuant to Section
2.4(b)(i) and Section 2.4(b)(iv).
SECTION 8.3 APPROVALS
Any waiting period (and any extensions thereof) applicable to the
consummation of the Contemplated Transactions under the HSR Act shall have
expired or been terminated and all similar or other applicable requirements of
any other country's correlative Legal Requirements shall have been satisfied.
SECTION 8.4 ADDITIONAL DOCUMENTS
Buyers must have caused the following documents to be delivered to
Sellers such other documents as Sellers may reasonably request for the purpose
of (i) enabling their counsel to provide the opinion referred to in Section
7.4(a), (ii) evidencing the accuracy of any representation or warranty of
Buyers, (iii) evidencing the performance by Buyers of, or the compliance by
Buyers with, any covenant or obligation required to be performed or complied
with by Buyers, (iv) evidencing the satisfaction of any condition referred to in
this Article 8, or (v) otherwise facilitating the consummation of any of the
Contemplated Transactions.
SECTION 8.5 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Sellers to Buyers and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
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ARTICLE 9
TERMINATION AND RESCISSION
SECTION 9.1 TERMINATION AND RESCISSION EVENTS
Termination. This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) by either Buyers or Sellers if a material Breach of any
provision of this Agreement has been committed by the other party and
such Breach has not been waived;
(b) (i) by Buyers if any of the conditions in Article 7 has
not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyers to comply with its obligations under this Agreement) and Buyers
have not waived such condition on or before the Closing Date; or (ii)
by Sellers, if any of the conditions in Article 8 has not been
satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Sellers to
comply with his obligations under this Agreement) and Sellers have not
waived such condition on or before the Closing Date;
(c) by Buyers if any Proceeding is instituted or Threatened by
any Governmental Body or other Person pursuant to any Legal
Requirements;
(d) by mutual consent of Buyers and Sellers; or
(e) by either Buyers or Sellers if the Closing has not
occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) on or before August 31, 2005, or such later date as the
parties may agree upon.
(f) By Buyers if Buyers provide notice to Sellers of their
determination, in their sole discretion. Any notice by Buyers pursuant
to this Section 9.1(f) shall be provided to the address or facsimile
number set forth in Section 11.5, below, or via electronic mail to
xxxxxx@xxxxxxxxx.xxx, with a copy to xxxxxxxxxxx@xxxxx.xxx, not later
than 8:00 a.m. Central Daylight Time on the next calendar day following
the date on which this Agreement is executed by Buyers and Sellers and
delivered in accordance with the terms hereof; provided, however, that
in the event that this Agreement shall be executed and delivered by all
parties on or after 8:00 p.m. Central Daylight Time on such execution
date, then the following day's deadline for notice shall be extended by
such period of time after, 8:00 p.m. Central Daylight Time that the
execution and delivery of this Agreement actually occurs.
SECTION 9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 9.1, this
48
Agreement shall forthwith become void, and all rights and obligations of each
party hereto shall cease, except for those set forth in this Section 9.2 and in
Section 9.3, Section 11.1, Section 11.4, Section 11.6 and Section 11.15 of this
Agreement and Section 2.2 of the Disclosure Letter.
SECTION 9.3 TERMINATION FEES
(a) In the event that Buyers shall terminate this Agreement
pursuant to (i) Section 9.1(a), (ii) Section 9.1(b)(i) and the failure
of the applicable condition is the result of Sellers' failure to comply
with one or more of its obligations under this Agreement, (iii) Section
9.1(b)(i) for failure of any of the conditions to Buyers' obligations
set forth in Section 7.3(a) or Section 7.7 and such failure is not the
result of Buyers' failure to comply with one or more of its obligations
under this Agreement or (iv) Section 9.1(c), Sellers shall pay to
Buyers, as liquidated damages, the sum of $15,000,000 (the "BUYERS'
TERMINATION FEE"). Any payment of the Buyers' Termination Fee to be
made pursuant to this Section 9.3(a) shall be made not later than five
Business Days after the proper termination of this Agreement and shall
be made by wire transfer of immediately available funds to an account
previously designated by Buyers. In addition, if at any time within
eighteen (18) months after the termination of this Agreement by Sellers
for any reason other than a termination pursuant to Section 9.1(a),
Section 9.1(b)(ii) or by Buyers pursuant to Section 9.1(a), Section
9.1(b)(i) or Section 9.1(c), Sellers or any Affiliate of Sellers sell,
transfer or otherwise dispose of, or enter into any agreement, option,
letter of intent or similar understanding or transaction regarding more
than 25% of the total assets of the business of the Acquired Companies
(whether by asset sale, stock sale, merger, liquidation or otherwise,
and whether in one or a series of transactions) to any Person other
than Buyers or Buyers' Affiliate and other than to Sellers or any
Affiliate of Sellers or to any Person who is at the date hereof a
stockholder of Sellers or any Affiliate of Sellers, then, in that
event, Sellers shall pay Buyers a topping fee (the "TOPPING FEE"), in
immediately available funds, equal to five percent (5%) of the Purchase
Price, the payment of which Topping Fee shall be jointly and severally
guaranteed by each of the Acquired Companies. Notwithstanding the
foregoing, if Buyers terminate this Agreement pursuant to Section
9.1(b)(i) as a result of a failure of the condition set forth in
Section 7.5, Buyers shall be entitled to receive the Buyers'
Termination Fee and, if applicable, the Topping Fee only if the failure
of such condition is the result of a Proceeding initiated by either
Seller, any Acquired Company or any of their respective Affiliates.
(b) In the event that Sellers shall terminate this Agreement
pursuant to (i) Section 9.1(a) or (ii) Section 9.1(b)(ii) and the
failure of the applicable condition is the result of Buyers' failure to
comply with one or more of its obligations under this Agreement, Buyers
shall pay to Sellers, as liquidated damages, the sum of $15,000,000
(the "SELLERS' TERMINATION Fee"). Any payment of the Sellers'
Termination Fee to be made pursuant to this Section 9.3(b) shall be
made not later than five Business Days after the proper termination of
this Agreement and shall be made by wire transfer of immediately
available funds to an account previously designated by Sellers.
Notwithstanding the foregoing, if Sellers terminate this Agreement
pursuant to Section 9.1(b)(ii) as a result of a failure of the
condition set forth in Section 8.5, Sellers shall be entitled to
receive the Sellers' Termination Fee only if the failure of such
49
condition is the result of a Proceeding initiated by any Buyer or any
of their respective Affiliates.
ARTICLE 10
INDEMNIFICATION; REMEDIES
SECTION 10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Letter, the supplements to the Disclosure Letter, the
certificates delivered pursuant to Section 2.4(a)(vi) and Section 2.4(b)(v), and
any other certificate or document delivered pursuant to this Agreement will
survive the Closing in accordance with Section 10.5. The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
SECTION 10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS
Sellers, jointly and severally, shall indemnify and hold harmless
Buyers, the Acquired Companies, and their respective Representatives,
stockholders, controlling persons, and affiliates (collectively, the
"INDEMNIFIED PERSONS") for, and shall pay to the Indemnified Persons the amount
of, any loss, liability, claim, damage (including incidental damages), expense
(including costs of investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party claim (collectively,
"DAMAGES"), arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
Sellers in this Agreement (without giving effect to any supplement to
the Disclosure Letter), the Disclosure Letter, the supplements to the
Disclosure Letter, or any other certificate or document delivered by
Sellers pursuant to this Agreement;
(b) any Breach of any representation or warranty made by
Sellers in this Agreement as if such representation or warranty were
made on and as of the Closing Date without giving effect to any
supplement to the Disclosure Letter, other than any such Breach that is
disclosed in a supplement to the Disclosure Letter and is expressly
identified in the certificate delivered pursuant to Section 2.4(a)(vi)
as having caused the condition specified in Section 7.1 not to be
satisfied;
50
(c) any Breach by Sellers of any covenant or obligation of
Sellers in this Agreement or any Section of the Disclosure Letter;
(d) any product shipped or manufactured by, or any services
provided by, any Acquired Company prior to the Closing Date except to
the extent such product or services was covered by insurance less the
retention amounts;
(e) any matter disclosed in the Disclosure Letter that
provides for indemnification pursuant to this Section 10.2(e) in
respect thereof; or
(f) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with Sellers
or any Acquired Company (or any Person acting on their behalf) in
connection with any of the Contemplated Transactions.
The remedies provided in this Section 10.2 will not be exclusive of or limit any
other remedies that may be available to Buyers or the other Indemnified Persons.
SECTION 10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS--ENVIRONMENTAL
MATTERS
In addition to the provisions of Section 10.2, Sellers, jointly and
severally, shall indemnify and hold harmless Buyers, the Acquired Companies, and
the other Indemnified Persons for, and shall pay to Buyers, the Acquired
Companies, and the other Indemnified Persons the amount of, any Damages
(including costs of cleanup, containment, or other remediation) arising,
directly or indirectly, from or in connection with:
(a) any Environmental, Health, and Safety Liabilities arising
out of or relating to: (i) (A) the ownership, operation, or condition
at any time on or prior to the Closing Date of the Facilities or any
other properties and assets (whether real, personal, or mixed and
whether tangible or intangible) in which either Seller or any Acquired
Company has or had an interest, or (B) any Hazardous Materials or other
contaminants that were present on the Facilities or such other
properties and assets at any time on or prior to the Closing Date; or
(ii) (A) any Hazardous Materials or other contaminants, wherever
located, that were, or were allegedly, generated, transported, stored,
treated, Released, or otherwise handled by either Seller or any
Acquired Company or by any other Person for whose conduct they are or
may be held responsible at any time on or prior to the Closing Date, or
(B) any Hazardous Activities that were, or were allegedly, conducted by
either Seller or any Acquired Company or by any other Person for whose
conduct they are or may be held responsible; or
(b) any bodily injury (including illness, disability, and
death, and regardless of when any such bodily injury occurred, was
incurred, or manifested itself), personal injury, property damage
(including trespass, nuisance, wrongful eviction, and deprivation of
the use of real property), or other damage of or to any Person,
including any employee or former employee of either Seller or any
Acquired Company or any other Person for whose conduct they are or may
be held responsible, in any way arising from or allegedly arising from
any Hazardous Activity conducted or allegedly conducted with respect to
the
51
Facilities or the operation of the Acquired Companies prior to the
Closing Date, or from Hazardous Material that was (i) present or
suspected to be present on or before the Closing Date on or at the
Facilities (or present or suspected to be present on any other
property, if such Hazardous Material emanated or allegedly emanated
from any of the Facilities and was present or suspected to be present
on any of the Facilities on or prior to the Closing Date) or (ii)
Released or allegedly Released by either Seller or any Acquired Company
or any other Person for whose conduct they are or may be held
responsible, at any time on or prior to the Closing Date.
Buyers will be entitled to control any Cleanup, any related Proceeding, and,
except as provided in the following sentence, any other Proceeding with respect
to which indemnity may be sought under this Section 10.3. The procedure
described in Section 10.9 will apply to any claim solely for monetary damages
relating to a matter covered by this Section 10.3.
SECTION 10.4 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYERS
Buyers, jointly and severally, shall indemnify and hold harmless
Sellers, and shall pay to Sellers the amount of any Damages arising, directly or
indirectly, from or in connection with (a) any Breach of any representation or
warranty made by Buyers in this Agreement or in any certificate delivered by
Buyers pursuant to this Agreement, (b) any Breach by Buyers of any covenant or
obligation of Buyers in this Agreement, (c) any claim by any Person for
brokerage or finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by such Person with Buyers
(or any Person acting on its behalf) in connection with any of the Contemplated
Transactions or (d) the failure of Buyers to release the collateral on Related
Party Indebtedness within 30 days of Closing.
SECTION 10.5 TIME LIMITATIONS
(a) If the Closing occurs, Sellers shall have no liability
(for indemnification or otherwise) with respect to: (i) any
representation or warranty, or covenant or obligation to be performed
and complied with prior to the Closing Date (other than those in
Section 3.1, Section 3.2, Section 3.3, the third sentence of Section
3.6, Section 3.11, or Section 3.19) unless on or before the second
anniversary of the Closing Date Buyers notify Sellers of a claim
specifying the factual basis of that claim in reasonable detail to the
extent then known by Buyers; and (ii) the representations and
warranties in Section 3.11, or a claim for indemnification or
reimbursement not based upon any representation or warranty or any
covenant or obligation to be performed and complied with prior to the
Closing Date, unless on or before the date that is sixty days after the
applicable statute of limitations period for such matters as determined
by Buyers in their sole discretion, Buyers notify Sellers of a claim
specifying the factual basis of that claim in reasonable detail to the
extent then known by Buyers. A claim with respect to the
representations and warranties in Section 3.1, Section 3.2, Section
3.3, the third sentence of Section 3.6, or Section 3.19 may be made at
any time by written notice thereof from Buyers to Sellers.
(b) If the Closing occurs, Buyers will have no liability (for
indemnification or otherwise) with respect to any representation or
warranty, or covenant or obligation to be
52
performed and complied with prior to the Closing Date, other than those
in Section 4.2, unless on or before the second anniversary of the
Closing Date Sellers notify Buyers of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by
Seller. A claim with respect to the representations and warranties in
Section 4.2 may be made at any time by written notice thereof from
Sellers to Buyers.
SECTION 10.6 LIMITATIONS ON AMOUNT--SELLERS
(a) Sellers will have no liability (for indemnification or
otherwise) with respect to the matters described in clause (a), clause
(b), clause (c), clause (d) or clause (f) of Section 10.2 until the
total of all Damages with respect to such matters exceeds $250,000 (the
"THRESHOLD AMOUNT"); provided, however, that once the total of all
Damages with respect to such matters exceeds the Threshold Amount,
Sellers shall, subject to Section 10.6(b) and Section 10.6(c), be
liable for the total of all such Damages, including the Threshold
Amount. Notwithstanding the foregoing, the limitations on Sellers'
liability set forth in this Section 10.6(a) shall not apply to (i) the
matters described in clause (e) of Section 10.2, (ii) Sellers'
liability under Section 10.3, (iii) any Breach of any of Sellers'
representations and warranties in Section 3.1, Section 3.2, Section
3.3, the third sentence of Section 3.6, Section 3.11, Section 3.13, or
Section 3.19, (iv) any Breach of any of Sellers' other representations
and warranties of which either Seller or any Affiliate of either Seller
had Knowledge at any time prior to the date on which such other
representation and warranty is made or (v) any intentional Breach by
either Seller of any covenant or obligation, and, subject to the
limitations of Section 10.6(c) below, Sellers shall be liable for all
Damages with respect to all such matters without regard to whether or
not the Threshold Amount has been exceeded; provided, however, that, in
determining whether the Threshold Amount has been exceeded for purposes
of this Section 10.6(a), all Damages in respect of the matters
described in the preceding clauses (i) - (v) shall be included.
(b) Subject to Section 10.6(c) below, Sellers' maximum
aggregate liability for all Damages with respect to the matters
described in clause (a), clause (b), clause (c), clause (d) and clause
(f) of Section 10.2 shall not exceed $15,000,000.
(c) Notwithstanding the provisions of Section 10.6(b) above,
Sellers' maximum aggregate liability for all Damages in respect of (i)
the matters described in clause (e) of Section 10.2, (ii) Sellers'
liability under Section 10.3, (iii) any Breach of any of Sellers'
representations and warranties in Section 3.1, Section 3.2, Section
3.3, the third sentence of Section 3.6, Section 3.11, Section 3.13, or
Section 3.19, (iv) any Breach of any of Sellers' other representations
and warranties of which either Seller or any Affiliate of either Seller
had Knowledge at any time prior to the date on which such other
representation and warranty is made or (v) any intentional Breach by
either Seller of any covenant or obligation shall not exceed the
Purchase Price, and Sellers shall be liable for all Damages in respect
of such matters up to such amount.
(d) Notwithstanding any other provision of this Article 10, in
the event of a Breach of any of Sellers' representations or warranties
in Section 3.6 other than those in the first or second sentence
thereof, Sellers shall have a period of ninety days after receipt
53
of notice of such Breach from Buyers (each such 90-day period a "TITLE
BREACH CURE PERIOD") in which to cure such Breach, and Sellers shall
have no liability under this Article 10 for any such Breach unless such
Breach remains uncured upon the expiration of the Title Breach Cure
Period for such Breach; provided, however, that, subject to the
limitations of Section 10.6(a), Section 10.6(b) and Section 10.6(c), as
applicable, Sellers shall be liable for all Damages in respect of such
Breach if such Breach does remain uncured upon the expiration of the
Title Breach Cure Period for such Breach.
(e) Buyers acknowledge that any estimates or projections of
future events or results provided by Sellers to Buyers have been
provided in good faith, and Buyers acknowledge that uncertainties are
inherent therein and the failure of such estimates or projections to
prove to be accurate shall not constitute the breach by Sellers of any
representations or warranty of Sellers.
SECTION 10.7 LIMITATIONS ON AMOUNT--BUYER
(a) Buyers will have no liability (for indemnification or
otherwise) with respect to the matters described in clause (a) or
clause (b) of Section 10.4 until the total of all Damages with respect
to such matters exceeds the Threshold Amount; provided, however, that
once the total of all Damages with respect to such matters exceeds the
Threshold Amount, Buyers shall, subject to Section 10.7(b) and Section
10.7(c), be liable for the total of all such Damages, including the
Threshold Amount. Notwithstanding the foregoing, the limitations on
Buyers' liability set forth in this Section 10.7(a) shall not apply to
(i) the matters described in clause (c) of Section 10.4, (ii) any
Breach of any of Buyers' representations and warranties in Section 4.2,
(iii) any Breach of any of Buyers' other representations and warranties
of which any Buyer or any Affiliate of any Buyer had Knowledge at any
time prior to the date on which such other representation and warranty
is made or (iv) any intentional Breach by any Buyer of any covenant or
obligation, and, subject to the limitations of Section 10.7(c) below,
Buyers shall be liable for all Damages with respect to all such matters
without regard to whether or not the Threshold Amount has been
exceeded; provided, however, that, in determining whether the Threshold
Amount has been exceeded for purposes of this Section 10.7(a), all
Damages in respect of the matters described in the preceding clauses
(i) - (iv) shall be included.
(b) Subject to Section 10.7(c) below, Buyers' maximum
aggregate liability for all Damages with respect to the matters
described in clause (a) and clause (b) of Section 10.4 shall not exceed
$15,000,000.
(c) Notwithstanding the provisions of Section 10.7(b) above,
Buyers' maximum aggregate liability for all Damages in respect of (i)
the matters described in clause (c) or clause (d) of Section 10.4, (ii)
any Breach of any of Buyers' representations and warranties in Section
4.2, (iii) any Breach of any of Buyers' other representations and
warranties of which any Buyer or any Affiliate of any Buyer had
Knowledge at any time prior to the date on which such other
representation and warranty is made or (iv) any intentional Breach by
any Buyer of any covenant or obligation shall not exceed the
54
Purchase Price, and Buyers shall be liable for all Damages in respect
of such matters up to such amount.
SECTION 10.8 RIGHT OF SET-OFF
Upon notice to Sellers specifying in reasonable detail the basis for
such set-off, Buyers may set off any amount to which it may be entitled under
this Article 10 against amounts otherwise payable under the Promissory Note. The
exercise of such right of set-off by Buyers in good faith, whether or not
ultimately determined to be justified, will not constitute an event of default
under the Promissory Note. Any indemnification obligations of Sellers pursuant
to this Agreement shall be satisfied first by offset against the Promissory Note
pursuant to this Section 10.8, and only when no principal or interest remain
outstanding under the Promissory Note (whether as a result of offsets pursuant
to this Section 10.8, payment of the Promissory Note or a combination of offset
and payment) shall Buyers seek payment of such indemnification obligations from
Sellers. Buyers shall be entitled, at Buyers' option, to require Sellers to pay
such indemnification directly to Buyers or to a third party in satisfaction of
such indemnity. Neither the exercise of nor the failure to exercise such right
of set-off or to give a notice of a Claim will constitute an election of
remedies or limit Buyers in any manner in the enforcement of any other remedies
that may be available to it.
SECTION 10.9 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under
Section 10.2, Section 10.4, or (to the extent provided in the last
sentence of Section 10.3) Section 10.3 of notice of the commencement of
any Proceeding against it, such indemnified party will, if a claim is
to be made against an indemnifying party under such Section, give
notice to the indemnifying party of the commencement of such claim, but
the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates
that the defense of such action is materially prejudiced by the
indemnifying party's failure to give such notice.
(b) If any Proceeding referred to in Section 10.9(a) is
brought against an indemnified party and it gives notice to the
indemnifying party of the commencement of such Proceeding, the
indemnifying party will be entitled to participate in such Proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is
also a party to such Proceeding and the indemnified party determines in
good faith that joint representation would be inappropriate, or (ii)
the indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such Proceeding
and provide indemnification with respect to such Proceeding), to assume
the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently
conducts such defense, be liable to the indemnified party under this
Article 10 for any fees of other counsel or any other expenses with
respect to the defense of such Proceeding, in each case subsequently
incurred by the indemnified party in connection with the defense of
such Proceeding, other than reasonable costs of investigation. In all
events, Sellers shall
55
be entitled to participate in any Proceeding in respect of a claim that
involves Taxes that relate to any period prior to the Closing. If the
indemnifying party assumes the defense of a Proceeding: (A) it will be
conclusively established for purposes of this Agreement that the claims
made in that Proceeding are within the scope of and subject to
indemnification; (B) no compromise or settlement of such claims may be
effected by the indemnifying party without the indemnified party's
consent unless (1) there is no finding or admission of any violation of
Legal Requirements or any violation of the rights of any Person and no
effect on any other claims that may be made against the indemnified
party, and (2) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (C) the indemnified party
will have no liability with respect to any compromise or settlement of
such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any Proceeding and the
indemnifying party does not, within ten days after the indemnified
party's notice is given, give notice to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying
party will be bound by any determination made in such Proceeding or any
compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
(d) Sellers hereby consent to the non-exclusive jurisdiction
of any court in which a Proceeding is brought against any Indemnified
Person for purposes of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding or the matters
alleged therein, and agree that process may be served on Sellers with
respect to such a claim anywhere in the world.
SECTION 10.10 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
Subject to Section 11.5 below, a claim for indemnification for any
matter not involving a third-party claim may be asserted by notice to the party
from whom indemnification is sought.
SECTION 10.11 DUTY TO MITIGATE DAMAGES
Each Person entitled to indemnification pursuant to this Article 10
shall be obligated in connection with any claim for indemnification under this
Article 10 to use all commercially reasonable efforts to mitigate Damages upon
and after such Person first concludes that Damages for which such Person is
entitled to indemnity under this Article 10 could arise from an event of which
such Person has knowledge.
56
ARTICLE 11
GENERAL PROVISIONS
SECTION 11.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. Seller will pay all amount payable to finder or
investment banker in connection with this Agreement and the Contemplated
Transactions. Buyers will pay the HSR Act filing fee and Canadian Legal
Requirements and Sellers will pay any filing fee required under the correlative
Colombian, Venezuelan and Ecuadorian Legal Requirements. Sellers will cause the
Acquired Companies not to incur any out-of-pocket expenses in connection with
this Agreement. In the event of termination of this Agreement, the obligation of
each party to pay its own expenses will be subject to any rights of such party
arising from a breach of this Agreement by another party.
SECTION 11.2 SALES AND TRANSFER TAXES
All transfer, sales, use, documentary transfer, value added, stamp or
excise Taxes or other similar Taxes of any type payable in connection with the
sale and transfer of the Shares or in connection with the indirect transfer of
the assets of each Acquired Company effected thereby or otherwise in connection
with the consummation of the transactions contemplated by this Agreement and the
other Closing Documents shall be borne by Sellers if and to the extent such
Taxes are imposed or payable in Colombia, Venezuela or Ecuador, and by Buyers if
and to the extent such Taxes are imposed or payable in the United States. In the
event that such Taxes are imposed by or payable in any other country or taxing
jurisdiction, such Taxes shall be borne 50% by Sellers and 50% by Buyers.
SECTION 11.3 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyers determine. Unless consented to by Buyers in
advance or required by Legal Requirements, prior to the Closing Sellers shall,
and shall cause the Acquired Companies to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
Sellers and Buyers will consult with each other concerning the means by which
the Acquired Companies' employees, customers, and suppliers and others having
dealings with the Acquired Companies will be informed of the Contemplated
Transactions, and Buyers will have the right to be present for any such
communication.
SECTION 11.4 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date, Buyers and
Sellers will maintain in confidence, and will cause their respective directors,
officers, employees, agents, and advisors of Sellers' Affiliates, Buyers,
Sellers and the Acquired Companies to maintain in
57
confidence, and not use to the detriment of another party or an Acquired Company
any written, oral, or other information obtained in confidence from another
party or an Acquired Company in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.
SECTION 11.5 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers:
Mortonbay S.A. and Piament Holdings S.A.
c/o Inverlink S.A.
XXX 0 #00-00, Xxxxx X, Xxxxxxx 0000
A.A. 91168
Bogota D.C., Colombia
Facsimile No.: (000) 000-0000
with a copy to:
Isicoff, Xxxxxx & Xxxxxxxxxxx, X.X.
Attention: Xxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000-Xxxxx
Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Buyers:
Maverick Tube International Holdings, Inc.
Attention: Xxxxx X. Xxxxxxx
c/o
Maverick Tube Corporation
00000 Xxxxxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
58
and
Maverick GP LLC
Attention: Xxxxx X. Xxxxxxx
c/o
Maverick Tube Corporation
00000 Xxxxxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
and
Maverick Investment LLC
Attention: Xxxxx X. Xxxxxxx
c/o
Maverick Tube Corporation
00000 Xxxxxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx LLP
Attention: G. Xxxxxxx X'Xxxxx and J. Xxxxxx Xxxxxx, Xx.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000.
SECTION 11.6 ARBITRATION; JURISDICTION; SERVICE OF PROCESS
(a) ANY DISPUTE ARISING UNDER THIS AGREEMENT (OTHER THAN A
DISPUTE IN CONNECTION WITH ANY OF THE NONCOMPETITION AGREEMENTS) SHALL
BE RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE TERMS OF THE
ARBITRATION PROVISIONS CONTAINED IN EXHIBIT 11.6(a) HERETO, AND ANY
PARTY TO THIS AGREEMENT MAY, BY SUMMARY PROCEEDINGS (E.G., A PLEA IN
ABATEMENT OR MOTION TO STAY FURTHER PROCEEDINGS), BRING AN ACTION IN
COURT TO COMPEL ARBITRATION OF ANY DISPUTE, PROVIDED THAT NOTHING
HEREIN SHALL PREVENT ANY PARTY FROM SEEKING INJUNCTIVE RELIEF IN COURT
TO PRESERVE THE STATUS QUO OR TO COMPEL SPECIFIC PERFORMANCE OF A
PARTY'S OBLIGATIONS HEREUNDER. ANY PARTY WHO FAILS OR REFUSES TO SUBMIT
TO BINDING ARBITRATION REQUIRED HEREUNDER FOLLOWING A LAWFUL DEMAND BY
ANY OTHER PARTY SHALL BEAR ALL COSTS AND EXPENSES INCURRED BY SUCH
OTHER PARTY IN COMPELLING SUCH ARBITRATION.
(b) SUBJECT TO THE PROVISIONS OF SECTION 11.6(a), THE PARTIES
HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA AND OF ANY FLORIDA
STATE COURT SITTING IN MIAMI-DADE
59
COUNTY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY HERETO WAIVES ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM, AND IRREVOCABLY APPOINTS CT CORPORATION (THE
"PROCESS AGENT") WITH AN OFFICE ON THE DATE HEREOF AT 0000 XXXXX XXXX
XXXXXX XXXX, XXXXXXXXXX, XXXXXXX 00000, AS ITS AGENT TO RECEIVE, ON
BEHALF OF ITSELF AND ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND
COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING. IF FOR ANY REASON SUCH PROCESS AGENT SHALL CEASE
TO BE AVAILABLE TO ACT AS SUCH, EACH PARTY AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN MIAMI, FLORIDA ON THE TERMS AND FOR
THE PURPOSES OF THIS SECTION 11.6(b). SUCH SERVICE MAY BE MADE BY
MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE APPLICABLE PARTY,
IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND
EACH PARTY HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT
TO ACCEPT SUCH SERVICE ON ITS BEHALF. EACH PARTY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY
AT ITS ADDRESS SET FORTH ABOVE (OR SUCH OTHER ADDRESS AS SUCH PARTY MAY
SPECIFY BY WRITTEN NOTICE DELIVERED TO THE OTHER PARTY), SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(c) EACH PARTY HERETO AGREES THAT THE FINAL ARBITRAL AWARD OR
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.
(d) EACH PARTY HERETO AGREES THAT THE ARBITRATOR OR COURT MAY
AWARD ATTORNEY FEES AND COSTS TO THE PREVAILING PARTY IN ANY SUCH
PROCEEDING.
SECTION 11.7 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
60
SECTION 11.8 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
SECTION 11.9 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter (including the Letter of Intent between Buyers and
Sellers dated May 13, 2005) and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
SECTION 11.10 DISCLOSURE LETTER
All Schedules and Exhibits attached hereto and referred to herein are
hereby incorporated herein and made a part of this Agreement for all purposes as
if fully set forth herein. Disclosures included in the Disclosure Letter and any
other Schedule to this Agreement shall be considered to be made for purposes of
all schedules to this Agreement. Inclusion of any matter or item in any Schedule
to this Agreement does not imply that such matter or item would, under the
provisions of this Agreement, have to be included in any schedule to this
Agreement or that such matter or term is otherwise material. In addition,
matters disclosed in any Schedule, including but not limited to the Disclosure
Letter, to this Agreement are not necessarily limited to matters required by
this Agreement to be disclosed in such Schedules, and any such additional
matters are set forth for informational purposes only and do not necessarily
include other matters of a similar nature.
SECTION 11.11 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties, except that Buyers may assign any of
their rights under this Agreement to any Subsidiary of Maverick Tube; provided,
however, no such assignment shall release Buyers from their obligations under
this Agreement. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be
61
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and permitted assigns.
SECTION 11.12 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
SECTION 11.13 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms. This
Agreement shall be construed as a whole and in accordance with its fair meaning
and without regard to any presumption or other rule requiring construction
against the party preparing this Agreement or any part hereof.
SECTION 11.14 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
SECTION 11.15 GOVERNING LAW
This Agreement will be governed by the laws of the State of
Delaware
without regard to any conflicts of laws principles.
SECTION 11.16 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
Delivery of a copy of this Agreement bearing an original signature by facsimile
transmission or by electronic mail in "portable document format" form shall have
the same effect as physical delivery of the paper document bearing the original
signature.
(SIGNATURE PAGES FOLLOW)
62
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
SELLERS:
MORTONBAY S.A.,
a Panama sociedad de responsibilidad limitada
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
PIAMENT HOLDINGS S.A.,
a Panama sociedad de responsibilidad limitada
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
BUYERS:
MAVERICK TUBE INTERNATIONAL HOLDINGS, INC.,
a
Delaware corporation
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
MAVERICK GP LLC,
a
Delaware limited liability company
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
(SIGNATURES CONTINUED ON FOLLOWING PAGE)
63
MAVERICK INVESTMENT LLC,
a
Delaware limited liability company
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
--------------------------------------------------------------------------------
EXECUTION COPY
(JPMORGAN CHASE BANK LOGO)
CREDIT AGREEMENT
DATED AS OF
MAY 27, 2005
AMONG
MAVERICK TUBE CORPORATION
AND CERTAIN OF ITS SUBSIDIARIES
AS THE US BORROWERS
AND
CERTAIN OF ITS SUBSIDIARIES
AS THE CANADIAN BORROWERS
AND
JPMORGAN CHASE BANK, N.A. INDIVIDUALLY AND
AS AN ISSUING BANK AND AS THE ADMINISTRATIVE AGENT,
AND
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH
INDIVIDUALLY AND AS AN ISSUING BANK AND AS THE CANADIAN ADMINISTRATIVE AGENT,
AND
FINANCIAL INSTITUTIONS,
NOW OR HEREAFTER PARTIES HERETO
AS THE LENDERS
DOMESTIC REVOLVING CREDIT FACILITY
MULTI-CURRENCY CANADIAN REVOLVING CREDIT FACILITY
X.X. XXXXXX SECURITIES INC.
SOLE BOOKRUNNER AND SOLE LEAD ARRANGER
TABLE OF CONTENTS
Page No.
--------
ARTICLE 1
DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions.....................................................................................1
Section 1.2 Additional Definitions.........................................................................34
Section 1.3 Other Definitional Terms.......................................................................34
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 Loans and Commitments..........................................................................35
Section 2.2 Borrowing Requests.............................................................................36
Section 2.3 Letters of Credit..............................................................................37
Section 2.4 Disbursement of Funds..........................................................................42
Section 2.5 Interest.......................................................................................43
Section 2.6 Bankers' Acceptances...........................................................................44
Section 2.7 Repayment of Loans.............................................................................46
Section 2.8 Voluntary Termination or Reduction of Revolving Credit Commitments.............................48
Section 2.9 Mandatory Prepayments; Voluntary Prepayments; Order of Application.............................49
Section 2.10 Continuation and Conversion Options............................................................52
Section 2.11 Fees...........................................................................................54
Section 2.12 Payments, etc..................................................................................55
Section 2.13 Interest Rate Not Ascertainable, etc...........................................................56
Section 2.14 Illegality.....................................................................................56
Section 2.15 Increased Costs................................................................................57
Section 2.16 Change of Lending Office.......................................................................59
Section 2.17 Funding Losses.................................................................................59
Section 2.18 Sharing of Payments, etc.......................................................................59
Section 2.19 Taxes..........................................................................................60
Section 2.20 Pro Rata Treatment.............................................................................61
Section 2.21 Replacement of Lenders.........................................................................62
Section 2.22 Advances of Revolving Credit Loans to Satisfy Lender Indebtedness..............................62
Section 2.23 Joint and Several Liability of US Borrowers; Rights of Contribution among US Borrowers.........63
Section 2.24 Participations in US Swingline Loans...........................................................64
Section 2.25 Increase of Commitments........................................................................64
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 Closing........................................................................................66
Section 3.2 Conditions Precedent to All Loans and Letters of Credit........................................69
ARTICLE 4
SECURITY
Section 4.1 Security Granted by US Credit Parties..........................................................70
Section 4.2 Security Granted by Canadian Credit Parties....................................................70
Section 4.3 Establishment of US Lockbox....................................................................70
Section 4.4 Establishment of Canadian Lockbox..............................................................71
Section 4.5 Establishment of US Blocked Account............................................................71
Section 4.6 Establishment of Canadian Blocked Account......................................................71
Section 4.7 Application of Proceeds of US Blocked Account..................................................71
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Page No.
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Section 4.8 Application of Proceeds of Canadian Blocked Account............................................72
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.1 Organizational Existence.......................................................................72
Section 5.2 Organizational Power and Authorization.........................................................72
Section 5.3 Binding Obligations............................................................................72
Section 5.4 No Legal Bar or Resultant Lien.................................................................72
Section 5.5 No Consent.....................................................................................73
Section 5.6 Financial Information..........................................................................73
Section 5.7 Litigation.....................................................................................73
Section 5.8 Use of Proceeds................................................................................74
Section 5.9 US Employee Benefits...........................................................................74
Section 5.10 Canadian Employee Benefits.....................................................................75
Section 5.11 Taxes; Governmental Charges....................................................................75
Section 5.12 Titles, etc....................................................................................75
Section 5.13 Defaults.......................................................................................76
Section 5.14 Casualties; Taking of Properties...............................................................76
Section 5.15 Compliance with the Law........................................................................76
Section 5.16 No Material Misstatements......................................................................76
Section 5.17 Investment Company Act.........................................................................76
Section 5.18 Public Utility Holding Company Act.............................................................76
Section 5.19 Capital Structure..............................................................................76
Section 5.20 Insurance......................................................................................77
Section 5.21 Environmental Matters..........................................................................77
Section 5.22 Solvency.......................................................................................78
Section 5.23 Employee Matters...............................................................................78
Section 5.24 Real Property..................................................................................78
Section 5.25 Perfection Certificate; Schedules to other Financing Documents................................78
Section 5.26 Existing Indebtedness..........................................................................78
Section 5.27 Target Purchase Documents......................................................................79
ARTICLE 6
AFFIRMATIVE COVENANTS
Section 6.1 Maintenance and Compliance, etc................................................................79
Section 6.2 Payment of Taxes and Claims, etc...............................................................79
Section 6.3 Further Assurances.............................................................................79
Section 6.4 Performance of Obligations.....................................................................80
Section 6.5 Insurance......................................................................................80
Section 6.6 Accounts and Records...........................................................................80
Section 6.7 Right of Inspection............................................................................80
Section 6.8 Operation and Maintenance of Property..........................................................80
Section 6.9 New Subsidiaries; Additional Liens.............................................................80
Section 6.10 Reporting Covenants............................................................................81
ARTICLE 7
NEGATIVE COVENANTS
Section 7.1 Financial Covenants............................................................................85
Section 7.2 Indebtedness...................................................................................85
Section 7.3 Liens..........................................................................................86
Section 7.4 Mergers, Consolidations, etc...................................................................87
Section 7.5 Asset Dispositions.............................................................................87
ii
Page No.
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Section 7.6 Restricted Payments............................................................................88
Section 7.7 Investments, Loans, etc........................................................................88
Section 7.8 Sales and Leasebacks...........................................................................89
Section 7.9 Nature of Business.............................................................................90
Section 7.10 ERISA Compliance...............................................................................90
Section 7.11 Canadian Plan Compliance.......................................................................91
Section 7.12 Negative Pledge Agreements.....................................................................91
Section 7.13 Transactions with Affiliates...................................................................92
Section 7.14 Equity.........................................................................................92
Section 7.15 Capital Expenditures...........................................................................92
Section 7.16 Restriction on Intercompany Transactions.......................................................92
Section 7.17 Acquisitions...................................................................................92
Section 7.18 Fiscal Year....................................................................................93
Section 7.19 Exchange Notes.................................................................................93
ARTICLE 8
EVENTS OF DEFAULT
Section 8.1 Payments.......................................................................................93
Section 8.2 Covenants Without Notice.......................................................................93
Section 8.3 Other Covenants................................................................................93
Section 8.4 Other Financing Document Obligations...........................................................94
Section 8.5 Representations................................................................................94
Section 8.6 Non-Payments of Other Indebtedness.............................................................94
Section 8.7 Defaults Under Other Agreements................................................................94
Section 8.8 Bankruptcy Under US Law........................................................................94
Section 8.9 Bankruptcy Under Canadian Law..................................................................94
Section 8.10 Money Judgment.................................................................................95
Section 8.11 Discontinuance of Business.....................................................................95
Section 8.12 Financing Documents............................................................................96
Section 8.13 Change of Control..............................................................................96
ARTICLE 9
THE AGENTS
Section 9.1 Appointment of Agents..........................................................................96
Section 9.2 Rights and Powers..............................................................................96
Section 9.3 Limitation of Duties of Agents.................................................................97
Section 9.4 Reliance by Agents.............................................................................97
Section 9.5 Delegation of Duties; Sub Agents...............................................................97
Section 9.6 Resignation; Successor Agent...................................................................97
Section 9.7 Lack of Reliance on Agents.....................................................................98
Section 9.8 Reports........................................................................................98
ARTICLE 10
MISCELLANEOUS
Section 10.1 Notices........................................................................................98
Section 10.2 Amendments and Waivers.........................................................................99
Section 10.3 No Waiver; Remedies Cumulative................................................................100
Section 10.4 Payment of Expenses, Indemnities, etc.........................................................100
Section 10.5 Right of Setoff...............................................................................102
Section 10.6 Benefit of Agreement..........................................................................103
Section 10.7 Successors and Assigns; Participations and Assignments........................................103
Section 10.8 Governing Law; Submission to Jurisdiction; etc................................................105
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Page No.
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Section 10.9 Independent Nature of Lenders' Rights.........................................................107
Section 10.10 Invalidity....................................................................................107
Section 10.11 Renewal, Extension or Rearrangement...........................................................107
Section 10.12 Confidentiality...............................................................................107
Section 10.13 Interest......................................................................................108
Section 10.14 Entire Agreement..............................................................................109
Section 10.15 Attachments...................................................................................109
Section 10.16 Counterparts..................................................................................109
Section 10.17 Survival of Indemnities.......................................................................109
Section 10.18 Headings Descriptive..........................................................................109
Section 10.19 Satisfaction Requirement......................................................................109
Section 10.20 Exculpation Provisions........................................................................109
Section 10.22 No Financial Assistance by Canadian Credit Parties............................................110
Section 10.23 Missouri Law Provision........................................................................110
SCHEDULES
Schedule 5.9 US Employee Benefits Disclosures
Schedule 5.15 Compliance with Laws
Schedule 5.19 Capital Structure
Schedule 5.20 Insurance
Schedule 5.21 Environmental Matters
Schedule 5.23 Employee Matters
Schedule 5.24 Real Property Locations
Schedule 5.26 Indebtedness
Schedule 7.2 Permitted Indebtedness
Schedule 7.3 Permitted Liens
Schedule 7.7 Permitted Investments
Schedule 7.9 Nature of Business
Schedule 7.12 Negative Pledge Agreements
Schedule 7.16 Restriction on Intercompany Transactions
EXHIBITS
Exhibit A Form of Assignment and Assumption
Exhibit B-1 Form of US Borrowing Base Report
Exhibit B-2 Form of Canadian Borrowing Base Report
Exhibit C-1 Form of Borrowing Request (US Revolving Credit Loan)
Exhibit C-2 Form of Borrowing Request (Canadian Revolving Credit Loans)
Exhibit C-3 Form of Request for US Letters of Credit
Exhibit C-4 Form of Request for Canadian Letters of Credit
Exhibit C-5 Form of Borrowing Request (US Swingline Loans)
Exhibit D-1 Form of Canadian Real Estate Mortgage
Exhibit D-2 Form of Canadian Assignment of Leases and Rents
Exhibit E Form of Canadian Security Agreement
Exhibit F Form of Commitment Increase Agreement
Exhibit G Form of Guaranty and Security Agreement
Exhibit H Form of New Lender Agreement
Exhibit I Form of Perfection Certificate Update
Exhibit J Form of US Real Estate Mortgage
Exhibit K Form of B/A Equivalent Note
Exhibit L Form of Borrower Joinder Agreement
iv
Exhibit M Form of Compliance Certificate
Exhibit N-1 Form of Interim Account Report (US Borrowers)
Exhibit N-2 Form of Interim Account Report (Canadian Borrowers)
Exhibit O-1 Form of Inventory Designation Report (US Borrowers)
Exhibit O-2 Form of Inventory Designation Report (Canadian Borrowers)
v
LIST OF DEFINED TERMS
Page No.
--------
$................................................................................................................13
ABR...............................................................................................................1
Acceptance Fee....................................................................................................2
Account Party.................................................................................................2, 40
Activation Notice (Canadian)......................................................................................2
Activation Notice (US)............................................................................................2
Activation Period.................................................................................................2
Adjusted Interest Expense.........................................................................................2
Adjusted LIBO Rate................................................................................................2
Administrative Agent..............................................................................................2
Advance Notice....................................................................................................2
Affiliate.........................................................................................................3
Agent.............................................................................................................3
Agents............................................................................................................3
Aggregate Canadian Revolving Credit Exposure......................................................................3
Aggregate Revolving Credit Exposure...............................................................................3
Aggregate US Revolving Credit Exposure............................................................................3
Agreement......................................................................................................1, 3
Alternate Base Rate...............................................................................................3
Amended and Restated Guaranty and Security Agreement.............................................................21
applicable law..................................................................................................114
Applicable Percentage.............................................................................................3
Applicable Rate...................................................................................................4
Application.......................................................................................................4
Approved Fund................................................................................................4, 109
Assignment and Assumption.........................................................................................4
Availability Reserves.............................................................................................4
Average Collateral Availability...................................................................................5
B/A...............................................................................................................5
B/A Cover.........................................................................................................5
B/A Equivalent Note...........................................................................................5, 47
B/A Loan..........................................................................................................5
Bailee............................................................................................................5
Bailee Letter.....................................................................................................5
Bankruptcy Code...............................................................................................5, 99
Base Value........................................................................................................5
Beneficially Own.................................................................................................11
Blocked Account...................................................................................................5
Board.............................................................................................................6
Borrower.......................................................................................................1, 6
Borrower Joinder Agreement.......................................................................................84
Borrowers......................................................................................................1, 6
Borrowing.........................................................................................................6
Borrowing Base Report.............................................................................................6
Borrowing Request.................................................................................................6
Business Day......................................................................................................6
C$................................................................................................................6
C$ Denominated Loan...............................................................................................6
vi
Page No.
--------
C&P............................................................................................................1, 6
Canadian Administrative Agent.....................................................................................6
Canadian Administrative Agent Overline...........................................................................50
Canadian Blocked Account..........................................................................................6
Canadian Blocked Account Agreement................................................................................7
Canadian Borrower.................................................................................................1
Canadian Borrowers................................................................................................7
Canadian Borrowing Base...........................................................................................7
Canadian Credit Party.............................................................................................7
Canadian Employee Funding Liability Reserve.......................................................................7
Canadian Excess Availability......................................................................................7
Canadian Fixed Asset Component....................................................................................8
Canadian Fixed Asset Reduction Amount.............................................................................8
Canadian Funding Amount.......................................................................................8, 39
Canadian Lender...................................................................................................8
Canadian Lender Indebtedness......................................................................................8
Canadian Letter of Credit.........................................................................................8
Canadian Letter of Credit Liabilities.............................................................................8
Canadian Letters of Credit....................................................................................8, 39
Canadian Loans....................................................................................................8
Canadian Lockbox..................................................................................................8
Canadian Lockbox Accounts.........................................................................................9
Canadian Lockbox Bank.............................................................................................9
Canadian Maximum Available Amount.................................................................................9
Canadian Overadvance..............................................................................................9
Canadian Overadvances............................................................................................52
Canadian Prime Rate...............................................................................................9
Canadian Prime Rate Loans.........................................................................................9
Canadian Priority Claims Reserve..................................................................................9
Canadian Real Estate Mortgage.....................................................................................9
Canadian Revolving Credit Commitment..........................................................................9, 37
Canadian Revolving Credit Commitments............................................................................37
Canadian Revolving Credit Exposure................................................................................9
Canadian Revolving Credit Loan...............................................................................10, 37
Canadian Revolving Credit Percentage.............................................................................10
Canadian Security Agreement......................................................................................10
Capital Expenditures.............................................................................................10
Capital Lease Obligations........................................................................................10
Cash Management Affiliate........................................................................................10
Cash Management Agreement........................................................................................10
Cash Management Reserves.........................................................................................10
CDOR Rate........................................................................................................10
CERCLA...........................................................................................................18
Change of Control................................................................................................11
Closing Date.....................................................................................................11
Closing Transactions.............................................................................................11
Code.............................................................................................................11
Collateral.......................................................................................................11
Collateral Availability..........................................................................................11
Combined Revolving Credit Commitment.............................................................................12
Commitment.......................................................................................................12
vii
Page No.
--------
Commitment Increase Agreement....................................................................................12
Commitment Increase Notice.......................................................................................67
Commitments......................................................................................................12
Company.......................................................................................................1, 12
Contract Period..................................................................................................12
Control..........................................................................................................12
Controlled.......................................................................................................12
Controlling......................................................................................................12
Credit Parties...................................................................................................12
Credit Party.....................................................................................................12
Current Information..............................................................................................12
Dated Assets.................................................................................................12, 66
Dated Liabilities............................................................................................12, 66
Default..........................................................................................................12
Dilution.........................................................................................................13
Dilution Percentage..............................................................................................13
Disbursement Account.........................................................................................13, 44
Discount Proceeds................................................................................................13
Discount Rate....................................................................................................13
disposal.........................................................................................................18
disposed.........................................................................................................18
Documentary Letter of Credit.....................................................................................13
Dollar...........................................................................................................13
Dollar Denominated Loans.........................................................................................13
Dollar Equivalent................................................................................................13
EBITDA...........................................................................................................13
Eligible Account.................................................................................................14
Eligible Account Advance Percentage..............................................................................16
Eligible Xxxx and Hold Accounts..................................................................................16
Eligible Equipment...............................................................................................16
Eligible Included-In-Transit Inventory...........................................................................16
Eligible Inventory...............................................................................................16
Eligible Real Property...........................................................................................17
Environmental Laws...............................................................................................18
Equity...........................................................................................................19
ERISA............................................................................................................19
ERISA Affiliate..................................................................................................19
ERISA Termination Event..........................................................................................19
Eurodollar.......................................................................................................19
Event of Default.............................................................................................19, 98
Excess Availability..............................................................................................19
Exchange Note Documents..........................................................................................19
Exchange Notes...................................................................................................19
Exchange Notes Indenture.........................................................................................19
Exchangeco....................................................................................................1, 19
Excluded Taxes...................................................................................................20
Existing Credit Agreement........................................................................................20
Existing Indebtedness............................................................................................20
Federal Funds Effective Rate.....................................................................................20
Fee Letter.......................................................................................................20
Financial Statements.............................................................................................20
viii
Page No.
--------
Financing Documents..............................................................................................20
Financing Parties...............................................................................................114
Fiscal Quarter...................................................................................................21
Fiscal Year......................................................................................................21
Fixed Charge Coverage Ratio......................................................................................21
Foreign Lender...................................................................................................21
Funded Indebtedness..............................................................................................21
GAAP.............................................................................................................21
Governmental Authority...........................................................................................21
Governmental Requirement.........................................................................................21
Group............................................................................................................11
hazardous substance..............................................................................................18
Highest Lawful Rate..............................................................................................21
Holding.......................................................................................................1, 22
Included-In-Transit Inventory....................................................................................22
Indebtedness.....................................................................................................22
Indemnified Taxes................................................................................................23
Information.....................................................................................................113
Interest Expense.................................................................................................23
Interest Payment Date............................................................................................23
Interest Period..................................................................................................23
International Holdings........................................................................................1, 23
Inventory Advance Percentage.....................................................................................23
Investment....................................................................................................1, 23
Issuing Bank.....................................................................................................23
JPMorgan.........................................................................................................23
JPMorgan Canada..................................................................................................24
Judgment Conversion Date........................................................................................112
Judgment Currency...............................................................................................112
L/C Cover........................................................................................................24
Landlord Consent and Subordination Agreement.....................................................................24
Landlord Waiver Agreement........................................................................................24
laws applicable to any Financing Party..........................................................................114
Lender........................................................................................................1, 24
Lender Indebtedness..............................................................................................24
Lenders.......................................................................................................1, 24
Lending Office...................................................................................................24
Letter of Credit.................................................................................................25
Letter of Credit Liabilities.....................................................................................25
Letters of Credit................................................................................................25
LIBO Rate........................................................................................................25
Lien.............................................................................................................25
Loan.............................................................................................................25
Loans............................................................................................................25
Lockbox..........................................................................................................25
Lockbox Agreement................................................................................................25
losses...........................................................................................................61
Margin Stock.....................................................................................................26
Material Adverse Effect..........................................................................................26
Maturity Date....................................................................................................25
Maverick GP LLC...................................................................................................1
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Page No.
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Maverick International...........................................................................................26
Mortgaged Real Property..........................................................................................26
Net Orderly Liquidation Value....................................................................................26
Net Proceeds.....................................................................................................26
New Lender...................................................................................................26, 68
New Lender Agreement.............................................................................................26
New Subsidiary...............................................................................................26, 84
Non Financed Capital Expenditures................................................................................27
Obligated Party..................................................................................................27
Obligation Currency.............................................................................................112
oil..............................................................................................................18
OPA..............................................................................................................18
Other Taxes......................................................................................................27
Participant.....................................................................................................110
Payment Office...................................................................................................27
PBGC.............................................................................................................27
Perfection Certificate...........................................................................................27
Perfection Certificate Update....................................................................................27
Permitted Borrowing Base Adjustments.............................................................................27
Permitted Liens..............................................................................................27, 90
Person...........................................................................................................28
Plan.............................................................................................................28
Precision.....................................................................................................1, 28
Precision Canada..............................................................................................1, 28
Precision GP LLC..................................................................................................1
Premoca Acquisition..............................................................................................28
Prime Rate.......................................................................................................28
Principal Property...............................................................................................28
Principal Return Payment.....................................................................................28, 98
Processing Reserves..............................................................................................28
Projections......................................................................................................28
Property.........................................................................................................28
Prudential....................................................................................................1, 28
Prudential ULC....................................................................................................1
Quarterly Dates..................................................................................................29
rate of exchange................................................................................................112
RCRA.............................................................................................................18
Real Estate Mortgage.............................................................................................29
Real Property....................................................................................................29
Register....................................................................................................29, 110
Regulation D.....................................................................................................29
Regulations U and X..............................................................................................29
Reimbursement Obligations........................................................................................29
Related Affiliate................................................................................................29
Related Parties..................................................................................................29
Related Person...................................................................................................11
release..........................................................................................................18
Rent Reserve.....................................................................................................29
Report...........................................................................................................29
Required Lenders.................................................................................................29
Responsible Officer..............................................................................................29
x
Page No.
--------
Restricted Payment...............................................................................................30
Revolving Credit Commitments.....................................................................................30
Revolving Credit Exposure........................................................................................30
Revolving Credit Loan............................................................................................30
Revolving Lenders................................................................................................30
Rolling Period...................................................................................................30
Sale-Leaseback Transaction.......................................................................................94
Seac LLC..........................................................................................................1
XxxXXX............................................................................................................1
Secured Affiliate................................................................................................30
Security Instruments.............................................................................................30
Settlement Date..................................................................................................30
solid waste......................................................................................................18
Solvent..........................................................................................................30
Spot Exchange Rate...............................................................................................31
Standby Letter of Credit.........................................................................................31
Statutory Reserve Rate...........................................................................................31
Storage/Handling Reserves........................................................................................31
subject Borrower.................................................................................................65
Subsidiary.......................................................................................................31
Super Majority Lenders...........................................................................................31
Swap Agreement...................................................................................................32
Swap Reserves....................................................................................................32
Target...........................................................................................................32
Target Acquisition...............................................................................................32
Target Financial Statements......................................................................................32
Target Purchase Agreement........................................................................................32
Target Purchase Documents........................................................................................82
Tax Benefit......................................................................................................63
Taxes............................................................................................................32
threatened release...............................................................................................18
Tier I Reduced Availability Period...............................................................................32
Tier II Reduced Availability Period..............................................................................32
Title Commitments................................................................................................71
Transactions.....................................................................................................32
Trigger Threshold................................................................................................32
TTS...............................................................................................................1
Tube..........................................................................................................1, 33
Tube Canada...................................................................................................1, 33
Tube GP...........................................................................................................1
Tube LP...........................................................................................................1
Tube ULC..........................................................................................................1
Type.............................................................................................................33
UCC..............................................................................................................33
UCP..............................................................................................................40
Unrelated Person.................................................................................................11
US Blocked Account...............................................................................................33
US Borrower.......................................................................................................1
US Borrowers..................................................................................................1, 33
US Borrowing Base................................................................................................33
US Credit Party..................................................................................................34
xi
Page No.
--------
US Employee Funding Liability Reserve............................................................................34
US Excess Availability...........................................................................................34
US Fixed Asset Component.........................................................................................34
US Fixed Asset Reduction Amount..................................................................................34
US Funding Amount............................................................................................34, 39
US Lender........................................................................................................34
US Lender Indebtedness...........................................................................................34
US Lenders.......................................................................................................34
US Letter of Credit..............................................................................................35
US Letter of Credit Liabilities..................................................................................35
US Letters of Credit.........................................................................................35, 39
US Loans.........................................................................................................35
US Lockbox.......................................................................................................35
US Lockbox Agreement.............................................................................................35
US Maximum Available Amount......................................................................................35
XX Xxxxxxxxxxxx..............................................................................................00, 00
XX Xxxx Xxxxxx Xxxxxxxx..........................................................................................00
XX Revolving Credit Commitment...............................................................................35, 37
US Revolving Credit Commitments..................................................................................37
US Revolving Credit Exposure.....................................................................................35
US Revolving Credit Loan.....................................................................................35, 37
US Revolving Credit Percentage...................................................................................35
US Revolving Lender..............................................................................................36
US Swingline Availability........................................................................................36
US Swingline Commitment......................................................................................36, 38
US Swingline Exposure............................................................................................36
US Swingline Lender..............................................................................................36
US Swingline Loan................................................................................................37
US Swingline Loans...............................................................................................36
Voting Stock.....................................................................................................36
xii
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is made and entered into as of
the 27th day of May, 2005, among
Maverick Tube Corporation, a Delaware
corporation (the "COMPANY"), Maverick Investment LLC, a Delaware limited
liability company ("INVESTMENT"), Maverick Tube, L.P., a Delaware limited
partnership ("TUBE"), Precision Tube Holding LLC, a Delaware limited liability
company ("HOLDING"), Maverick GP, LLC, a Delaware limited liability company
("MAVERICK GP LLC"), Precision GP, LLC, a Delaware limited liability company
("PRECISION GP LLC"), Precision Tube Technology, L.P., a Texas limited
partnership ("PRECISION"), Maverick C&P, Inc., a Delaware corporation ("C&P"),
SEAC Acquisition LLC, a Delaware limited liability company ("SEAC LLC"), XxxXXX,
X.X., a Texas limited partnership ("XXXXXX"), Tubular Transport Services, Inc.,
a Delaware corporation ("TTS" and collectively with the Company, Investment,
Tube, Holding, Maverick GP LLC, Precision GP LLC, Precision, C&P, Seac LLC and
XxxXXX, the "US BORROWERS" and individually, a "US BORROWER"), Prudential Steel
Ltd., an Alberta corporation ("PRUDENTIAL"), Maverick Exchangeco (Nova Scotia)
ULC, a Nova Scotia unlimited liability company ("EXCHANGECO"), Maverick Tube
(Canada) Inc., an Alberta corporation ("TUBE CANADA"), Precision Tube Canada
Limited, an Alberta corporation ("PRECISION CANADA"), Maverick Tube
International Holdings, Inc., a Delaware corporation ("INTERNATIONAL HOLDINGS"),
Maverick Tube Canada ULC, a Nova Scotia unlimited liability company, ("TUBE
ULC"), Maverick Tube Canada GP, Ltd., an Alberta limited corporation ("TUBE
GP"), Maverick Tube Canada, L.P., an Alberta limited partnership ("TUBE LP") and
Prudential Steel Holdings ULC, a Nova Scotia unlimited liability company
("PRUDENTIAL ULC" and collectively with Prudential, Exchangeco, Tube Canada,
Precision Canada, International Holdings, Tube ULC, Tube GP and Tube LP, the
"Canadian Borrowers" and individually, a "CANADIAN BORROWER") (the US Borrowers
and the Canadian Borrowers are together referred to herein as the "BORROWERS"
and individually, a "BORROWER"), JPMorgan Chase Bank, N.A., individually as a
Lender, and an Issuing Bank and as the Administrative Agent, JPMorgan Chase
Bank, N.A., Toronto Branch, individually as a Lender and as the Canadian
Administrative Agent and as an Issuing Bank, each additional Issuing Bank
hereunder from time to time, and each of the lenders that is a signatory hereto
or which hereafter becomes a party hereto as provided in Sections 2.25 and 10.7
including, without limitation, the US Swingline Lender (as defined below)
(individually, a "LENDER" and, collectively, the "LENDERS").
The Borrowers, the Lenders, the Issuing Banks and the Agents hereby
agree as follows:
ARTICLE 1
DEFINITIONS; CONSTRUCTION
Section 1.1. DEFINITIONS. As used herein, the following terms shall
have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined). Reference to any party in a
Financing Document shall mean that party and its successors and assigns.
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ACCEPTANCE FEE" shall mean a fee payable in C$ by the
Canadian Borrowers to a C$ Lender with respect to the acceptance or purchase of
a B/A by such Canadian Lender, calculated on the face amount of such B/A at a
rate per annum equal to the Applicable Rate with respect to B/A Loans on the
basis of the number of days in the applicable Contract Period (inclusive of the
first day and exclusive of the last day) and a year of 365 days (it being agreed
that the Applicable Rate in respect of a B/A Equivalent Note is equivalent to
the Applicable Rate otherwise applicable to a B/A having the same face amount
and Contract Period as the subject B/A Equivalent Note).
1
"ACCOUNT PARTY" shall have the meaning assigned to such term
in Section 2.3(d)(1).
"ACTIVATION NOTICE (CANADIAN)" shall mean a written notice to
the Canadian Borrowers by the Administrative Agent, which notice may be given at
any time that an Activation Period is in effect, that the Administrative Agent
is activating its right to have all funds on deposit in the Canadian Lockbox
Accounts and the Canadian Blocked Account be subject to the absolute dominion
and control of the Canadian Administrative Agent.
"ACTIVATION NOTICE (US)" shall mean a written notice to the US
Borrowers by the Administrative Agent, which notice may be given at any time
that an Activation Period is in effect, that the Administrative Agent is
activating its right to have all funds on deposit in the US Blocked Account be
subject to the absolute dominion and control of the Administrative Agent.
"ACTIVATION PERIOD" shall mean any period commencing on the
date that either (a) Excess Availability is less than Trigger Threshold or (b) a
Default or an Event of Default occurs, and continuing throughout the term of
this Agreement.
"ADJUSTED INTEREST EXPENSE" shall mean, as to the Credit
Parties on a consolidated basis and for any period, Interest Expense less any
non cash Interest Expense.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" shall mean JPMorgan Chase Bank, N.A.,
acting in the manner and to the extent described in Article 9, and any successor
to JPMorgan Chase Bank, N.A., acting in such manner.
"ADVANCE NOTICE" shall mean written or telecopy notice (with
telephonic confirmation in the case of telecopy notice), which in each case
shall be irrevocable, from the applicable Borrowers to be received by the
Administrative Agent or the Canadian Administrative Agent (with a copy to the
Administrative Agent) in the case of any Borrowing, conversion, continuation or
prepayment of Canadian Loans) before the designated time specified below on the
Business Day in advance of any Borrowing, conversion, continuation or prepayment
of any Loan or Loans pursuant to this Agreement as respectively indicated below:
(a) Eurodollar Loans - 3 Business Days;
(b) ABR Loans - Same Business Day;
(c) Canadian Prime Rate Loans equal to or less
than C$10,000,000 - Same Business Day;
(d) Canadian Prime Rate Loans greater than
C$10,000,000 - One Business Day; and
(e) B/A Loans - One Business Day.
As used herein "designated time" means in the case of any Borrowing, conversion,
continuation or prepayment of (x) Eurodollar Loans, 1:00 p.m., New York City
time, (y) ABR Loans or B/A Loans, 12:00 p.m. New York City time, and (z)
Canadian Prime Rate Loans, 11:00 a.m. New York City time.
2
For the purpose of determining the applicable period of Advance Notice in the
case of the conversion from one Type of Loan into another, the Loans into which
there is to be a conversion shall control. The Administrative Agent, the
Canadian Administrative Agent, each Issuing Bank and each Lender are entitled to
rely upon and act upon telecopy notice made or purportedly made by the
Borrowers, and the Borrowers hereby waive the right to dispute the authenticity
and validity of any such transaction once the Administrative Agent, the Canadian
Administrative Agent or any Lender has advanced funds or any Issuing Bank has
issued Letters of Credit, absent manifest error.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AGENT" shall mean any of the Administrative Agent or the
Canadian Administrative Agent, and "AGENTS" means all such Agents collectively.
"AGGREGATE CANADIAN REVOLVING CREDIT EXPOSURE" shall mean the
sum of all of the Canadian Lenders' Canadian Revolving Credit Exposures.
"AGGREGATE REVOLVING CREDIT EXPOSURE" shall mean the sum of
all of the Revolving Lenders' Revolving Credit Exposures.
"AGGREGATE US REVOLVING CREDIT EXPOSURE" shall mean the sum of
all of the US Lenders' US Revolving Credit Exposures.
"AGREEMENT" shall mean this Credit Agreement, as further
amended, modified or supplemented from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
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%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE PERCENTAGE" shall mean, (a) with respect to any US
Revolving Lender, such US Revolving Lender's US Revolving Credit Percentage, and
(b) with respect to any Canadian Lender, such Canadian Lender's Canadian
Revolving Credit Percentage, as applicable.
"APPLICABLE RATE" shall mean, on any day and with respect to
any Loan or with respect to the commitment fees payable hereunder, the
applicable rate per annum set forth at the appropriate intersection in the table
shown below, based on the Average Collateral Availability for the most recently
ended Fiscal Quarter.
3
ABR LOAN CANADIAN PRIME
AVERAGE COLLATERAL EURODOLLAR LOAN B/A LOAN APPLICABLE RATE LOAN COMMITMENT FEE
AVAILABILITY APPLICABLE RATE APPLICABLE RATE RATE APPLICABLE RATE RATE
------------------ --------------- --------------- ---------- --------------- --------------
Less than or equal to 2.00% 2.00% 0.50% 1.25% 0.375%
$75,000,000
Greater than 1.75% 1.75% 0.25% 1.00% 0.350%
$75,000,000 but less
than or equal to
$125,000,000
Greater than 1.50% 1.50% 0.00% 0.75% 0.300%
$125,000,000 but less
than or equal to
$250,000,000
Greater than 1.25% 1.25% 0.00% 0.75% 0.250%
$250,000,000
Each change in the Applicable Rate shall be effective as of the first day of
each Fiscal Quarter based on the Average Collateral Availability for the
immediately preceding Fiscal Quarter. Notwithstanding the foregoing, for the
period from the Closing Date through September 30, 2005, the Eurodollar Loan
Applicable Rate and B/A Loan Applicable Rate will be 1.50%, the ABR Loan
Applicable Rate shall be 0.00%, the Canadian Prime Rate Loan Applicable Rate
shall be 0.75%, and the commitment fee Applicable Rate shall be 0.300%.
"APPLICATION" shall mean an "Application and Agreement for
Letters of Credit," or similar instruments or agreements, entered into between a
Borrower and an Issuing Bank in connection with any Letter of Credit.
"APPROVED FUND" has the meaning provided in Section 10.7.
"ASSIGNMENT AND ASSUMPTION" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.7), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"AVAILABILITY RESERVES" shall mean, as of any date of
determination, such amounts as the Administrative Agent may from time to time
establish and revise in its sole but reasonable discretion reducing the US
Borrowing Base and/or the Canadian Borrowing Base which would otherwise be
available to the Borrowers under the lending formulas provided for herein: (a)
to reflect general eligibility criteria, events, conditions, contingencies or
risks which, as determined by the Administrative Agent in its reasonable
discretion, do or may affect either (i) any component of the US Borrowing Base
or the Canadian Borrowing Base or their value, (ii) the assets, business or
prospects of any Credit Party, or (iii) the security interests and other rights
of the Administrative Agent and the Canadian Administrative Agent in the
Collateral (including the enforceability, perfection and priority thereof), or
(b) to reflect the Administrative Agent's customary practice or its belief that
any collateral report or financial information furnished by or on behalf of any
Borrower to any Agent or any Lender is or may have been incomplete, inaccurate
or misleading in any material respect, or (c) in respect of any state of facts
which the
4
Administrative Agent determines constitutes a Default or an Event of Default.
Without limiting the foregoing, Availability Reserves shall include the
following in such amounts established by Administrative Agent in its sole but
reasonable discretion: Canadian Priority Claims Reserve (with respect to the
Canadian Borrowing Base only), SWAP Reserves, Cash Management Reserves,
Processing Reserves, Storage and Handling Reserves, Canadian Employee Funding
Liability Reserve (with respect to the Canadian Borrowing Base only), and US
Employee Funding Liability Reserve (with respect to the US Borrowing Base only)
and Rent Reserves.
"AVERAGE COLLATERAL AVAILABILITY" shall mean, for any period,
the daily average Collateral Availability calculated based on the Collateral
Availability at the opening of business on each Business Day in such period.
"B/A" shall mean a non-interest bearing xxxx of exchange
denominated in C$, drawn by the Canadian Borrowers and accepted by a Canadian
Lender in accordance with this Agreement, provided that with respect to a
Canadian Lender that is not a chartered bank under the Bank Act (Canada) or that
has notified the Administrative Agent that it is otherwise unable to accept such
bills of exchange, it shall mean a B/A Equivalent Note.
"B/A COVER" when required by this Agreement for B/A Loans,
shall be effected by paying to the Canadian Administrative Agent, in immediately
available funds, to be collaterally assigned as security pursuant to the
Financing Documents, an amount equal to the aggregate amount of all outstanding
B/A Loans. Such amount shall be retained by the Canadian Administrative Agent
and applied to repay the principal of each B/A Loan upon the maturity thereof
until all such B/A Loans have been fully satisfied.
"B/A EQUIVALENT NOTE" shall have the meaning given such term
in Section 2.6(g) hereto.
"B/A LOAN" shall mean a Borrowing comprised of B/As.
"BAILEE" shall mean any Person who is in possession of any
inventory of any Borrower on behalf of such Borrower.
"BAILEE LETTER" shall mean a letter in form and substance
acceptable to the Administrative Agent executed by any Person who is in
possession of inventory on behalf of any Borrower pursuant to which such Person
acknowledges the Administrative Agent's Lien or the Canadian Administrative
Agent's Lien, as applicable, with respect thereto.
"BANKRUPTCY CODE" shall have the meaning provided in Section
8.8.
"BASE VALUE" shall mean, with respect to Eligible Inventory,
the lower of (a) cost (determined on a first in first out basis and excluding
any component of cost consisting of intercompany profit with respect to Eligible
Inventory acquired from an Affiliate), or (b) market value.
"BLOCKED ACCOUNT" shall mean one or more demand deposit
accounts established by the Canadian Borrowers with the Canadian Administrative
Agent and the US Borrowers with the Administrative Agent which (a) the
applicable Borrowers and the Administrative Agent or the Canadian Administrative
Agent, as applicable, jointly designate as a "Blocked Account," (b) into which
all cash receipts of the applicable Borrowers from whatever source (including,
without limitation, all currency, checks and drafts representing proceeds of the
Collateral and further including any of the foregoing received in a Lockbox)
shall be deposited to the extent required pursuant to Section 4.3 and Section
4.4
5
hereof and pursuant to the Security Documents, and (c) which are subject to the
provisions of Section 4.5 and Section 4.6 hereof.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWER" and "BORROWERS" shall have the meanings set forth
in the initial paragraph hereof.
"BORROWING" shall mean a borrowing pursuant to a Borrowing
Request, a borrowing pursuant to Section 2.2(c) or Section 2.2(d) or a
continuation or a conversion pursuant to Section 2.10 consisting, in each case,
of the same Type of Loans having, in the case of Eurodollar Loans or B/A Loans,
the same Interest Period or Contract Period (except as otherwise provided in
Section 2.13 and Section 2.14) and made previously or being made concurrently by
all of the Lenders.
"BORROWING BASE REPORT" shall mean the report of each of the
US Borrowers and the Canadian Borrowers concerning the amount of the US
Borrowing Base or the Canadian Borrowing Base, as applicable, to be delivered
pursuant to Section 6.10, substantially in the form attached as Exhibit B-1 or
B-2 (depending on which Borrowing Base is being computed).
"BORROWING REQUEST" shall mean a request for a Borrowing
pursuant to Section 2.2, substantially in the form attached as Xxxxxxxx X-0,
X-0, X-0, X-0 or C-5 hereof (depending on the type of Loan with respect to which
such Borrowing Request is being submitted).
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday
and any other day on which commercial banks are required or authorized to remain
closed in New York, New York; provided, that (a) 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 and, (b) when used in connection with Canadian Revolving Credit Loans,
including B/A Loans, or the Dollar Equivalent of any amount denominated in C$,
"Business Day" shall also exclude any other day on which banks are required or
authorized to close in Xxxxxxx, Xxxxxxx, Xxxxxx.
"C&P" shall have the meaning set forth in the initial
paragraph hereto.
"C$" shall mean lawful money of Canada.
"C$ DENOMINATED LOAN" shall mean Canadian Revolving Credit
Loans which are denominated in C$.
"CANADIAN ADMINISTRATIVE AGENT" shall mean JPMorgan Canada,
acting in the manner and to the extent described in Article 9 and any successor
to JPMorgan Canada acting in such capacity.
"CANADIAN BLOCKED ACCOUNT" means a Blocked Account established
by the Canadian Borrowers with the Canadian Administrative Agent.
"CANADIAN BLOCKED ACCOUNT AGREEMENT" means a Blocked Account
Agreement to be entered into between Canadian Lockbox Bank, Canadian
Administrative Agent and each Canadian Borrower in a form approved by Canadian
Administrative Agent.
"CANADIAN BORROWERS" shall have the meaning set forth in the
initial paragraph hereof.
6
"CANADIAN BORROWING BASE" shall mean, only with respect to the
Canadian Borrowers, the amount equal to the sum of:
(a) the Eligible Account Advance Percentage of the Canadian
Borrowers' Eligible Accounts, plus
(b) the lesser of (i) 85% of the Net Orderly Liquidation Value
of the Canadian Borrowers' Eligible Inventory, or (ii) the Inventory Advance
Percentage of the Base Value of the Canadian Borrower's Eligible Inventory, plus
(c) the Canadian Fixed Asset Component in effect as of the
date for which the Canadian Borrowing Base is being calculated (provided that
the Canadian Fixed Asset Component shall not, at any time, constitute more than
twenty-five percent (25%) of the Canadian Borrowing Base); minus
(d) Availability Reserves established with respect to the
Canadian Borrowing Base;
The Canadian Borrowing Base in effect under this Agreement at any time shall be
the Canadian Borrowing Base reflected on the most recent Canadian Borrowing Base
Report delivered to the Administrative Agent and the Canadian Administrative
Agent pursuant to Section 6.10(g) hereof subject to (a) the right of the
Administrative Agent, the Canadian Administrative Agent or the Required Lenders
to contest any components thereof or the calculation thereof, and (b) immediate
adjustment as result of (i) establishment, increase, reduction or release of
Availability Reserves, (ii) reductions in advance rates permitted hereunder,
(iii) scheduled reductions in the Canadian Fixed Asset Component, (iv) more
frequent reporting of certain components of the Canadian Borrowing Base to the
extent required in accordance with Section 6.10(g), and (v) any changes in
eligibility standards required by the Administrative Agent.
"CANADIAN CREDIT PARTY" shall mean the Canadian Borrowers and
each other Credit Party which is formed or organized under the federal laws of
Canada or under the laws of any province or territory in Canada; provided, that,
for all purposes of this Agreement and the other Financing Documents,
International Holdings shall be deemed to be a Canadian Credit Party.
"CANADIAN EMPLOYEE FUNDING LIABILITY RESERVE" shall mean all
such amounts which, under the provisions of any Plan, agreement relating thereto
or applicable law, (i) are required to be paid as contributions to a Plan by any
Canadian Credit Party and (ii) have not been made when and at such times as
required pursuant to the terms of any such Plan, agreement relating thereto or
applicable law including any and all fines, penalties and assessments relating
thereto.
"CANADIAN EXCESS AVAILABILITY" shall mean, as of any date, the
remainder of (a) the Canadian Maximum Available Amount as of such date, less (b)
the aggregate outstanding balance of the Canadian Lender Indebtedness as of such
date.
"CANADIAN FIXED ASSET COMPONENT" shall mean a component of the
Canadian Borrowing Base attributable to the Canadian Borrowers' Eligible
Equipment and Eligible Real Property which shall initially be $16,000,000;
provided that the Canadian Fixed Asset Component shall (a) increase upon any
acquisition by the Canadian Borrowers of Eligible Equipment or Eligible Real
Property by an amount equal to eighty percent (80%) of the cash purchase price
of such Eligible Equipment and Eligible Real Property (excluding sales and
transfer taxes, transaction costs and delivery and installation expenses)
(subject to a maximum Canadian Fixed Asset Component of $16,000,000) and (b)
reduce (i) by the Canadian Fixed Asset Reduction Amount on each Quarterly Date
throughout the term of this Agreement commencing June 30, 2005, and (ii) upon
receipt of Net Proceeds from any sale
7
or other disposition, including any casualty or condemnation, of such Eligible
Equipment or such Eligible Real Property by the amount of such Net Proceeds.
"CANADIAN FIXED ASSET REDUCTION AMOUNT" shall initially mean
$500,000; provided, that, upon any increase in the Canadian Fixed Asset
Component, the Canadian Fixed Asset Reduction Amount then in effect shall be
increased to an amount necessary to fully amortize the Canadian Fixed Asset
Component as thereby increased on a straight line basis over a number of
quarters equal to the remainder of (a) 32, less (b) the number of calendar
quarters that have ended subsequent to the Closing Date as of such date.
"CANADIAN FUNDING AMOUNT" shall have the meaning set forth in
Section 2.2(d).
"CANADIAN LENDER" shall mean a Lender with a Canadian
Revolving Credit Commitment.
"CANADIAN LENDER INDEBTEDNESS" shall mean any and all amounts
owing or to be owing by any Canadian Credit Party to the Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks or the Lenders with respect
to or in connection with the Canadian Loans, any Canadian Letter of Credit
Liabilities, any Swap Agreement between any of the Canadian Borrowers and
JPMorgan or any of its Secured Affiliates, any Cash Management Agreement between
any of the Canadian Borrowers and a Canadian Lender or its Cash Management
Affiliate, this Agreement or any other Financing Document.
"CANADIAN LETTER OF CREDIT" and "CANADIAN LETTERS OF CREDIT"
shall have the meanings assigned to such terms in Section 2.3(b).
"CANADIAN LETTER OF CREDIT LIABILITIES" shall mean, at any
time and in respect of any Canadian Letter of Credit, the Dollar Equivalent at
such time of the sum of (a) the amount available for drawings under such
Canadian Letter of Credit as of the date of determination plus (b) the aggregate
unpaid amount of all Reimbursement Obligations due and payable as of the date of
determination in respect of previous drawings made under such Canadian Letter of
Credit.
"CANADIAN LOANS" shall mean the Canadian Revolving Credit
Loans.
"CANADIAN LOCKBOX" shall mean any lock box operated pursuant
to Section 4.4 hereof and the Canadian Lockbox Agreement.
"CANADIAN LOCKBOX ACCOUNTS" means deposit accounts of the
Canadian Borrowers maintained with Canadian Lockbox Bank which are subject to a
Canadian Lockbox Agreement.
"CANADIAN LOCKBOX BANK" shall mean Royal Bank of Canada or any
other financial institution designated by the Canadian Administrative Agent and
approved by the Canadian Administrative Agent to act as the Canadian Lockbox
Bank and consented to in writing by the Canadian Borrowers (which consent shall
not be unreasonably withheld) and which has entered into the Canadian Lockbox
Agreement.
"CANADIAN MAXIMUM AVAILABLE AMOUNT" shall mean, at any date,
an amount equal to the lesser of (a) the aggregate Canadian Revolving Credit
Commitments as of such date, and (b) the Canadian Borrowing Base as of such
date.
8
"CANADIAN OVERADVANCE" shall have the meaning assigned such
term in Section 2.9(b) hereof.
"CANADIAN PRIME RATE" shall mean on any day, the annual rate
of interest (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to
the greater of: (a) the annual rate of interest announced from time to time by
JPMorgan Canada as its prime rate in effect at its principal office in Xxxxxxx,
Xxxxxxx Xxxxxx on such day being the reference rate used by JPMorgan Canada for
determining interest rates on C$ denominated commercial loans to its customers
in Canada; and (b) the annual rate of interest equal to the sum of (i) the CDOR
Rate in effect on such day, and (ii) 1%.
"CANADIAN PRIME RATE LOANS" shall mean C$ Denominated Loans
which bear interest at a rate based upon the Canadian Prime Rate.
"CANADIAN PRIORITY CLAIMS RESERVE" shall mean, as of the last
day of each month, the aggregate amount of all claims that Governmental
Authorities have against the Canadian Borrowers on such date, which if asserted
could have priority over the Canadian Lender Indebtedness pursuant to applicable
Canadian federal, provincial or territorial laws and shall include, without
limitation, claims with respect to accrued salaries and wages, accrued vacation
payable, Revenue Canada employment taxes, employment post-retirement health and
dental insurance, goods and services, taxes and provincial sales taxes.
"CANADIAN REAL ESTATE MORTGAGE" shall mean a Mortgage and an
Assignment of Leases and Rents substantially in the form of Exhibits D-1 and D-2
and in each case with such changes thereto as the Canadian Administrative Agent
shall deem necessary or appropriate to comply with provincial and local
Governmental Requirements.
"CANADIAN REVOLVING CREDIT COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(d).
"CANADIAN REVOLVING CREDIT EXPOSURE" shall mean, at any time
and as to each Canadian Lender, the Dollar Equivalent sum of (a) the aggregate
principal amount of the Canadian Revolving Credit Loans made by such Canadian
Lender outstanding as of such date plus (b) the accrued and unpaid interest on
the Canadian Revolving Credit Loans made by such Canadian Lender outstanding as
of such date plus (c) such Canadian Lender's Canadian Revolving Credit
Percentage of the aggregate amount of all Canadian Letter of Credit Liabilities
as of such date.
"CANADIAN REVOLVING CREDIT LOAN" shall have the meaning
provided in Section 2.1(a).
"CANADIAN REVOLVING CREDIT PERCENTAGE" shall mean as to any
Canadian Lender, the percentage of the aggregate Canadian Revolving Credit
Commitments constituted by its Canadian Revolving Credit Commitment (or, if the
Canadian Revolving Credit Commitments have terminated or expired, the percentage
which such Canadian Lender's Canadian Revolving Credit Exposure at such time
constitutes of the Aggregate Canadian Revolving Credit Exposure at such time).
"CANADIAN SECURITY AGREEMENT" shall mean a Canadian Security
Agreement substantially in the form of Exhibit E to be executed by each Canadian
Borrower in favor of Canadian Administrative Agent for the ratable benefit of
Canadian Lenders and their Secured Affiliates and Cash Management Affiliates, as
amended, modified, renewed, supplemented or restated from time to time.
"CAPITAL EXPENDITURES" shall mean, as to any Person for any
period, all expenditures (whether paid in cash or accrued as a liability,
including the portion of Capital Lease Obligations
9
originally incurred during such period that are capitalized on the consolidated
balance sheet of the Company) by such Person and its Subsidiaries during such
period, that, in conformity with GAAP, are included in "capital expenditures,"
"additions to property, plant or equipment" or comparable items in the
consolidated financial statements of such Person, but excluding expenditures for
the restoration, repair or replacement of any fixed or capital asset that was
destroyed or damaged, in whole or in part, in an amount equal to any insurance
proceeds received in connection with such destruction or damage.
"CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a liability for a
capital lease on a balance sheet of such Person and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof.
"CASH MANAGEMENT AFFILIATE" shall mean any Affiliate of any
Lender that has entered into a Cash Management Agreement with a Credit Party
with the obligations of such Credit Party thereunder being secured by one or
more Security Instruments.
"CASH MANAGEMENT AGREEMENT" shall mean any document,
instrument, agreement, arrangements or transactions with respect to cash
management services and includes, without limitation, any of the foregoing
related to deposit accounts, overdraft protection, or automated clearing house
transactions.
"CASH MANAGEMENT RESERVES" shall mean, an amount (reflected in
Dollars) calculated as of the last day of each month and separately for the US
Borrowers and the Canadian Borrowers, equal to such Borrowers' liability under
the Cash Management Agreements to which such Borrowers are a party and any
exposure of the Lenders or Cash Management Affiliates with respect to such Cash
Management Agreements and the services performed thereunder on behalf of such
Borrowers.
"CDOR RATE" shall mean on any date, the annual rate of
interest which is the rate based on an average rate applicable to Canadian B/As
for a term of 30 days 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,
Ontario Canada time), on such date, or if such date is not a Business Day, then
on the immediately preceding Business Day, provided that, if such rate does not
appear on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on
any date shall be calculated as the rate for the term referred to above
applicable to Canadian B/As quoted by JPMorgan Canada as of 10:00 a.m. (Toronto,
Ontario Canada time) on such date or, if such date is not a Business Day, then
on the immediately preceding Business Day.
"CHANGE OF CONTROL" shall be deemed to occur at any time when
any of the following occurs: (a) any Unrelated Person or any Unrelated Persons,
acting together, which would constitute a Group together with any Affiliates or
Related Persons thereof (in each case also constituting Unrelated Persons) shall
at any time either (1) Beneficially Own more than 30% of the aggregate voting
power of all classes of Voting Stock of the Company, or (2) succeed in having a
sufficient number of its or their nominees elected to the Board of Directors of
the Company such that such nominees, when added to any existing director
remaining on the Board of Directors of the Company after such election who is an
Affiliate or Related Person of such Person or Group, shall constitute a majority
of the Board of Directors of the Company, (b) the Company ceasing to directly or
indirectly own 100% of the issued and outstanding Equity of each other Credit
Party on a fully diluted basis, or (c) so long as any of the Exchange Notes are
outstanding, the occurrence of a "Fundamental Change" as defined in the Exchange
Notes Indenture. As used herein (1) "BENEFICIALLY OWN" means "beneficially own"
as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, or
any successor provision thereto; provided,
10
however, that, for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates until such
tendered securities are accepted for purchase or exchange; (2) "GROUP" means a
"group" for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended; (3) "UNRELATED PERSON" means at any time any Person other than the
Company; and (4) "RELATED Person" of any Person means any other Person owning
(A) 10% or more of the outstanding common stock of such Person or (B) 10% or
more of the Voting Stock of such Person.
"CLOSING DATE" shall mean the "as of" date of this Agreement
set forth in the first paragraph hereof.
"CLOSING TRANSACTIONS" means (a) the consummation of the
Target Acquisition, (b) the termination of the Existing Credit Agreement and the
repayment (or cash collateralization) of all Indebtedness outstanding
thereunder, and (c) the funding of all Borrowings and issuance of all Letters of
Credit occurring on the Closing Date.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute.
"COLLATERAL" shall mean the Credit Parties' Properties
described in and subject to the Liens, privileges, priorities and security
interests purported to be created by any Security Instrument.
"COLLATERAL AVAILABILITY" shall mean (a) the sum of the US
Borrowing Base, the Canadian Borrowing Base, cash balances of Borrower in
accounts maintained with an Agent and subject to perfected, first priority Liens
in favor of an Agent, less (b) Aggregate Revolving Credit Exposures.
"COMBINED REVOLVING CREDIT COMMITMENT" shall mean, for any
Revolving Lender, the aggregate amount of such Revolving Lender's US and
Canadian Revolving Credit Commitments, and for purposes of this definition, a
Revolving Lender and its Related Affiliate shall be deemed to be one and the
same Revolving Lender.
"COMMITMENT" shall mean any US Revolving Credit Commitment, US
Swingline Commitment or Canadian Revolving Credit Commitment and "COMMITMENTS"
means all such Commitments collectively.
"COMMITMENT INCREASE AGREEMENT" shall mean a Commitment
Increase Agreement entered into by a Lender in accordance with Section 2.25 and
accepted by the Administrative Agent or Canadian Administrative Agent, as
applicable, in the form of Exhibit F, or any other form approved by
Administrative Agent or Canadian Administrative Agent, as applicable.
"COMPANY" shall have the meaning set forth in the initial
paragraph hereof.
"CONTRACT PERIOD" shall mean the term of a B/A selected by the
Canadian Borrowers in accordance with Section 2.6 or Section 2.10 commencing on
the date of such Borrowing or any rollover date, as applicable, of such B/A
(which shall be a Business Day) and expiring on a Business Day which shall be
either one month, two months, three months, or with the consent of the Canadian
Lenders, six months later; provided that no Contract Period shall extend beyond
the Maturity Date. Notwithstanding the foregoing, whenever the last day of any
Contract Period would otherwise occur on a day which is not a Business Day, the
last day of such Contract Period shall occur on the next succeeding Business Day
and such extension of time shall in such case be included in computing the
Acceptance Fee in respect of the relevant B/A.
11
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CREDIT PARTIES" shall mean the Company, and each of its
Subsidiaries collectively, and "CREDIT PARTY" shall mean any such Person
individually.
"CURRENT INFORMATION" shall mean, as of any day, the financial
statements and other related information for any applicable period most recently
required to be delivered to the Administrative Agent pursuant to Section
6.10(a), Section 6.10(b), and Section 6.10(c).
"DATED ASSETS" has the meaning assigned to such term in
Section 2.23(c) hereof.
"DATED LIABILITIES" has the meaning assigned to such term in
Section 2.23(c) hereof.
"DEFAULT" shall mean an Event of Default or any condition or
event which, with notice or lapse of time or both, would constitute an Event of
Default.
"DILUTION" shall mean a reduction as determined by the
Administrative Agent in the value of accounts caused by returns, allowances,
discounts, credits, and/or any other offsets asserted by customers or granted by
the Borrowers having the effect of reducing the collections of accounts.
"DILUTION PERCENTAGE" shall mean, for any period and with
respect to either the US Borrowers or the Canadian Borrowers, the ratio as
reasonably determined by the Administrative Agent of Dilution for such period to
the total sales of such Borrowers for such period.
"DISBURSEMENT ACCOUNT" has the meaning assigned to such term
in Section 2.4(a).
"DISCOUNT PROCEEDS" shall mean for any B/A, an amount (rounded
to the nearest whole cent, and with one-half of one cent being rounded upwards)
calculated on the applicable date of the Borrowing of which such B/A is a part
or any rollover date for such Borrowing by multiplying: (a) the face amount of
the B/A; by (b) the quotient of one divided by the sum of one plus the product
of: (1) the Discount Rate (expressed as a decimal) applicable to such B/A, and
(2) a fraction, the numerator of which is the Contract Period of the B/A and the
denominator of which is 365, with the such quotient being rounded up or down to
the fifth decimal place, and .000005 being rounded up.
"DISCOUNT RATE" shall mean the percentage discount rate
(expressed to two decimal places and rounded upward, if necessary, to the
nearest 0.01%) quoted by JPMorgan Canada as the percentage discount rate at
which JPMorgan Canada would, in accordance with its normal practices, at or
about 10:00 a.m., Xxxxxxx, Xxxxxxx Xxxxxx time, on such date, be prepared to
purchase bankers' acceptances accepted by JPMorgan Canada having a face amount
and term comparable to the face amount and term of such B/A.
"DOCUMENTARY LETTER OF CREDIT" shall mean a Letter of Credit
issued pursuant to the Existing Credit Agreement or this Agreement that supports
payment or performance for a single identified purchase or exchange of products
in the ordinary course of business of the Borrowers.
"DOLLAR" and the sign "$," without the letter "C" before it,
shall mean lawful money of the United States of America.
12
"DOLLAR DENOMINATED LOANS" shall mean US Revolving Credit
Loans and any Canadian Revolving Credit Loans which are denominated in Dollars
and Dollars Denominated Loans.
"DOLLAR EQUIVALENT" shall mean, on any date of determination,
with respect to any amount expressed in C$, the amount of Dollars that may be
purchased with such amount of C$ at the Spot Exchange Rate on such date.
"EBITDA" shall mean, as to the Company for any period, without
duplication, the amount equal to the following calculated for the Company and
its wholly owned consolidated Subsidiaries on a consolidated basis; net income
determined in accordance with GAAP, plus to the extent deducted from net income,
Interest Expense, depreciation, amortization, other non-cash expenses, and
income and franchise tax expenses; provided, that, extraordinary gains or losses
for any such period, including but not limited to gains or losses on the
disposition of assets, shall not be included in EBITDA.
"ELIGIBLE ACCOUNT" shall mean at any time with respect to a
Borrower the invoice amount, net of all goods and services taxes, harmonized
taxes and sales taxes, (which shall be the Dollar Equivalent at such time of any
amount denominated in C$) owing on each account (which shall mean any "account"
as such term is defined in Section 9-102(a)(2) of the UCC) of such Person (net
of any credit balance, returns, trade discounts, unapplied cash, unbilled
amounts or retention or finance charges) which meet such standards of
eligibility as the Administrative Agent shall establish from time to time in its
sole but reasonable discretion; provided, that, no account shall be deemed an
Eligible Account unless each of the following statements is accurate and
complete (and the applicable Borrowers by including such account in any
computation of the applicable Borrowing Base shall be deemed to represent and
warrant to the Administrative Agent, each Issuing Bank and the Lenders the
accuracy and completeness of such statements; provided, that, such Borrowers
will not be deemed to have represented or warranted to the Administrative
Agent's general satisfaction with the credit standing of any obligor (as
provided in clause (12) hereof) or satisfaction with letters of credit or
export/input insurance (as provided in clause (13) hereof)):
(1) Said account is a binding and valid obligation of the
obligor thereon in full force and effect;
(2) Said account is evidenced by an invoice;
(3) Said account is genuine as appearing on its face or as
represented in the books and records of the Person;
(4) Said account is free from claims regarding rescission,
cancellation or avoidance, whether by operation of law or otherwise;
(5) Payment of said account is less than 90 days past the
original invoice date thereof, other than accounts of up to three (3) obligors
owed to the Canadian Borrowers that have been extended 60 day terms by a
Canadian Borrower so long as payment of said accounts of such obligors are less
than 120 days past the original invoice date thereof;
(6) Said account is net of concessions, offset, deduction,
contras, chargebacks or understandings with the obligor thereon that in any way
could reasonably be expected to adversely affect the payment of, or the amount
of, said account;
(7) The Administrative Agent, or the Canadian Administrative
Agent, as the case may be, on behalf of the applicable Lenders, the Cash
Management Affiliates and the Secured Affiliates,
13
has a first-priority perfected Lien covering said account and said account is,
and at all times will be, free and clear of all other Liens other than Permitted
Liens none of which shall have priority over the Liens in favor of the
Administrative Agent or Canadian Administrative Agent (as applicable);
(8) The obligor on said account is not (a) an Affiliate of any
of the Borrowers, or (b) an employee of any of the Borrowers;
(9) Said account arose in the ordinary course of business of
the applicable Borrower;
(10) Said account is not payable by an obligor who is more
than 90 days past the original invoice date thereof with regard to 50% or more
of the total aggregate accounts owed to the Person by such obligor and all of
its Affiliates;
(11) All consents, licenses, approvals or authorizations of,
or registrations or declarations with, any Governmental Authority required to be
obtained, effected or given in connection with the execution, delivery and
performance of said account by each party obligated thereunder have been duly
obtained, effected or given and are in full force and effect;
(12) The obligor on said account is not the subject of any
bankruptcy or insolvency proceeding, has not had a trustee or receiver appointed
for all or a substantial part of its property, has not made an assignment for
the benefit of creditors, admitted its inability to pay its debts as they mature
or suspended its business, and the Administrative Agent, in its sole reasonable
discretion consistent with its standard practices, is otherwise satisfied with
the credit standing of such obligor;
(13) The obligor of said account is organized and existing
under the laws of the United States of America or a State thereof or the federal
laws of Canada, a province or territory thereof, or if the obligor is not so
organized and existing, said account is covered under letters of credit or
export/import insurance reasonably satisfactory to the Administrative Agent;
(14) The obligor of said account is not a state, commonwealth,
provincial, federal, foreign, territorial, or other court or governmental
department, commission, board, bureau, agency or instrumentality other than the
federal government of the United States of America, the federal government of
Canada or the government of any province or territory of Canada or political
subdivision thereof, and then only to the extent that such Person has complied
in all respects with the relevant provisions of the Federal Assignment of Claims
Act of 1940 (for a US Borrower) or the Financial Administration Act (Canada) or
similar provincial or territorial legislation or municipal ordinance of similar
purpose (for a Canadian Borrower);
(15) In the case of the sale of goods, the subject goods have
been sold and shipped or delivered to an obligor on a true sale basis on open
account, or subject to contract, and not on consignment, on approval, on a "sale
or return" basis, or on a "xxxx and hold" or "pre-sale" basis or subject to any
other repurchase or return agreement, no material part of the subject goods has
been returned, rejected, lost or damaged, and said account is not evidenced by
chattel paper or an instrument of any kind;
(16) Each of the representations and warranties set forth
herein and in the Security Instruments with respect to said account is true and
correct on such date; and
(17) The obligor of said account is not an individual or
individual proprietorship unless such individual or individual proprietorship
transacts business with the Borrower in the ordinary course of business of the
Borrower;
14
provided, that, if any Eligible Account, when added to all other accounts that
are obligations of the same obligor and its Affiliates, results in a total sum
that exceeds 20% of the total balance then due on all Eligible Accounts owed to
the Borrowers (without giving effect to any reduction in Eligible Accounts
pursuant to this proviso), unless the accounts of such obligors or group of
Affiliated obligors are insured pursuant to credit insurance acceptable to the
Administrative Agent which has been assigned to the Administrative Agent or the
Canadian Administrative Agent (as applicable), the amount of said accounts in
excess of 20% of such total balance then due shall be excluded from Eligible
Accounts of the Borrowers to whom said accounts are owed; provided, that, if
said accounts of such obligor (or group of Affiliated obligors) are owed to both
the US Borrowers and the Canadian Borrowers, such excess amount shall be
excluded from the Eligible Accounts of the Canadian Borrowers and the US
Borrowers in the same proportion as all amounts from such obligor are owed to
the Canadian Borrowers and the US Borrowers.
"ELIGIBLE ACCOUNT ADVANCE PERCENTAGE" shall mean 85%;
provided, that, the Administrative Agent may, in its sole discretion lower such
percentage to such lesser percentage as it deems appropriate in its sole
discretion at any time the applicable Borrowers' Dilution Percentage exceeds
five percent (5%).
"ELIGIBLE XXXX AND HOLD ACCOUNTS" shall mean any "account" (as
such term is defined in Section 9-102 of the UCC) of any US Borrower which would
be an "Eligible Account" except for the fact that such account is a "xxxx and
hold" account; provided that (a) such account has been outstanding less than 60
days from its original invoice date, and (b) the Administrative Agent shall have
received an agreement from the obligor thereof confirming its unconditional
obligation to pay such "xxxx and hold" accounts in form and substance
satisfactory to the Administrative Agent in its sole discretion.
"ELIGIBLE EQUIPMENT" shall mean equipment owned by a Borrower
and meeting each of the following requirements:
(1) a Borrower has good title to such equipment;
(2) a Borrower has the right to subject such equipment to a
Lien in favor of the Administrative Agent or the Canadian Administrative Agent,
as applicable; such equipment is subject to a first priority perfected Lien in
favor of the Administrative Agent or the Canadian Administrative Agent, as
applicable, and is free and clear of all other Liens of any nature whatsoever
(except for Permitted Liens which do not have priority over the Liens in favor
of the Administrative Agent or the Canadian Administrative Agent);
(3) the full purchase price for such equipment has been paid
by such Borrower;
(4) such equipment is located on premises (i) owned by such
Borrower, which premises are subject to a first priority perfected Lien in favor
of the Administrative Agent or the Canadian Administrative Agent, as applicable,
or (ii) leased by the Borrower where the lessor has delivered to the
Administrative Agent or the Canadian Administrative Agent, as applicable, a
Landlord Waiver (provided that no Landlord Waiver will be required to the extent
a Rent Reserve has been established);
(5) such equipment is in good working order and condition
(ordinary wear and tear excepted) and is used or held for use by the Borrowers
in the ordinary course of business of the Borrowers;
(6) such equipment is not subject to any agreement which
restricts the ability of the Borrowers to use, sell, transport or dispose of
such equipment or which restricts the Administrative
15
Agent's or the Canadian Administrative Agent's ability to take possession of,
sell or otherwise dispose of such equipment; and
(7) such equipment does not constitute "fixtures" under the
applicable laws of the jurisdiction in which such equipment is located.
"ELIGIBLE INCLUDED-IN-TRANSIT INVENTORY" shall mean
Included-In-Transit Inventory which would be "Eligible Inventory" but for the
requirement set forth in clause (2) of the definition of Eligible Inventory.
"ELIGIBLE INVENTORY" shall mean, at any time with respect to
any Borrower, all "inventory" (as such term is defined in Section 9-102 of the
UCC) of such Person for which each of the following statements is accurate and
complete (and each Borrower by including such inventory in any computation of
the applicable Borrowing Base shall be deemed to represent and warrant to each
Agent, each Issuing Bank and each Lender the accuracy and completeness of such
statements (subject to Permitted Borrowing Base Adjustments)):
(1) Said inventory is in good condition, meets all standards
imposed by any Governmental Authority having regulatory authority over it or its
use and/or sale and is not obsolete and is either currently usable or currently
salable in the normal course of business of such Person;
(2) Said inventory is either (i) inventory the payment for
which has been provided for by the issuance of a Documentary Letter of Credit
hereunder, (ii) is in possession of a Borrower and (1) located on Real Property
owned or leased by such Person and described in Schedule 5.24 hereto, and (2)
within the United States or Canada; provided, that, if said inventory is located
on Real Property leased by such Person, the landlord of such Real Property shall
have executed a Landlord Waiver Agreement or a Rent Reserve shall have been
established for such leased Real Property, (iii) is in the possession of a third
party warehouse or bailee, but only to the extent the applicable warehouseman or
bailee has provided a Bailee Letter to the Administrative Agent or the Canadian
Administrative Agent, as applicable, or (iv) is Included-In-Transit Inventory;
(3) Each of the representations and warranties set forth in
the Security Instruments with respect to said inventory is true and correct on
such date;
(4) The Administrative Agent or the Canadian Administrative
Agent, as the case may be, on behalf of the applicable Lenders, has a
first-priority perfected Lien covering said inventory, other than Permitted
Liens, and said inventory is, and at all times will be, free and clear of all
Liens except for Permitted Liens none of which shall have priority over the Lien
in favor of the Administrative Agent or the Canadian Administrative Agent (as
applicable);
(5) Said inventory does not include goods that are not owned
by such Person, that are held by such Person pursuant to a consignment agreement
or which have been sold by such Person on a xxxx and hold basis to the extent
such inventory has been paid for or has given rise to an Eligible Xxxx and Hold
Account;
(6) Said inventory is not subject to repossession under the
Bankruptcy and Insolvency Act (Canada) except to the extent the applicable
vendor has entered into an agreement with the Canadian Administrative Agent
waiving its right to repossession, which agreement shall be acceptable to the
Canadian Administrative Agent; and
(7) Said inventory does not consist of spools, store room
materials, supplies or parts.
16
Standards of eligibility for inventory may be fixed and revised prospectively
from time to time solely by the Administrative Agent in its sole reasonable
discretion consistent with its standard practices.
"ELIGIBLE REAL PROPERTY" means the real property listed on
Schedule 5.24 owned by a Borrower (a) that is acceptable in the sole reasonable
discretion of the Administrative Agent or the Canadian Administrative Agent,
consistent with its standard practices, for inclusion in the US Borrowing Base
or Canadian Borrowing Base, as applicable, (b) in respect of which an appraisal
report has been delivered to the Administrative Agent or the Canadian
Administrative Agent in form, scope and substance reasonably satisfactory to the
Administrative Agent or the Canadian Administrative Agent, (c) in respect of
which the Administrative Agent or Canadian Administrative Agent is satisfied
that all actions necessary or desirable in order to create a perfected first
priority Lien on such real property have been taken, including, the filing and
recording of a Real Estate Mortgage, (d) in respect of which an environmental
assessment report has been completed and delivered to the Administrative Agent
or the Canadian Administrative Agent in form and substance satisfactory to the
Lenders and which does not indicate any pending, threatened or existing
environmental liability, or non compliance with any environmental law, (e) which
is adequately protected by fully-paid valid title insurance with endorsements
and in amounts acceptable to the Administrative Agent or the Canadian
Administrative Agent , insuring that the Administrative Agent or the Canadian
Administrative Agent, as applicable, for the benefit of the Lenders, shall have
a perfected first priority Lien on such real property, evidence of which shall
have been provided in form and substance satisfactory to the Administrative
Agent or the Canadian Administrative Agent, and (f) if required by the
Administrative Agent or the Canadian Administrative Agent : (1) a survey meeting
the requirements of the Administrative Agent or the Canadian Administrative
Agent has been delivered for which all necessary fees have been paid and which
is dated no more than 30 days prior to the date on which the applicable Real
Estate Mortgage is recorded, certified to the Administrative Agent or the
Canadian Administrative Agent and the issuer of the title insurance policy in a
manner satisfactory to the Administrative Agent or the Canadian Administrative
Agent by a land surveyor duly registered and licensed in the state or province
in which such Eligible Real Property is located and acceptable to the
Administrative Agent or the Canadian Administrative Agent, as applicable, and
shows all buildings and other improvements, any offsite improvements, the
location of any easements, parking spaces, rights of way, building setback lines
and other dimensional regulations and the absence of encroachments, either by
such improvements or on to such property, and other defects, other than
encroachments and other defects acceptable to the Administrative Agent or the
Canadian Administrative Agent, as applicable; (2) in respect of which local
counsel in states in which the Eligible Real Property is located have delivered
a letter of opinion with respect to the enforceability and perfection of the
Real Estate Mortgages and any related fixture filings in form and substance
satisfactory to the Administrative Agent or the Canadian Administrative Agent;
and (3) in respect of which the applicable Borrower shall have used its
reasonable best efforts to obtain estoppel certificates executed by all tenants
of such Eligible Real Property and such other consents, agreements and
confirmations of lessors and third parties have been delivered as the
Administrative Agent or the Canadian Administrative Agent, as applicable, may
deem necessary or desirable, together with evidence that all other actions that
the Administrative Agent or the Canadian Administrative Agent may deem necessary
or desirable in order to create perfected first priority Liens on the property
described in the Real Estate Mortgages have been taken.
"ENVIRONMENTAL LAWS" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any Governmental
Authority pertaining to health or the environment in effect in any and all
jurisdictions in which any Credit Party is conducting or at any time has
conducted business, or where any Property of any Credit Party is located, or
where any hazardous substances generated by or disposed of by any of the Credit
Parties are located, including but not limited to the Oil Pollution Act of 1990
("OPA"), the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
17
Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 ("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, and other environmental conservation or protection
laws. The term "OIL" shall have the meaning specified in OPA; the terms
"HAZARDOUS SUBSTANCE," "RELEASE" and "THREATENED RELEASE" have the meanings
specified in CERCLA, and the terms "SOLID WASTE" and "DISPOSAL" (or "DISPOSED")
have the meanings specified in RCRA; provided, however, in the event either
CERCLA or RCRA is amended so as to change the meaning of any term defined
thereby, such changed meaning shall apply subsequent to the effective date of
such amendment, and provided, further, that, to the extent the laws of the state
in which any Property of any Credit Party is located establish a meaning for
"oil," "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
"EQUITY" shall mean shares of capital stock or a partnership,
profits, capital or member interest, or options, warrants or any other right to
substitute for or otherwise acquire the capital stock or a partnership, profits,
capital or member interest of any Person and shall expressly include all "stock
appreciation rights," "phantom stock," "profit participations" and other similar
interests.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute.
"ERISA AFFILIATE" shall mean each trade or business (whether
or not incorporated) which together with any Borrower would be deemed to be a
"single employer" within the meaning of Section 4001(b)(1) of ERISA or
Subsections 414(b), (c), (m) or (o) of the Code.
"ERISA TERMINATION EVENT" shall mean (a) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a "Reportable Event" not subject to the provision for 30-day notice to the
PBGC pursuant to regulations under Section 4043 of ERISA, (b) the withdrawal of
any Credit Party or any ERISA Affiliate from a Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c)
the filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041(c) of ERISA, (d) the institution
of proceedings to terminate a Plan by the PBGC, or (e) any other event or
condition which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" shall have the meaning provided in Article
8.
"EXCESS AVAILABILITY" shall mean, as of any date, the sum of
(a) the Canadian Excess Availability as of such date and (b) the US Excess
Availability as of such date.
"EXCHANGE NOTE DOCUMENTS" shall mean the Exchange Notes, the
Exchange Notes Indenture, and each other material document, instrument or
agreement to which the Company or any of its Subsidiaries is or may hereafter
become a party pertaining to the Exchange Notes.
"EXCHANGE NOTES" shall mean the 4.00% Convertible Senior
Subordinated Notes due 2033 and the 4.0% Convertible Senior Subordinated Notes
due 2033, in each case issued by the Company
18
in an aggregate principal amount of $120,000,000 and having the terms set forth
in the Exchange Notes Indenture.
"EXCHANGE NOTES INDENTURE" means, collectively, (a) the
Indenture dated December 30, 2004, by and between the Company and The Bank of
New York as Trustee setting forth certain terms and conditions of certain of the
Exchange Notes, and (b) the Indenture dated June 3, 2003, by and between the
Company and The Bank of New York as Trustee setting forth certain terms and
conditions of the Exchange Notes.
"EXCHANGECO" shall have the meaning set forth in the initial
paragraph hereof.
"EXCLUDED TAXES" shall mean, with respect to the
Administrative Agent, any Lender, any Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of any Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Company is located, and (c) in
the case of a Foreign Lender any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.19(f), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrowers with respect to such withholding tax
pursuant to Section 2.19(a). Notwithstanding the foregoing, "Excluded Taxes"
shall not include withholding taxes attributable to any amount payable by any US
Credit Party in respect of Canadian Lender Indebtedness pursuant to the Guaranty
and Security Agreement or any other Financing Document.
"EXISTING CREDIT AGREEMENT" shall mean the Amended and
Restated Credit Agreement dated as of December 31, 2002 by and among the
Borrowers, JPMorgan, as the administrative agent, CIT Business Credit Canada
Inc., as the Canadian administrative agent, and certain other parties thereto as
amended through the date hereof.
"EXISTING INDEBTEDNESS" shall mean all Funded Indebtedness of
the Credit Parties on the Closing Date, but excluding Loans and Letter of Credit
Liabilities.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FEE LETTER" shall mean one or more letter agreements
regarding fees, executed by JPMorgan and/or certain of its Affiliates and
accepted and agreed to by the Company as the same have been or may hereafter be
amended from time to time.
"FINANCIAL STATEMENTS" shall mean (a) the audited consolidated
financial statements of the Company for the Fiscal Years ended December 31,
2002, 2003, and 2004, and (b) the unaudited consolidated financial statements of
the Company for the Fiscal Quarter ended March 31, 2005.
19
"FINANCING DOCUMENTS" shall mean this Agreement, the Security
Instruments, the Applications, Borrowing Requests, Borrowing Base Reports, the
Cash Collateral Account Agreements, the Fee Letter, and the other documents,
instruments or agreements described in Section 3.1 and Section 3.2, together
with any other document, instrument or agreement (other than participation,
agency or similar agreements among the Lenders or between any Lender and any
other bank or creditor with respect to any indebtedness or obligations of the
Company or its Subsidiaries hereunder or thereunder) now or hereafter entered
into in connection with the Loans, the Lender Indebtedness or the Collateral, as
such documents, instruments or agreements may be amended, modified or
supplemented from time to time.
"FISCAL QUARTER" shall mean the fiscal quarter of the Company
and each of the Borrowers, ending on the last day of each March, June, September
and December of each year.
"FISCAL YEAR" shall mean the fiscal year of the Company and
each of the Borrowers, ending on the last day of December of each year.
"FIXED CHARGE COVERAGE RATIO" shall mean, as to the Company
and its Subsidiaries on a consolidated basis, determined for any period, the
ratio of (a) EBITDA for such period minus the sum of (1) Non Financed Capital
Expenditures made during such period, plus (2) cash taxes paid during such
period, to (b) the sum of (1) scheduled principal payments on Funded
Indebtedness during such period (including the amount of scheduled reductions in
the Canadian Fixed Asset Component and the US Fixed Asset Component, assuming
that such reduction commenced on September 30, 2004), plus (2) Adjusted Interest
Expense for such period, plus (3) principal payments on the Exchange Notes and
payments made to repurchase, redeem or otherwise retire the Exchange Notes
(including any Principal Return Payment) during and after such period (any such
payments made after such period shall be included as if such payments had
occurred on the first day of such period); provided, that Fixed Charge Coverage
Ratio shall be calculated without giving effect to any component thereof
attributable to Target and Target's Subsidiaries.
"FOREIGN LENDER" shall mean, as to the US Borrowers, any US
Lender that is organized under the laws of a jurisdiction other than that in
which the US Borrowers are located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.
"FUNDED INDEBTEDNESS" shall mean, as to any Person, without
duplication, all Indebtedness for borrowed money, all obligations evidenced by
bonds, debentures, notes, or other similar instruments, all Capital Lease
Obligations, all contingent obligations of such person with respect to letters
of credit and all guaranties of Funded Indebtedness of other Persons.
"GAAP" shall mean generally accepted accounting principles in
effect in the United States as applied in accordance with Section 1.2 as of the
date hereof consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any (domestic or foreign)
federal, state, province, territory, county, city, municipal or other political
subdivision or government, department, commission, board, bureau, court, agency
or any other instrumentality of any of them, which exercises jurisdiction over
any Credit Party or any Property (including, but not limited to, the use and/or
sale thereof) of any Credit Party or any Plan.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including but not limited to any of the foregoing which relate to Environmental
20
Laws, energy regulations and occupational, safety and health standards or
controls) of any Governmental Authority.
"GUARANTY AND SECURITY AGREEMENT" shall mean a Guaranty and
Security Agreement substantially in the form of Exhibit G to be executed by each
US Borrower in favor of Administrative Agent for the ratable benefit of the
Lenders and Secured Affiliates and Cash Management Affiliate, as amended,
modified, renewed, supplemented or restated from time to time.
"HIGHEST LAWFUL RATE" shall mean, with respect to each Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Lender
Indebtedness, as the case may be, owed to it under the law of any jurisdiction
whose laws may be mandatorily applicable to such Lender notwithstanding other
provisions of this Agreement, or law of the United States of America, Canada, or
any other jurisdiction applicable to such Lender and the Transactions, which
would permit such Lender to contract for, charge, take, reserve or receive a
greater amount of interest than under such jurisdiction's law.
"HOLDING" shall have the meaning set forth in the initial
paragraph hereof.
"INCLUDED-IN-TRANSIT INVENTORY" means Eligible Inventory which
(a) has been placed with a common carrier for shipment to a Borrower, (b) has
been inspected and approved by a Borrower or an agent of a Borrower, (c) is the
subject of a xxxx of lading or other document of title (all counterparts which,
to the extent the Administrative Agent or the Canadian Administrative Agent has
requested, are in the possession of the Administrative Agent or the Canadian
Administrative Agent, as applicable) vesting title to such inventory in a
Borrower, and (d) has been insured pursuant to one or more policies of insurance
meeting the requirements of Section 6.5 hereof.
"INDEBTEDNESS" of any Person shall mean:
(a) all obligations of such Person for borrowed money and
obligations evidenced by bonds, debentures or other similar instruments;
(b) all obligations of such Person (whether contingent or
otherwise) in respect of bankers' acceptances, letters of credit, surety or
other bonds and similar instruments;
(c) all obligations of such Person to pay the deferred
purchase price of Property or services (other than for borrowed money);
(d) all Capital Lease Obligations in respect of which such
Person is liable, contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person otherwise assures a creditor
against loss;
(e) all guaranties (direct or indirect), and other contingent
obligations of such Person in respect of, or obligations to purchase or
otherwise acquire or to assure payment of, Indebtedness or other obligations of
other Persons;
(f) Indebtedness of others secured by any Lien upon Property
owned by such Person, whether or not assumed;
(g) all obligations or undertakings of such Person to maintain
or cause to be maintained the financial position or financial covenants of other
Persons;
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(h) obligations to deliver goods or services in consideration
of advance payments, excluding such obligations incurred in the ordinary course
of business as conducted by the Borrowers as of the Closing Date;
(i) the net amount of obligations of such Person under
agreements of the types described in the definition of Swap Agreements; and
(j) any "synthetic lease", "tax retained operating lease" or
similar lease financing arrangements under which the tenant is treated as the
owner of property for tax purposes but such lease is treated as an operating
lease in accordance with GAAP.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded
Taxes.
"INTEREST EXPENSE" shall mean, as to any Person for any
period, without duplication, total interest expenses, whether paid or accrued as
liabilities (including the interest component of Capital Lease Obligations),
with respect to all outstanding Indebtedness, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to any
financing or letters of credit and net costs under any Swap Agreement to the
extent that such costs are included within interest expense in the Company's
financial statements prepared in accordance with GAAP.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan
and Canadian Prime Rate Loan (other than a US Swingline Loan), each Quarterly
Date and the Maturity Date, (b) with respect to each Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months' duration after the first day of
such Interest Period and the Maturity Date, and (c) with respect to any US
Swingline Loan, each Quarterly Date and the Maturity Date.
"INTEREST PERIOD" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the applicable Borrowers may elect; provided, that (a)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(b) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"INTERNATIONAL HOLDINGS" shall have the meaning set forth in
the initial paragraph hereof.
"INVENTORY ADVANCE PERCENTAGE" shall initially mean 65%;
provided that the Inventory Advance Rate may be adjusted by the Administrative
Agent in its sole but reasonable discretion based on the results of any
inventory appraisal conducted pursuant to Section 6.10(n).
"INVESTMENT" shall have the meaning set forth in the initial
paragraph hereof.
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"ISSUING BANK" shall mean (a) for each US Letter of Credit,
JPMorgan, as the issuing bank for such US Letter of Credit and (b) for each
Canadian Letter of Credit, JPMorgan Canada (or any other Lender designated by
the Canadian Borrowers and approved in writing by the Canadian Administrative
Agent such approval not to be unreasonably withheld), as the issuing bank for
such Canadian Letter of Credit.
"JPMORGAN" shall mean JPMorgan Chase Bank, N.A., in its
individual capacity or as an Issuing Bank, as the case may be, and not as the
Administrative Agent.
"JPMORGAN CANADA" shall mean JPMorgan Chase Bank, N.A.,
Toronto Branch, in its individual capacity or as an Issuing Bank, as the case
may be, and not as Canadian Administrative Agent.
"LANDLORD CONSENT AND SUBORDINATION AGREEMENT" shall mean an
agreement executed and delivered by each landlord of Real Property leased by any
Credit Party and subject to a Real Estate Mortgage pursuant to which such
landlord (a) consents to the execution and delivery of a Real Estate Mortgage by
such Credit Party in favor of the Administrative Agent or the Canadian
Administrative Agent, as applicable with respect to the leased Real Property,
and (b) subordinates all of its Liens to the Liens of the Administrative Agent
or the Canadian Administrative Agent, as applicable, in the Property of such
Credit Party located on the leased Real Property.
"LANDLORD WAIVER AGREEMENT" shall mean an agreement executed
and delivered by each landlord of Real Property leased by any Borrower pursuant
to which such landlord subordinates or waives all of its Liens to the Liens of
the Administrative Agent or the Canadian Administrative Agent (as applicable) in
the Property of such Borrower located on the leased Real Property.
"L/C COVER" when required by this Agreement for Letter of
Credit Liabilities of an Account Party, shall be effected by paying to the
Administrative Agent in the case of US Letter of Credit Liabilities or the
Canadian Administrative Agent in the case of Canadian Letter of Credit
Liabilities in immediately available funds, to be held by the Administrative
Agent or the Canadian Administrative Agent, as applicable, in a collateral
account maintained by the Administrative Agent or the Canadian Administrative
Agent, as applicable, and which accounts may be Blocked Accounts maintained with
the Administrative Agent or the Canadian Administrative Agent, as applicable,
and collaterally assigned as security pursuant to the Financing Documents, an
amount equal to the maximum amount of each applicable Letter of Credit issued
for the account of such account party which is available for drawing at any
time. Such amount shall be retained by the Administrative Agent or the Canadian
Administrative Agent, as applicable, in such collateral account until such time
as the applicable Letter of Credit shall have expired and the Reimbursement
Obligations, if any, with respect thereto shall have been fully satisfied.
"LENDER" and "LENDERS" shall have the meanings set forth in
the initial paragraph hereof.
"LENDER INDEBTEDNESS" shall mean any and all amounts owing or
to be owing by any Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the Loans, any Letter of Credit Liabilities, any Swap Agreement
between a Credit Party and JPMorgan or one of its Secured Affiliates, any Cash
Management Agreement between a Credit Party and any Lender or one of its Cash
Management Affiliates, this Agreement, or any other Financing Document.
"LENDING OFFICE" shall mean for each Lender the office
specified opposite such Lender's name on the signature pages hereof, or in the
Assignment and Assumption pursuant to which it became a
23
Lender, with respect to each Type of Loan, or such other office as such Lender
may designate in writing from time to time to the Company and the Administrative
Agent with respect to such Type of Loan.
"LETTER OF CREDIT" shall mean any Canadian Letter of Credit or
US Letter of Credit, and "LETTERS OF CREDIT" shall mean Canadian Letters of
Credit and US Letters of Credit, collectively.
"LETTER OF CREDIT LIABILITIES" shall mean the US Letter of
Credit Liabilities and Canadian Letter of Credit Liabilities, collectively.
"LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of the Dow
Xxxxx Market Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIEN" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on contract, constitutional, common, or
statutory law, and including but not limited to the lien or security interest
arising from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security purposes.
The term "Lien" shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions, liens and other
statutory, constitutional, or common law rights of landlords, leases and other
title exceptions and encumbrances affecting Property. For the purposes of this
Agreement, any Borrower shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, financing lease
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"LOAN" shall mean a Revolving Credit Loan or a US Swingline
Loan and "LOANS" shall mean the Revolving Credit Loans and the US Swingline
Loans or one or more of them as provided herein.
"LOCKBOX" shall mean any lockbox to be established and
operated pursuant to Section 4.3 and Section 4.4 hereof and a Lockbox Agreement.
"LOCKBOX AGREEMENT" shall mean one or more lockbox agreements,
tri-party agreements, or similar documents to be entered into between the
Borrowers (or any of them) and the Administrative Agent or the Canadian
Administrative Agent on the Administrative Agent's or the Canadian
Administrative Agent's standard form (with such modifications thereto as the
Administrative Agent or the Canadian Administrative Agent shall reasonably
require) setting forth certain terms applicable to the establishment and
operation of the applicable Lockbox. The Canadian Blocked Account Agreement
shall constitute a Lockbox Agreement.
"MATURITY DATE" shall mean May 26, 2010.
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"MARGIN STOCK" shall have the meaning provided in Regulations
U and X.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse
effect on (a) the business, operations, assets, liabilities, condition
(financial or otherwise), prospects, or results of operations of (i) the US
Borrowers taken as a whole, or (ii) the Canadian Borrowers taken as a whole, (b)
the validity or enforceability of any of the Financing Documents or the rights
and remedies of the Administrative Agent, the Canadian Administrative Agent or
the Lenders thereunder, or (c) the perfection or priority of any Liens securing
the Canadian Lender Indebtedness or the Lender Indebtedness.
"MAVERICK INTERNATIONAL" shall mean Maverick Tube
International, Inc., a Barbados foreign sales corporation.
"MORTGAGED REAL PROPERTY" shall mean the Real Property of the
Borrowers described on Part I of Schedule 5.24 hereto and all other Real
Property which may hereafter be mortgaged to the Administrative Agent or the
Canadian Administrative Agent pursuant to a Real Estate Mortgage.
"NET ORDERLY LIQUIDATION VALUE" means, with respect to
inventory of Borrower, the orderly liquidation value thereof as determined in a
manner acceptable to the Administrative Agent by an appraiser acceptable to the
Administrative Agent, net of all costs of liquidation thereof.
"NET PROCEEDS" means, with respect to any event, (a) the cash
proceeds received in respect of such event including (1) any cash received in
respect of any non-cash proceeds (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but excluding any interest
payments), but only as and when received, (2) in the case of a casualty,
insurance proceeds and (3) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (1) all
reasonable fees and out-of-pocket expenses paid to third parties (other than
Affiliates) in connection with such event, (2) in the case of a sale, transfer
or other disposition of an asset (including pursuant to a sale and leaseback
transaction or a casualty or a condemnation or similar proceeding), the amount
of all payments required to be made as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event and (3) the amount of all taxes
paid (or reasonably estimated to be payable) and the amount of any reserves
established to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the Borrowers).
"NEW LENDER" has the meaning assigned to such term in Section
2.25.
"NEW LENDER AGREEMENT" means a New Lender Agreement entered
into by a New Lender in accordance with Section 2.25 and accepted by the
Administrative Agent or Canadian Administrative Agent, as applicable, in the
form of Exhibit H, or any other form approved by Administrative Agent or
Canadian Administrative Agent.
"NEW SUBSIDIARY" has the meaning assigned to such term in
Section 6.9 hereof.
"NON FINANCED CAPITAL EXPENDITURES" shall mean Capital
Expenditures made by any Credit Party which are not financed pursuant to the
incurrence of Indebtedness, the issuance of Equity or receipt of an equity
contribution, a Capitalized Lease Obligation or a Loan.
"OBLIGATED PARTY" shall mean any Borrower and any other Person
who is a Party to a Financing Document for purposes of guaranteeing or securing
the Lender Indebtedness or any part
25
thereof; provided, that, Obligated Parties do not include any Bailee, suppliers,
landlords or account debtors of any Borrower that have executed Bailee Letters,
Landlord Consents and Subordination Agreements, Landlord Waiver Agreements,
xxxx-and-hold agreements or waivers of repossession rights under Bankruptcy and
Insolvency Act (Canada).
"OTHER TAXES" shall mean any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PAYMENT OFFICE" shall mean (a) with respect to US Loans, the
Administrative Agent's office located at 000 X. XxXxxxx Xxxxxx, 0xx Xxxxx, Mail
Code IL1-1190, Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxxxxx Xxxxxx (or such other
office or individual as the Administrative Agent may hereafter designate in
writing to the other parties hereto), and (b) with respect to Canadian Loans,
the Canadian Administrative Agent's office located at Royal Bank Plaza, South
Tower, 000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx MJ5 2J2, Attn: Xxxxxxx
Xxxxxxx or Xxxxxx Xxxxxxxx (or such other office or individual as the Canadian
Administrative Agent may hereafter designate in writing to the other parties
hereto).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"PERFECTION CERTIFICATE" shall mean that certain Perfection
Certificate dated May 26, 2005, executed by each Borrower and addressed to the
Administrative Agent.
"PERFECTION CERTIFICATE UPDATE" shall mean a Certificate from
a Responsible Officer of the Company in the form of Exhibit I hereto to be
delivered to the Administrative Agent monthly pursuant to Section 6.10(g) hereof
and setting forth all changes that would be required to be made to the
Perfection Certificates (as updated pursuant to any prior Perfection Certificate
Updates) to cause the Perfection Certificates to be accurate and complete if
reissued as of the last day of the month immediately preceding the month in
which the Perfection Certificate is required to be delivered pursuant to Section
6.10(g) hereof.
"PERMITTED BORROWING BASE ADJUSTMENTS" means adjustments to
the Canadian Borrowing Base or US Borrowing Base reflected on any Borrowing Base
Report delivered pursuant to Section 6.10(g) (a) made within ten (10) days after
delivery of such Borrowing Base Report, (b) solely to eliminate any intercompany
profit reflected in the cost of inventory acquired by any Borrower from an
Affiliate, and (c) which does not result in a reduction in the US Borrowing Base
and the Canadian Borrowing Base (considered in the aggregate) of greater than
$500,000.
"PERMITTED LIENS" shall have the meaning assigned in Section
7.3 hereof.
"PERSON" shall mean any individual, partnership, firm,
corporation, limited liability companies, association, joint venture, trust or
other entity, or any government or political subdivision or agency, department
or instrumentality thereof; provided, however, for the purpose of the definition
of "Change of Control," "Person" shall mean a "person" or group of persons
within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended.
"PLAN" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA (including, but not limited to, an employee
pension benefit plan, such as a foreign plan, which is not subject to the
provisions of ERISA), which (a) is currently or hereafter sponsored, maintained
or contributed to by any Credit Party or an ERISA Affiliate, or (b) was at any
time during the six preceding Fiscal Years sponsored, maintained or contributed
to by any Credit Party or an ERISA Affiliate.
26
"PRECISION" shall have the meaning set forth in the initial
paragraph hereof.
"PRECISION CANADA" shall have the meaning set forth in the
initial paragraph hereof.
"PREMOCA ACQUISITION" shall mean the proposed acquisition by
certain Credit Parties of the capital stock and/or assets of C.A. Premoca and
certain of its Affiliates.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by JPMorgan as its prime rate; each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.
"PRINCIPAL PROPERTY" shall mean all or a material part of a
principal manufacturing, processing or distribution facility of a Borrower,
including a material part of any equipment located thereon or used in connection
therewith; each principal manufacturing, processing or distribution facility of
the Borrowers as of the date hereof is described on Schedule 5.24 hereto.
"PRINCIPAL RETURN PAYMENT" shall have the meaning set forth in
Section 7.19(c) hereto.
"PROCESSING RESERVES" shall mean the aggregate of all amounts
due from any Borrower to a Bailee at the end of each month in respect of any
processing of such Borrower's inventory performed by such Bailee. The Processing
Reserves shall be calculated separately for the US Borrowers and the Canadian
Borrowers and shall be the Dollar Equivalent of any amounts otherwise expressed
in Canadian Dollars.
"PROJECTIONS" shall mean the projections of the results of
operations and financial condition of the Company and its consolidated
Subsidiaries for Fiscal Years ending on December 31, 2005, 2006, 2007, 2008,
2009 and 2010, copies of which have been provided to the Administrative Agent
and the Lenders.
"PROPERTY" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"PRUDENTIAL" shall have the meaning set forth in the initial
paragraph hereof.
"QUARTERLY DATES" shall mean the last day of each March, June,
September and December in each year.
"REAL ESTATE MORTGAGE" shall mean a Canadian Real Estate
Mortgage or a US Real Estate Mortgage, as the case may be.
"REAL PROPERTY" shall mean any right, title or interest in and
to real property, including any fee interest, leasehold interest, easement, or
license and any other right to use or occupy real property, including any right
arising by contract.
"REGISTER" shall have the meaning assigned in Section
10.7(b)(iv).
"REGULATION D", "REGULATIONS U AND X" shall mean,
respectively, Regulation D under the Securities Act of 1933, as amended or
modified from time to time, and Regulation U and Regulation X of the Board of
Governors of the Federal Reserve System, as such regulations are from time to
time in effect and any successor regulations thereto.
27
"REIMBURSEMENT OBLIGATIONS" shall mean, at any date, the
obligation of the Canadian Borrowers then outstanding in respect of Canadian
Letters of Credit and the obligation of the US Borrowers then outstanding in
respect of US Letters of Credit, to reimburse the Administrative Agent or the
Canadian Administrative Agent, as applicable, for the account of the Issuing
Bank for the amount paid by the Issuing Bank in respect of any drawings under
such Letters of Credit.
"RELATED AFFILIATE" shall mean (a) with respect to any US
Lender, such Lender's Affiliate which is a Canadian Lender hereunder if any, and
(b) with respect to any Canadian Lender, such Lender's Affiliate which is a US
Lender hereunder if any.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"RENT RESERVE" shall mean a reserve equal to three (3) months
of rental obligations for each parcel of Real Property leased by a Borrower at
which Eligible Inventory is located with respect to which the landlord has not
provided a Landlord Waiver Agreement.
"REPORT" means reports prepared by the Administrative Agent or
the Canadian Administrative Agent or another Person showing the results of
appraisals, field examinations or audits pertaining to the Borrowers' assets
from information furnished by or on behalf of the Borrowers, after the
Administrative Agent or the Canadian Administrative Agent has exercised their
rights of inspection pursuant to this Agreement, which Reports may be
distributed to the Lenders by the Administrative Agent or the Canadian
Administrative Agent.
"REQUIRED LENDERS" shall mean the Lenders having 51% or more
of the combined aggregate amount at such time of the Revolving Credit
Commitments, until terminated, and thereafter, the Lenders having 51% or more of
the Aggregate Revolving Credit Exposure.
"RESPONSIBLE OFFICER" shall mean, with respect to any
corporation, the chairman of the board, the president, any vice president, the
chief executive officer or the chief operating officer, or any equivalent
officer (regardless of his or her title), and, in respect of financial or
accounting matters, the chief financial officer, the vice president of finance,
the treasurer, the controller, or any equivalent officer (regardless of his or
her title). Unless otherwise specified, all references to a Responsible Officer
herein shall mean a Responsible Officer of all Borrowers.
"RESTRICTED PAYMENT" shall mean (a) any dividend or other
distribution (whether in cash, securities or other Property) with respect to
Equity in any Credit Party, (b) the redemption, retirement, acquisition,
cancellation or termination of any Equity in any Credit Party, (c) any payment,
prepayment, redemption, retirement, acquisition, cancellation or termination on
or before the scheduled due date therefore of any Indebtedness of any Credit
Party which is subordinated to all or any part of the Lender Indebtedness or
which is made in violation of the applicable subordination provisions, and (d)
the making of any sinking fund payment or similar deposit for any purpose
described in clauses (a), (b) or (c) preceding.
"REVOLVING CREDIT COMMITMENTS" shall mean collectively, the US
Revolving Credit Commitments and the Canadian Revolving Credit Commitments.
"REVOLVING CREDIT EXPOSURE" shall mean, at any time for each
Revolving Lender, the sum of such Lender's US Revolving Credit Exposure and
Canadian Revolving Credit Exposure at such time.
28
"REVOLVING CREDIT LOAN" shall mean, collectively, the US
Revolving Credit Loans and the Canadian Revolving Credit Loans.
"REVOLVING LENDERS" shall mean, collectively, the US Revolving
Lenders and the Canadian Lenders.
"ROLLING PERIOD" shall mean any period of four consecutive
Fiscal Quarters.
"SECURED AFFILIATE" shall mean any Affiliate of JPMorgan that
has entered into a Swap Agreement with any Credit Party with the obligations of
such Credit Party thereunder being secured by one or more Security Instruments.
"SECURITY INSTRUMENTS" shall mean any and all agreements or
instruments now or hereafter executed and delivered by any Credit Party or any
other Person as security for the payment or performance of the Lender
Indebtedness or the Canadian Lender Indebtedness, as any of the foregoing may be
amended, modified or supplemented.
"SETTLEMENT DATE" shall mean the date, weekly, and more
frequently, at the discretion of the Canadian Administrative Agent, upon the
occurrence of an Event of Default or a continuing decline or increase of the
Canadian Revolving Credit Loans, that the Canadian Administrative Agent and the
Canadian Lenders shall settle amongst themselves so that (a) the Canadian
Administrative Agent shall not have, as the agent for the Canadian Lenders, any
money at risk, and (b) on such Settlement Date the Canadian Lenders shall have
their respective Canadian Revolving Credit Percentage of the Aggregate Canadian
Revolving Credit Exposure; provided that each Settlement Date for a Canadian
Lender shall be a Business Day on which such Canadian Lender and its bank are
open for business, as applicable; provided, further, each Canadian Lender shall
have at least one Business Day's notice of a Settlement Date and the amount owed
by such Canadian Lender on that date.
"SOLVENT" shall mean with respect to any Person on a
particular date, the condition that, on such date, (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 liabilities 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 business or a transaction, for which such Person's property would constitute
an unreasonably small amount of capital.
"SPOT EXCHANGE RATE" shall mean, on any day, the spot rate at
which Dollars are offered on such day by JPMorgan Canada in Xxxxxxx, Xxxxxxx
Xxxxxx for C$ at approximately 11:00 a.m. (Toronto, Ontario Canada time).
"STANDBY LETTER OF CREDIT" shall mean a letter of credit that
(a) is used in lieu or in support of performance guarantees or performance,
surety or other similar bonds (but expressly excluding stay and appeal bonds)
arising in the ordinary course of business, (b) is used in lieu or in support of
stay or appeal bonds, (c) supports the payment of insurance premiums for
reasonably necessary casualty insurance carried by any of the Borrowers, or (d)
supports payment or performance for identified purchases or exchanges of
products or services in the ordinary course of business.
"STATUTORY RESERVE RATE" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the
29
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board to which
the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"STORAGE/HANDLING RESERVES" shall mean an amount, calculated
as of the last day of each month and calculated separately for the US Borrowers
and the Canadian Borrowers, equal to the aggregate of all amounts for storage,
handling and other services (other than amounts for processing work) charged by
each Bailee to such Borrowers for the three month period then ended; provided,
however, such amounts charged by Bailees who are no longer Bailees at end of the
period for which Storage/Handling Reserves are being calculated shall be
excluded in calculating Storage/Handling Reserves for such period; provided,
further, if a Bailee at the end of any period for which Storage/Handling
Reserves are being calculated has not been a Bailee for all of such period, all
such amounts paid to such Bailee shall be included in the Storage/Handling
Reserves on a pro forma basis as if such Bailee had been a Bailee since the
beginning of such period.
"SUBSIDIARY" of any Person shall mean a corporation, limited
liability company, partnership, limited partnership, unlimited liability
company, limited corporation or other entity of which a majority of the
outstanding shares of stock of each class having ordinary voting power or other
equity interests is owned by such Person, by one or more Subsidiaries of such
Person, or by such Person and one or more of its Subsidiaries.
"SUPER MAJORITY LENDERS" shall mean the Lenders having 75% or
more of the combined aggregate amount at such time of the Revolving Credit
Commitments, until terminated, and thereafter, the Lenders having 75% or more of
the Aggregate Revolving Credit Exposure.
"SWAP AGREEMENT" shall mean any interest rate, currency or
commodity swap, cap, floor, collar, forward agreement, futures contract or other
protection agreement or option with respect to any such transaction, designed to
hedge against fluctuations in interest rates, currency exchange rates or
commodity prices.
"SWAP RESERVES" shall mean, an amount (reflected in Dollars)
calculated as of the last day of each month and separately for the US Borrowers
and the Canadian Borrowers, equal to such Borrowers' net liability under the
Swap Agreements to which such Borrowers are a party, calculated in accordance
with GAAP, with such calculation subject to review and approval by the
Administrative Agent.
"TARGET" means each of International Growth Partners Ltda,
Select Growth Partners Ltda, International Growth Investors Ltd., Select Common
Partners Ltd., Tubos del Caribe S.A., Consorcio Metalurgico Nacional S.A.,
Tubulares de Colombia Ltda, Advance Tubular de Venezuela C.A., Advance Tubular
de Ecuador S.A., and Advance Corp.
"TARGET ACQUISITION" shall mean the acquisition by directly
and indirectly by International Holdings, Maverick GP, LLC and Investment of
substantially all of the Equity of Target pursuant to the Target Purchase
Agreement.
30
"TARGET FINANCIAL STATEMENTS" shall mean the financial
statements of Target described in Section 3.4 of the Target Purchase Agreement.
"TARGET PURCHASE AGREEMENT" shall mean that certain
Stock
Purchase Agreement dated as of May 20, 2005, by and between Mortonbay S.A. and
Piament Holdings S.A., as Sellers, and International Holdings, Maverick GP, LLC
and Investment, as Buyers.
"TARGET PURCHASE DOCUMENTS" has the meaning assigned to such
term in Section 5.27.
"TAXES" shall mean any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"TIER I REDUCED AVAILABILITY PERIOD" shall mean any period
beginning on a day in which Excess Availability is less than $150,000,000 but
greater than $75,000,000 and continuing until Excess Availability has been at
least $150,000,00 for six (6) consecutive calendar months.
"TIER II REDUCED AVAILABILITY PERIOD" shall mean any period
beginning on a day on which Excess Availability is less than $75,000,00 and
continuing until Excess Availability has been at least $75,000,000 for six (6)
consecutive calendar months.
"TRANSACTIONS" shall mean the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"TRIGGER THRESHOLD" shall mean an amount equal to the greater
of (a) $50,000,000, or (b) 13.33% of the aggregate amount of the Revolving
Credit Commitments.
"TUBE" shall have the meaning set forth in the initial
paragraph hereof.
"TUBE CANADA" shall have the meaning set forth in the initial
paragraph hereof.
"TYPE" of Loan shall mean an ABR Loan, a Eurodollar Loan, a
Canadian Prime Rate Loan, or a B/A Loan and shall also refer to a C$ Denominated
Loan or a Dollar Denominated Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York or, where applicable as to specific
Credit Party or Collateral, any other relevant state. In addition, "UCC" shall
mean with respect to the Canadian Credit Parties or any Property of the Canadian
Credit Parties subject thereto, the Personal Property Security Act or similar
legislation as from time to time in effect in the Province of Alberta or, where
applicable as to any specific Canadian Credit Party or Collateral, any other
relevant province or territory.
"US BLOCKED ACCOUNT" means a Blocked Account established by
the US Borrowers with the Administrative Agent.
"US BORROWERS" shall have the meaning set forth in the initial
paragraph hereof.
"US BORROWING BASE" shall mean, only with respect to the US
Borrowers, the amount equal to the sum of:
(a) the Eligible Account Advance Percentage of the US
Borrowers' Eligible Accounts, plus
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(b) the lesser of (i) the Eligible Account Advance Percentage
of US Borrowers' Eligible Xxxx and Hold Accounts and (ii) $25,000,000; plus
(c) the lesser of (i) 85% of the Net Orderly Liquidation Value
of the US Borrowers' Eligible Inventory, or (ii) the Inventory Advance
Percentage of the Base Value of the US Borrower's Eligible Inventory, plus
(d) the US Fixed Asset Component in effect as of the date for
which the US Borrowing Base is being calculated (provided that the US Fixed
Asset Component shall not, at any time, constitute more than twenty-five percent
(25%) of the US Borrowing Base); minus
(e) Availability Reserves established with respect to the US
Borrowing Base;
The US Borrowing Base in effect under this Agreement at any time shall be the US
Borrowing Base reflected on the most recent US Borrowing Base Report delivered
to the Administrative Agent and the Canadian Administrative Agent pursuant to
Section 6.10(g) hereof subject to (a) the right of the Administrative Agent, the
Canadian Administrative Agent or the Required Lenders to contest any components
thereof or the calculation thereof, and (b) immediate adjustment as result of
(i) establishment, increase, reduction or release of Availability Reserves, (ii)
reductions in advance rates permitted hereunder, (iii) scheduled reductions in
the US Fixed Asset Component, (iv) more frequent reporting of certain components
of the US Borrowing Base to the extent required in accordance with Section
6.10(g), and (v) any changes in eligibility standards required by the
Administrative Agent.
"US CREDIT PARTY" shall mean the US Borrowers and any other
Credit Party which is organized under the laws of any state of the United States
or any political subdivision thereof; provided, that, for all purposes of this
Agreement and the other Financing Documents, International Holdings shall not be
deemed a US Credit Party.
"US EMPLOYEE FUNDING LIABILITY RESERVE" shall mean all such
amounts which, under the provisions of any Plan, agreement relating thereto or
applicable law, (i) are required to be paid as contributions to a Plan by any US
Credit Party and (ii) have not been made when and at such times as required
pursuant to the terms of any such Plan, agreement relating thereto or applicable
law including any and all fines, penalties and assessments relating thereto.
"US EXCESS AVAILABILITY" shall mean, as of any date, the
remainder of (a) the US Maximum Available Amount, less (b) the aggregate
outstanding balance of the US Lender Indebtedness as of such date.
"US FIXED ASSET COMPONENT" shall mean a component of the US
Borrowing Base attributable to the US Borrowers' Eligible Equipment and Eligible
Real Property which shall initially be $64,000,000; provided that the US Fixed
Asset Component shall (a) increase upon any acquisition by the US Borrowers of
Eligible Equipment or Eligible Real Property by an amount equal to eighty
percent (80%) of the cash purchase price of such Eligible Equipment and Eligible
Real Property (excluding sales and transfer taxes, transaction costs and
delivery and installation expenses) (subject to a maximum US Fixed Asset
Component of $109,000,000), and (b) reduce (1) by the US Fixed Asset Reduction
Amount on each Quarterly Date throughout the term of this Agreement commencing
June 30, 2005, and (2) upon receipt of Net Proceeds from any sale or other
disposition, including any casualty or condemnation, of Eligible Equipment or
Eligible Real Property by the amount of such Net Proceeds.
"US FIXED ASSET REDUCTION AMOUNT" shall initially mean
$2,000,000; provided, that, upon any increase in the US Fixed Asset Component,
the US Fixed Asset Reduction Amount then in
32
effect shall be increased to an amount necessary to fully amortize the US Fixed
Asset Component as thereby increased on a straight line basis over a number of
quarters equal to the remainder of (a) 32, less (b) the number of calendar
quarters that have ended subsequent to the Closing Date as of such date.
"US FUNDING AMOUNT" shall have the meaning set forth in
Section 2.2(c).
"US LENDER" shall mean a US Revolving Lender or the US
Swingline Lender, "US LENDERS" means all US Revolving Lenders and US Swingline
Lenders, collectively.
"US LENDER INDEBTEDNESS" shall mean any and all amounts owing
or to be owing by any US Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the US Loans, any US Letter of Credit Liabilities, any Swap
Agreement between any of the US Borrowers and JPMorgan or any Secured Affiliate
thereof, any Cash Management Agreement between any of the US Borrowers and
Lender or its Cash Management Affiliate, this Agreement, or any other Financing
Document.
"US LETTER OF CREDIT" and "US LETTERS OF CREDIT" shall have
the meanings assigned to such terms in Section 2.3(a).
"US LETTER OF CREDIT LIABILITIES" shall mean, at any time and
in respect of any US Letter of Credit, the sum of (a) the amount available for
drawings under such US Letters of Credit as of the date of determination plus
(b) the aggregate unpaid amount of all Reimbursement Obligations due and payable
as of the date of determination in respect of previous drawings made under such
US Letters of Credit.
"US LOANS" shall mean US Revolving Credit Loans and US
Swingline Loans.
"US LOCKBOX" shall mean any lockbox to be established and
operated pursuant to Section 4.3 hereof and the US Lockbox Agreement.
"US LOCKBOX AGREEMENT" shall mean an agreement between the US
Borrowers and the Administrative Agent governing the US Lockbox.
"US MAXIMUM AVAILABLE AMOUNT" shall mean, at any date, an
amount equal to the the lesser of (a) the aggregate US Revolving Credit
Commitments as of such date, and (b) the US Borrowing Base as of such date.
"US OVERADVANCES" shall have the meaning assigned such term in
Section 2.9(a) hereof.
"US REAL ESTATE MORTGAGE" shall mean a Mortgage, Deed of
Trust, Security Agreement, Assignment and Financing Statement (or similarly
titled agreement) substantially in the form of Exhibit J and in each case with
such changes thereto as the Administrative Agent shall deem necessary or
appropriate to comply with state and local Governmental Requirements.
"US REVOLVING CREDIT COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(c).
"US REVOLVING CREDIT EXPOSURE" shall mean, at any time and as
to each US Revolving Lender, the sum of (a) the aggregate principal amount of US
Revolving Credit Loans made by such US Revolving Lender outstanding as of such
date plus (b) the accrued and unpaid interest on US Revolving Credit Loans made
by such US Revolving Lender outstanding as of such date plus (c) such US
Revolving Lender's US Revolving Credit Percentage of the aggregate amount of all
US Letter of Credit Liabilities as
33
of such date plus (d) such US Revolving Lender's US Revolving Credit Percentage
of the US Swingline Exposure as of such date.
"US REVOLVING CREDIT LOAN" shall have the meaning provided in
Section 2.1(a); the US Revolving Credit Loans shall not include any US Letter of
Credit Liabilities.
"US REVOLVING CREDIT PERCENTAGE" shall mean as to any US
Revolving Lender, the percentage of the aggregate US Revolving Credit
Commitments constituted by its US Revolving Credit Commitment (or, if the US
Revolving Credit Commitments have terminated or expired, the percentage which
such US Revolving Lender's Revolving Credit Exposure at such time constitutes of
the Aggregate US Revolving Credit Exposure at such time).
"US REVOLVING LENDER" shall mean a Lender with a US Revolving
Credit Commitment.
"US SWINGLINE AVAILABILITY" shall mean, on any date, an amount
equal to the remainder of (a) the US Swingline Commitment minus (b) the US
Swingline Exposure on such date.
"US SWINGLINE COMMITMENT" shall have the meaning assigned to
such term in Section 2.1(e).
"US SWINGLINE EXPOSURE" shall mean, at any time, the aggregate
principal amount of all US Swingline Loans made to the US Borrowers outstanding
at such time.
"US SWINGLINE LENDER" shall mean JPMorgan, in its capacity as
lender of US Swingline Loans hereunder.
"US SWINGLINE LOANS" shall have the meaning assigned to such
term in Section 2.1(a).
"VOTING STOCK" of any Person shall mean Equity of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
Section 1.2. ADDITIONAL DEFINITIONS. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP applied on a
basis consistent with the Financial Statements.
Section 1.3. OTHER DEFINITIONAL TERMS. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and
34
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 LOANS AND COMMITMENTS.
(a) LOANS. Subject to the terms and conditions and relying on
the representations and warranties contained herein, (A) on any Business Day
from and after the Closing Date, but prior to the Maturity Date, each US
Revolving Lender severally agrees to make revolving credit loans in Dollars
(each a "US REVOLVING CREDIT LOAN") to the US Borrowers, (B) on any Business Day
from and after the Closing Date, but prior to the Maturity Date, each Canadian
Lender severally agrees to make revolving credit loans in either Dollars or C$
and including by means of B/As (each a "CANADIAN REVOLVING CREDIT LOAN") to the
Canadian Borrowers, and (C) on any Business Day from and after the Closing Date,
but prior to the Maturity Date, the US Swingline Lender agrees to make revolving
swingline loans in Dollars (each a "US SWINGLINE LOAN") to the US Borrowers.
(b) TYPES OF LOANS. (1) The Dollar Denominated Loans made
pursuant hereto shall, at the option of the US Borrowers or the Canadian
Borrowers, as applicable, be either ABR Loans or Eurodollar Loans and may be
continued or converted pursuant to Section 2.10, (2) the C$ Denominated Loans
made pursuant hereto shall, at the option of the Canadian Borrowers, be either
Canadian Prime Rate Loans or B/A Loans and may be continued or converted
pursuant to Section 2.10, and (3) the US Swingline Loans made pursuant hereto
shall be ABR Loans; provided, that, except as otherwise specifically provided
herein, all Loans made pursuant to the same Borrowing shall be of the same Type.
(c) US REVOLVING CREDIT COMMITMENTS. Each US Revolving
Lender's US Revolving Credit Exposure shall not exceed at any one time the
amount set forth opposite such US Revolving Lender's name on Annex I under the
caption "US Revolving Credit Commitment" (as the same may be reduced pursuant to
Section 2.8 or otherwise from time to time modified pursuant to Sections 2.5 or
10.7), its "US REVOLVING CREDIT COMMITMENT," and collectively for all US
Revolving Lenders, the "US REVOLVING CREDIT COMMITMENTS"; the term "US Revolving
Credit Commitments" includes the requirements of the US Revolving Lenders to
purchase participations in the US Swingline Loans pursuant to Section 2.24
hereof; provided, however, that, the Aggregate US Revolving Credit Exposure at
any one time outstanding shall not exceed the US Maximum Available Amount in
effect at such time. Within the foregoing limits and subject to the conditions
set forth in Article 3, the US Borrowers may obtain Borrowings of US Revolving
Credit Loans, repay or prepay such US Revolving Credit Loans, and reborrow such
US Revolving Credit Loans.
(d) CANADIAN REVOLVING CREDIT COMMITMENTS. Subject to Section
2.7(i) hereof, the Dollar Equivalent of each Canadian Lender's Canadian
Revolving Credit Exposure shall not exceed at any one time the amount set forth
opposite such Canadian Lender's name on Annex I under the caption "Canadian
Revolving Credit Commitment" (as the same may be reduced pursuant to Section 2.8
or otherwise from time to time modified pursuant to Sections 2.5 or 10.7, its
"CANADIAN REVOLVING CREDIT COMMITMENT," and collectively for all Canadian
Lenders, the "CANADIAN REVOLVING CREDIT COMMITMENTS"; provided, however, that,
the Dollar Equivalent of the Aggregate Canadian Revolving Credit Exposure at any
one time outstanding shall not exceed the Canadian Maximum Available Amount in
effect at such time. Within the foregoing limits and subject to the conditions
set forth in Article 3, the Canadian Borrowers may obtain Borrowings of Canadian
Revolving Credit Loans, repay or prepay such Canadian Revolving Credit Loans,
and reborrow such Canadian Revolving Credit Loans.
35
(e) US SWINGLINE LOANS. The US Swingline Lender's US Swingline
Exposure shall not exceed at any one time the amount set forth opposite the US
Swingline Lender's name on Annex I under the caption "US Swingline Loan
Commitment" (the "US SWINGLINE COMMITMENT"); provided, however, the Aggregate US
Revolving Credit Exposure at any one time outstanding shall not exceed the US
Maximum Available Amount in effect at such time. Within the foregoing limits set
forth in Article 3, the US Borrowers may obtain Borrowings of US Swingline
Loans, repay or prepay such US Swingline Loans, and reborrow such US Swingline
Loans.
(f) AMOUNTS OF BORROWINGS, ETC. The aggregate principal amount
of each Borrowing (1) of Eurodollar Loans shall be (A) in an amount sufficient
to cause each Lender's share thereof to be not less than $500,000, and (B) in an
integral multiple of $100,000, (2) of US Revolving Credit Loans which are ABR
Loans shall be in minimum amount of $1,000,000 and shall be in an integral
multiple of $100,000 (other than Borrowings of the US Funding Amount, which
shall be in the amount required for the US Funding Amount), (3) of Canadian
Revolving Credit Loans which are ABR Loans shall be in a minimum amount of
$100,000 and shall be in an integral multiple of $50,000 (other than Borrowings
of the Canadian Funding Amount, which shall be in the amount required for the
Canadian Funding Amount), (4) of Canadian Prime Rate Loans shall be in a minimum
amount of C$100,000 and shall be in an integral multiple of C$50,000, (5) of B/A
Loans shall be in a minimum amount of C$500,000 and shall be in an integral
multiple of C$100,000, and (6) of US Swingline Loans shall be in any amount.
Borrowings of more than one Type shall be permitted; provided, however, that,
the Borrowers shall not be entitled to request any Borrowing that, if made,
would result in an aggregate of more than five separate Borrowings of Eurodollar
Loans or five separate B/A Loans being outstanding at any one time. For purposes
of the foregoing, Borrowings having different Interest Periods or Contract
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
Section 2.2 BORROWING REQUESTS.
(a) BORROWING REQUESTS. Whenever any of the Borrowers desires
to make a Borrowing hereunder, they shall give Advance Notice to the
Administrative Agent (in the case of any Borrowing of US Revolving Credit Loans
or US Swingline Loans) or the Canadian Administrative Agent (with a simultaneous
copy to the Administrative Agent (in the case of any Borrowing of Canadian
Loans)) in the form of a Borrowing Request, specifying, subject to the
provisions hereof, (1) the aggregate principal amount of the Loan to be made
pursuant to such Borrowing, (2) whether such Loan is a US Revolving Credit Loan,
Canadian Revolving Credit Loan or US Swingline Loan, (3) in the case of a
Canadian Revolving Credit Loan, whether such Loan is to be a Dollar Denominated
Loan or a C$ Denominated Loan, (4) the date of Borrowing (which shall be a
Business Day), (5) whether the Dollar Denominated Loans being made pursuant to
such Borrowing are to be ABR Loans or Eurodollar Loans, (6) whether the C$
Dollar Denominated Loans being made pursuant thereto are to be Canadian Prime
Rate Loans or B/A Loans, and (7) in the case of Eurodollar Loans or B/A Loans,
the Interest Period or Contract Period, respectively, to be applicable thereto.
(b) NOTICE BY THE ADMINISTRATIVE AGENT. Subject to Section
2.7(i) with respect to Canadian Revolving Credit Loans, the Administrative Agent
or the Canadian Administrative Agent (as applicable) shall promptly give the
Canadian Administrative Agent and each applicable Lender telecopy or telephonic
notice (and, in the case of telephonic notices, confirmed by telecopy or
otherwise in writing) of the proposed Borrowing (other than Borrowings of US
Swingline Loans in which case notice shall only be given the US Swingline
Lender), of such Lender's Applicable Percentage thereof and of the other matters
covered by the Advance Notice. The Borrowers hereby waive the right to dispute
the Administrative Agent's record of the terms of such telephonic notice, absent
manifest error.
36
(c) AUTOMATIC FUNDING TO US DISBURSEMENT ACCOUNTS.
Notwithstanding Section 2.2(a) and Section 2.2(b), on each Business Day, the US
Borrowers will be deemed to have requested pursuant to a Borrowing Request a
Borrowing to be made on such day in an amount (the "US FUNDING AMOUNT") equal to
the amount of all checks, drafts and other items submitted for payment from the
US Borrowers' Disbursement Account on such Business Day. Such Borrowing shall be
a Borrowing of US Swingline Loans to the extent of the remaining US Swingline
Availability and, thereafter, such Borrowings shall be US Revolving Credit
Loans, which shall be ABR Loans. Subject to the satisfaction of the conditions
precedent set forth in Article 3, any US Funding Amount made from Swingline
Loans and/or US Revolving Credit Loans shall be deposited into the US Borrower's
Disbursement Account.
(d) AUTOMATIC FUNDING TO CANADIAN DISBURSEMENT ACCOUNTS.
Notwithstanding Section 2.2(a) and Section 2.2(b), to the extent Canadian
Borrowers have established Disbursement Accounts with Canadian Administrative
Agent, on each Business Day, the Canadian Borrowers will be deemed to have
requested pursuant to a Borrowing Request a Borrowing to be made on such day in
an amount (the "CANADIAN FUNDING AMOUNT") equal to the amount of all checks,
drafts and other items submitted for payment from the Canadian Borrowers'
Disbursement Account on such Business Day. Such Borrowings shall be Canadian
Revolving Credit Loans, which shall be Canadian Prime Rate Loans.
Section 2.3 LETTERS OF CREDIT.
(a) ISSUANCE OF US LETTERS OF CREDIT. Subject to the terms and
conditions hereof, the US Borrowers shall have the right, in addition to US
Revolving Credit Loans provided for in Section 2.1, to utilize the US Revolving
Credit Commitments from time to time prior to the Maturity Date by obtaining the
issuance of either Documentary Letters of Credit or Standby Letters of Credit
for the accounts of any of the US Borrowers by an Issuing Bank if the US
Borrowers shall so request in the notice referred to in Section 2.3(d)(1) (each
such letter of credit being referred to as a "US LETTER OF CREDIT", and
collectively referred to as the "US LETTERS OF CREDIT"); provided, however, that
the Aggregate US Revolving Credit Exposure at any one time outstanding shall not
exceed the US Maximum Available Amount in effect at such time and the aggregate
of all US Letter of Credit Liabilities and Canadian Letter of Credit Liabilities
at any one time outstanding shall not exceed $40,000,000. US Letters of Credit
shall be denominated in Dollars and may be issued to support the obligations of
the US Borrowers only. Upon the date of the issuance of a US Letter of Credit,
the applicable Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each US Revolving Lender, and each US Revolving Lender
shall be deemed, without further action by any party hereto, to have purchased
from such Issuing Bank, a participation, to the extent of such applicable
Lender's US Revolving Credit Percentage, in such US Letter of Credit and the
related US Letter of Credit Liabilities.
(b) ISSUANCE OF CANADIAN LETTERS OF CREDIT. Subject to the
terms and conditions hereof, the Canadian Borrowers shall have the right, in
addition to Canadian Revolving Credit Loans provided for in Section 2.1, to
utilize the Canadian Revolving Credit Commitments from time to time prior to the
Maturity Date by obtaining the issuance of either Documentary Letters of Credit
or Standby Letters of Credit for the account of any of the Canadian Borrowers by
an Issuing Bank if the Canadian Borrowers shall so request in the notice
referred to in Section 2.3(d)(1) (each such letter of credit being referred to
as a "CANADIAN LETTER OF CREDIT", and collectively referred to as the "CANADIAN
LETTERS OF CREDIT"); provided, however, that, the Dollar Equivalent of the
Aggregate Canadian Revolving Credit Exposure at any one time outstanding shall
not exceed the Canadian Maximum Available Amount in effect at such time and the
Dollar Equivalent of the aggregate of all Canadian Letter of Credit Liabilities
and US Letter of Credit Liabilities at any one time outstanding shall not exceed
$40,000,000. Canadian Letters of Credit shall be denominated in Dollars or C$ as
the Canadian Borrowers shall elect and may be issued to support the obligations
of the Canadian Borrowers only. Upon the date of the issuance of a Canadian
Letter of Credit, the applicable Issuing Bank shall be deemed, without further
action by any
37
party hereto, to have sold to each Canadian Lender, and each Canadian Lender
shall be deemed, without further action by any party hereto, to have purchased
from such Issuing Bank, a participation, to the extent of such applicable
Lender's Canadian Revolving Credit Percentage, in such Canadian Letter of Credit
and the related Canadian Letter of Credit Liabilities.
(c) CERTAIN LIMITATION ON LETTERS OF CREDIT. No Letter of
Credit issued pursuant to this Agreement shall have an expiry date beyond the
earlier of (1) 364 days after the date of issuance (or 180 days after the date
of issuance in the case of Documentary Letters of Credit) or (2) five (5)
Business Days prior to the Maturity Date. Any Letter of Credit may give the
beneficiary thereof the right to draw upon the Letter of Credit upon its expiry
date to the extent not extended. No Letter of Credit shall be issued within
sixty (60) days of the Maturity Date.
(d) ADDITIONAL LETTER OF CREDIT PROVISIONS. The following
additional provisions shall apply to each Letter of Credit:
(1) Any of the Borrowers which desires an Issuing
Bank to issue a Letter of Credit for its account (an "ACCOUNT PARTY")
shall give the Administrative Agent (or the Canadian Administrative
Agent in the event such Letter of Credit is a Canadian Letter of
Credit) and the Issuing Bank at least five (5) Business Days' prior
notice in the form of a Borrowing Request (effective upon receipt), or
in each case, such shorter period as may be agreed to by the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) and such Issuing Bank, specifying the date such Letter of
Credit is to be issued (which shall be a Business Day) and describing:
(A) the face amount of the Letter of Credit and, in the case of any
Canadian Letter of Credit, the type of currency (Dollars or C$) in
which such Letter of Credit is to be denominated, (B) the expiration
date of the Letter of Credit, (C) the name and address of the
beneficiary, (D) information concerning the transaction proposed to be
supported by such Letter of Credit as the Administrative Agent (or the
Canadian Administrative Agent, as applicable) or such Issuing Bank may
reasonably request, (E) such other information and documents relating
to the Letter of Credit as the Administrative Agent (or the Canadian
Administrative Agent, as applicable) or such Issuing Bank may
reasonably request, and (F) a precise description of documents and the
verbatim text of any certificate to be presented by the beneficiary,
which, if presented prior to the expiry date of the Letter of Credit,
would require such Issuing Bank to make payment under the Letter of
Credit; provided that such Issuing Bank, in its reasonable judgment,
may require reasonable changes in such documents and certificates; and
provided further that such Issuing Bank shall not be required to issue
any Letter of Credit that on its terms requires payment thereunder
prior to the next Business Day following receipt by such Issuing Bank
of such documents and certificates. Each such notice shall be
accompanied by the applicable Issuing Bank's Application and by a
certificate executed by a Responsible Officer setting forth
calculations evidencing availability for such Letter of Credit pursuant
to Section 2.3(d)(2) and stating that all conditions precedent to such
issuance have been satisfied. Each Letter of Credit shall, to the
extent not inconsistent with the express terms hereof or the applicable
Application, be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (together with any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce, the
"UCP"), and shall, as to matters not governed by the UCP, be governed
by, and construed and interpreted in accordance with, the laws of the
State of New York.
(2) No US Letter of Credit or Canadian Letter of
Credit may be issued if after giving effect thereto the Aggregate US
Revolving Credit Exposure or the Aggregate Canadian Revolving Credit
Exposure would exceed the US Maximum Available Amount or the Canadian
Maximum Available Amount, respectively. On each day during the period
38
commencing with the issuance of any Letter of Credit and until such
Letter of Credit shall have expired or have been terminated, the US
Revolving Credit Commitment or Canadian Revolving Credit Commitment (as
applicable) of each Lender shall be deemed to be utilized for all
purposes hereof in an amount equal to such Lender's US Revolving Credit
Percentage or Canadian Revolving Credit Percentage of the amount of the
Letter of Credit Liabilities related to such Letter of Credit.
(3) Upon receipt from the beneficiary of any Letter
of Credit of any demand for payment thereunder, the Issuing Bank shall
promptly notify the Account Party for whose account such Letter of
Credit was issued and the Administrative Agent (or the Canadian
Administrative Agent if such Letter of Credit is a Canadian Letter of
Credit) of such demand (provided that the failure of an the Issuing
Bank to give such notice shall not affect the Reimbursement Obligations
of the Account Party hereunder) and the Account Party shall
immediately, and in any event no later than 10:00 a.m. (New York, New
York time) on the date of such drawing, reimburse the Administrative
Agent (or the Canadian Administrative Agent, as applicable) for the
account of the applicable Issuing Bank for any amount paid by the
Issuing Bank upon any drawing under such Letter of Credit, without
presentment, demand, protest or other formalities of any kind in an
amount, in same day funds, equal to the amount of such drawing. Unless
prior to 10:00 a.m. (New York, New York time) on the date of such
drawing, the Account Party shall have either notified the Issuing Bank
and the Administrative Agent (or the Canadian Administrative Agent, as
applicable) that the Account Party intends to reimburse the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) for the account of the applicable Issuing Bank for the
amount of such drawing with funds other than the proceeds of Loans or
delivered to the Administrative Agent (or the Canadian Administrative
Agent, as applicable) a Borrowing Request for Loans in an amount equal
to such drawing, the Account Party will be deemed to have given a
Borrowing Request to the Administrative Agent (or the Canadian
Administrative Agent, as applicable) requesting that the Lenders make
Revolving Credit Loans on the date on which such drawing is honored in
an amount equal to the amount of such drawing. Any Loans made pursuant
to the preceding sentence shall be (A) US Revolving Credit Loans which
are ABR Loans if the underlying Letter of Credit was a US Letter of
Credit, (B) Canadian Revolving Credit Loans if the underlying Letter of
Credit was a Canadian Letter of Credit, and (C) (i) Dollar Denominated
Loans and ABR Loans if the underlying Letter of Credit was denominated
in Dollars, and (ii) C$ Denominated Loans and Canadian Prime Rate Loans
if the underlying Letter of Credit was denominated in C$. The
obligation of Lenders to make Revolving Credit Loans pursuant to this
Section 2.3 (but not the participation obligations of the Lenders
pursuant to Section 2.3(d)(4) below) shall be subject to a) the
satisfaction of the conditions in Article 3 and b) the existence of
availability of the US Maximum Available Amount or Canadian Maximum
Available Amount (as applicable) pursuant to Section 2.1(c) or Section
2.1(d) hereof (after giving effect to repayment of the applicable
Reimbursement Obligations with the proceeds of the proposed Revolving
Credit Loans). Subject to the preceding sentence, if so requested by
the Administrative Agent (or the Canadian Administrative Agent, as
applicable), each of the US Revolving Lenders or the Canadian Lenders
(as applicable) shall, on the date of such drawing, make such Revolving
Credit Loans in an amount equal to such Lender's US Revolving Credit
Percentage or Canadian Revolving Credit Percentage (as applicable) of
such drawing or the full amount of the unused US or Maximum Available
Amount pursuant to Section 2.1(c) or Section 2.1(d) as applicable, the
proceeds of which shall be applied directly by the Administrative Agent
(or the Canadian Administrative Agent, as applicable) to reimburse the
applicable Issuing Bank to the extent of such proceeds.
(4) If the appropriate Account Party fails to
reimburse the applicable Issuing Bank as provided in Section 2.3(d)(3)
above for any reason, including, but not limited to, failure
39
to satisfy the conditions in Article 3 or insufficient availability
under the Maximum Available Amount pursuant to Section 2.1(c) or
Section 2.1(d) such Issuing Bank shall promptly notify the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) and the Administrative Agent (or the Canadian
Administrative Agent, as applicable) shall notify each US Revolving
Lender or Canadian Lender (as applicable) of the unreimbursed amount of
such drawing and of such Lender's respective participation therein
based on such Lender's US or Canadian Revolving Credit Percentage (as
applicable). Each such Lender will pay to the Administrative Agent (or
the Canadian Administrative Agent, as applicable) for the account of
the applicable Issuing Bank on the date of such notice an amount equal
to such Lender's US or Canadian Revolving Credit Percentage (as
applicable) of such unreimbursed drawing (or, if such notice is made
after 1:00 p.m. (New York, New York time) on such date, on the next
succeeding Business Day). If any Lender fails to make available to such
Issuing Bank the amount of such Lender's participation in such Letter
of Credit as provided in this Section 2.3(d)(4), such Issuing Bank
shall be entitled to recover such amount on demand from such Lender
together with interest at the Federal Funds Effective Rate for one
Business Day and thereafter at the ABR. Nothing in this Section
2.3(d)(4) shall be deemed to prejudice the right of any Lender to
recover from such Issuing Bank any amounts made available by such
Lender to such Issuing Bank pursuant to this Section 2.3(d)(4) if it is
determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Bank was wrongful and
such wrongful payment was the result of gross negligence or willful
misconduct on the part of such Issuing Bank. The applicable Issuing
Bank shall pay to the Administrative Agent (or the Canadian
Administrative Agent, as applicable) and the Administrative Agent (or
the Canadian Administrative Agent, as applicable) shall pay to each
Lender such Lender's US Revolving Credit Percentage or Canadian
Revolving Credit Percentage (as applicable) of all amounts received
from the Account Party for payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only
to the extent such Lender has made payment to such Issuing Bank in
respect of such Letter of Credit pursuant to this Section 2.3(d)(4).
(5) The issuance by the applicable Issuing Bank of
each Letter of Credit shall, in addition to the conditions precedent
set forth in Article 3, be subject to the conditions precedent that
such Letter of Credit shall be in the form and contain such terms as
shall be reasonably satisfactory to such Issuing Bank, and that the
Account Party shall have executed and delivered such other instruments
and agreements relating to the Letter of Credit as such Issuing Bank
shall have reasonably requested and that are not inconsistent with the
terms of this Agreement including the applicable Issuing Bank's
Application therefor. In the event of a conflict between the terms of
this Agreement and the terms of any Application, the terms of this
Agreement shall control.
(6) As between any Account Party and any Issuing
Bank, the Account Party assumes all risks of the acts and omissions of
or misuse of the Letters of Credit issued by such Issuing Bank by the
respective beneficiaries of such Letters of Credit. In furtherance and
not in limitation of the foregoing, such Issuing Bank shall not be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for or issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason; (C) for
errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they are in cipher; (D) for errors in interpretation of
technical terms; (E) for any loss or delay in the transmission or
otherwise of any document required in
40
order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (F) for the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of any drawing under such Letter
of Credit; and (G) for any consequences arising from causes beyond the
control of such Issuing Bank, including, without limitation, the
actions of any governmental authority. None of the above shall affect,
impair, or prevent the vesting of any of such Issuing Bank's rights or
powers hereunder. Notwithstanding anything to the contrary contained in
this Section 2.3(d)(6), no Account Party shall assume any risk, and
shall have no obligation to indemnify any Issuing Bank, in respect of
any liability incurred by such Issuing Bank arising primarily out of
the gross negligence or willful misconduct of such Issuing Bank, as
finally determined by a court of competent jurisdiction.
(7) Each Issuing Bank will send to the applicable
Account Party and the Administrative Agent (or the Canadian
Administrative Agent, as applicable) immediately upon issuance of any
Letter of Credit, or an amendment thereto, a true and complete copy of
such Letter of Credit, or such amendment thereto. Upon issuance of any
Letter of Credit or an amendment thereto, the Administrative Agent (or
the Canadian Administrative Agent, as applicable) shall promptly notify
each Lender of the terms of such Letter of Credit or amendment thereto,
and of such Lender's US Revolving Credit Percentage or Canadian
Revolving Credit Percentage (as applicable) of the amount of such
Letter of Credit or amendment thereto, and the Administrative Agent (or
the Canadian Administrative Agent, as applicable) shall provide to each
Lender a copy of such Letter of Credit or such amendment thereto. Upon
cancellation or termination of any Letter of Credit, the applicable
Issuing Bank shall promptly notify the Administrative Agent (or the
Canadian Administrative Agent, as applicable) and the applicable
Account Party, and the Administrative Agent (or the Canadian
Administrative Agent, as applicable) will then promptly notify each
Lender, of such cancellation or termination.
(8) The obligation of each Account Party to reimburse
each Issuing Bank for Reimbursement Obligations with regard to the
Letters of Credit issued by such Issuing Bank for such Account Party
and the obligations of the US Revolving Lenders and the Canadian
Lenders under Section 2.3(d)(4) shall be unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this
Agreement and under all circumstances including, without limitation,
the following circumstances:
(A) any lack of validity or enforceability
of any Letter of Credit;
(B) the existence of any claim, set-off,
defense or other right that any of the Borrowers may have at
any time against a beneficiary or any transferee of any Letter
of Credit (or any Persons for whom any such transferee may be
acting), any Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or
any unrelated transaction (including any underlying
transaction between the Account Party and the beneficiary for
which the Letter of Credit was procured) other than a defense
based on the gross negligence (as opposed to ordinary
negligence) or willful misconduct of such Issuing Bank, as
determined by a court of competent jurisdiction;
(C) any draft, demand, certificate or any
other document presented under any Letter of Credit is proved
to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein is untrue or inaccurate in
any respect;
(D) any adverse change in the condition
(financial or otherwise) of any Credit Party;
41
(E) any breach of this Agreement or any
other Financing Document by any of the Borrowers, the
Administrative Agent, the Canadian Administrative Agent or any
Lender (other than the applicable Issuing Bank);
(F) any other circumstance or happening
whatsoever which is similar to any of the foregoing; provided
that such other occurrence or happening is not the result of
the gross negligence (as opposed to ordinary negligence) or
willful misconduct of such Issuing Bank, as determined by a
court of competent jurisdiction; or
(G) the fact that a Default shall have
occurred and be continuing.
Section 2.4 DISBURSEMENT OF FUNDS.
(a) AVAILABILITY. Subject to Section 2.2(c) and Section
2.2(d), and, with respect to the Canadian Lenders, Section 2.7(i), no later than
11:00 a.m. (or, in the case of ABR Loans or Canadian Prime Rate Loans, 1:00
p.m.) (New York, New York time) on the date of each Borrowing (other than
Borrowings consisting of US Swingline Loans), each US Revolving Lender (in the
case of any Borrowing of US Revolving Credit Loans) and each Canadian Lender (in
the case of any Borrowing of Canadian Loans) will make available to the
Administrative Agent (or the Canadian Administrative Agent, in the case of a
Borrowing of Canadian Loans) such Lender's Applicable Percentage of the
principal amount of the Borrowing requested to be made on such date reduced by
the principal amount of Revolving Credit Loans (if any), as applicable, of such
Lender maturing on such date (provided, that no Borrowing comprised of Canadian
Revolving Credit Loans shall be reduced in respect of US Loans maturing on such
date in immediately available funds at the Payment Office (unless such Borrowing
is to be made under the Canadian Revolving Credit Facility and the Canadian
Borrowers have requested a Borrowing in C$, in which case such funds shall be
C$). The Administrative Agent (or the Canadian Administrative Agent, in the case
of a Borrowing of Canadian Loans) will make available to the applicable
Borrowers at the Payment Office of such Agent the aggregate of the amounts (if
any) so made available by the Lenders by either (1) depositing such amounts, in
immediately available funds, to the account of such Borrower at the
Administrative Agent or the Canadian Administrative Agent (as applicable)
designated by the applicable Borrowers for such purpose (for each of the
Borrowers, its "DISBURSEMENT ACCOUNT"), or (2) disbursing such amounts in
accordance with such other lawful instructions of such Borrowers as such
Borrowers shall specify in the applicable Borrowing Request. To the extent that
any Loans mature or Reimbursement Obligations are due and owing on the date of a
requested Borrowing of Revolving Credit Loans, as applicable, the Lenders shall
apply the proceeds of the Revolving Credit Loans then being made, to the extent
thereof, to the repayment of such maturing Loans or Reimbursement Obligations,
such Loans or Reimbursement Obligations and repayments intended to be a
contemporaneous exchange (provided, that the proceeds of any Borrowing comprised
of Canadian Revolving Credit Loans shall not be applied to pay US Revolving
Credit Loans maturing on such date. In respect of US Swingline Loans, the US
Swingline Lender will make available to the applicable US Borrowers (or, in the
case of a US Swingline Loan made to pay Reimbursement Obligations of such US
Borrowers, by remittance to the applicable Issuing Bank) the proceeds of such US
Swingline Loan in accordance with this Section 2.4(a) on or before 3:00 p.m.
(New York, New York time) on the date requested for such Borrowing or as
provided in Section 2.2(c) or Section 2.2(d).
(b) FUNDS TO THE ADMINISTRATIVE AGENT OR THE CANADIAN
ADMINISTRATIVE AGENT. Unless the Administrative Agent or the Canadian
Administrative Agent shall have been notified by any Lender prior to the date of
a Borrowing (other than a Borrowing consisting of US Swingline Loans) that such
Lender does not intend to make available to the Administrative Agent or the
Canadian Administrative Agent (as applicable) such Lender's US Revolving Credit
Percentage or Canadian Revolving Credit Percentage (as applicable) of the
Borrowing to be made on such date, subject to
42
Section 2.7(i) with respect to Canadian Revolving Credit Loans, the
Administrative Agent or the Canadian Administrative Agent (as applicable) may
assume that such Lender has made such amount available to the Administrative
Agent or the Canadian Administrative Agent (as applicable) on such date, and the
Administrative Agent or the Canadian Administrative Agent (as applicable) may
make available to or for the account of the applicable Borrowers a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent or the Canadian Administrative Agent (as applicable) by
such Lender on the date of a Borrowing, the Administrative Agent or the Canadian
Administrative Agent (as applicable) shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at such
Agent's cost of funds (as determined by such Agent). If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's or the
Canadian Administrative Agent's (as applicable) demand therefor, the
Administrative Agent or the Canadian Administrative Agent (as applicable) shall
promptly notify the applicable Borrowers and the applicable Borrowers shall
immediately pay such corresponding amount to the Administrative Agent or the
Canadian Administrative Agent (as applicable) together with interest at the rate
specified for the Borrowing which includes such amount paid. Nothing in this
Section 2.4 shall be deemed to relieve any Lender from its obligation to fulfill
its Revolving Credit Commitments hereunder or to prejudice any rights which the
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.
(c) LENDERS' RESPONSIBILITIES. No Lender shall be responsible
for any default by any other Lender in its obligation to make Loans hereunder,
and each Lender shall be obligated to make only such Loans provided to be made
by it hereunder, regardless of the failure of any other Lender to fulfill its
Commitment hereunder.
Section 2.5 INTEREST. In all cases subject to Section 10.13:
(a) ABR LOANS. Each ABR Loan (including each US Swingline
Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) EURODOLLAR LOANS. Each Eurodollar Loan shall bear interest
at the Adjusted LIBO Rate for the applicable Interest Period plus the Applicable
Rate.
(c) CANADIAN PRIME RATE LOANS. Each Canadian Prime Rate Loan
shall bear interest at the Canadian Prime Rate plus the Applicable Rate.
(d) DEFAULT INTEREST. After the occurrence and during the
continuance of any Default or Event of Default, the US Borrowers shall, on
demand from time to time, pay interest, to the extent permitted by law, on the
outstanding US Lender Indebtedness, and the Canadian Borrowers shall, on demand
from time to time, pay interest, to the extent permitted by law, on the Canadian
Lender Indebtedness (after as well as before judgment) at a rate per annum equal
to (1) in the case of any Eurodollar Loan, the rate that would be applicable
under Section 2.5(b) to such Eurodollar Loan, plus 2% per annum, (2) in the case
of any Canadian Prime Rate Loan, the rate that would be applicable under Section
2.5(c) to such Canadian Prime Rate Loan, plus 2% per annum, and (3) in the case
of any other amount, the rate that would be applicable under Section 2.5(a) to
an ABR Loan, plus 2% per annum, but in no event to exceed the Highest Lawful
Rate.
(e) INTEREST PAYMENT DATES. Accrued interest on each ABR Loan,
Eurodollar Loan and Canadian Prime Rate Loan shall be payable on each Interest
Payment Date and on the Maturity Date; provided, that (i) interest accrued
pursuant to Section 2.5(d) shall be payable on demand, (ii) in the event of a
prepayment of any Eurodollar Loan prior to the end of the Interest Period,
accrued interest on the amount prepaid shall be payable on the date of such
prepayment, and (iii) in the event of a conversion of
43
any Eurodollar Loan prior to the end of the Interest Period, accrued interest on
such Eurodollar Loan shall be payable on the Effective Date of Conversion.
(f) COMPUTATION OF INTEREST. All interest hereunder shall be
computed on the basis of a year of 360 days. The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
Section 2.6 BANKERS' ACCEPTANCES.
(a) Subject to the terms and conditions of this Agreement, the
Canadian Borrowers may request Borrowings of Canadian Revolving Credit Loans by
presenting drafts for acceptance and purchase as B/As by the Canadian Lenders.
(b) To facilitate availment of B/A Borrowings, the Canadian
Borrowers hereby appoint each Canadian Lender as their attorney to sign and
endorse on their behalf, in handwriting or by facsimile or mechanical signature
as and when deemed necessary by such Canadian Lender, blank forms of B/As in the
form requested by such Canadian Lender. In this respect, it is each Canadian
Lender's responsibility to maintain an adequate supply of blank forms of B/As
for acceptance under this Agreement. The Canadian Borrowers recognize and agree
that all B/As signed and/or endorsed on its behalf by a Canadian Lender shall
jointly and severally bind the Canadian Borrowers as fully and effectually as if
signed in the handwriting of and duly issued by the proper signing officers of
each Canadian Borrower. Each Canadian Lender is hereby authorized to issue such
B/As endorsed in blank in such face amounts as may be determined by such
Canadian Lender, provided that the aggregate amount thereof is equal to the
aggregate amount of B/As required to be accepted and purchased by such Canadian
Lender. No Canadian Lender or any Affiliate thereof shall be liable for any
damage, loss or other claim arising by reason of any loss or improper use of any
such instrument except the gross negligence or willful misconduct of such
Canadian Lender or its Affiliate, as applicable, or its officers, employees,
agents or representatives. Each Canadian Lender shall maintain a record with
respect to B/As (1) received by it in blank hereunder, (2) voided by it for any
reason, (3) accepted and purchased by it hereunder and (4) 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
provincial or federal statutes and regulations which apply to such Canadian
Lender. Each Canadian Lender agrees to provide a copy of such records to the
Canadian Borrowers at the Canadian Borrowers' expense upon request. On request
by or on behalf of the Canadian Borrowers, a Canadian Lender shall cancel all
forms of B/As which have been pre-signed or pre-endorsed on behalf of the
Canadian Borrowers and which are held by such Canadian Lender and are not
required to be issued in accordance with the Canadian Borrowers' irrevocable
notice. The Canadian Borrowers agree that, at the request of the Canadian
Administrative Agent, they shall deliver to the Canadian Administrative Agent a
"depository note" which complies with the requirements of the Depository Bills
and Notes Act (Canada) and consents to the deposit of any such depository note
in the book-based clearance system maintained by the Canadian Depository for
Securities.
(c) Drafts of the Canadian Borrowers to be accepted as B/As
hereunder shall be signed as set forth in this Section 2.6. Notwithstanding that
any person whose signature appears on any B/A may no longer be an authorized
signatory for any Canadian Lender or the Canadian Borrowers at the date of
issuance of a B/A, 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 B/A so signed shall be binding on the Canadian Borrowers.
44
(d) Promptly following receipt of a Borrowing Request or
notice of rollover pursuant to this Section 2.6 or Section 2.10 by way of B/As,
the Canadian Administrative Agent shall so advise the Canadian Lenders and shall
advise each Canadian Lender of the aggregate face amount of the B/As to be
accepted by it and the applicable Contract Period (which shall be identical for
all Canadian Lenders). The aggregate face amount of the B/As to be accepted by
the Canadian Lenders in respect of any Borrowing or rollover of B/A Loans shall
be not less than C$500,000 and shall be in an integral multiple of C$100,000.
(e) Upon acceptance of a B/A by a Canadian Lender, such
Canadian Lender shall purchase, or arrange the purchase of, such B/A from the
Canadian Borrowers at the Discount Rate for such Canadian Lender applicable to
such B/A accepted by it and provide to Canadian Administrative Agent the
Discount Proceeds for the account of the Canadian Borrowers in which event an
Acceptance Fee shall be payable by the Canadian Borrowers to such Canadian
Lender in respect of such B/A and shall be set off against the Discount Proceeds
payable by such Canadian Lender under this Section 2.6(e).
(f) Each Canadian Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all B/As accepted and
purchased by it.
(g) If a Canadian Lender is not a chartered bank under the
Bank Act (Canada) or if a Canadian Lender notifies the Administrative Agent in
writing that it is otherwise unable or unwilling to accept B/As, such Canadian
Lender will, instead of accepting and purchasing B/As, purchase from the
Canadian Borrowers a non-interest bearing note denominated in C$ (a "B/A
EQUIVALENT NOTE"), in the form of Exhibit K, issued by the Canadian Borrowers in
the amount and for the same term as the draft which such Canadian Lender would
otherwise have been required to accept and purchase hereunder. Each such
Canadian Lender will provide to the Canadian Administrative Agent the Discount
Proceeds of such B/A Equivalent Note for the account of any Canadian Borrower.
Each such B/A Equivalent Note will bear interest at the same rate which would
result if such Canadian Lender had accepted (and been paid an Acceptance Fee)
and purchased (on a discounted basis) a B/A for the relevant Contract Period (it
being the intention of the parties that each such B/A Equivalent Note shall have
the same economic consequences for the Canadian Lenders and any Canadian
Borrower as the B/A which such B/A Equivalent Note replaces). All such interest
shall be paid in advance on the date such B/A Loan is made, and will be deducted
from the principal amount of such B/A Equivalent Note in the same manner in
which the Discount Proceeds of a B/A would be deducted from the face amount of
the B/A. Subject to repayment requirements, on the last day of the relevant
Contract Period for such B/A Equivalent Note, any Canadian Borrower shall be
entitled to convert each such B/A Equivalent Note into another type of Loan, or
to roll over each such B/A Equivalent Note into another B/A Equivalent Note, all
in accordance with the applicable provisions of this Agreement.
(h) The Canadian Borrowers waive presentment for payment and
any other defense to payment of any amounts due to a Canadian Lender in respect
of a B/A accepted and purchased by it pursuant to this Agreement which might
exist solely by reason of such B/A being held, at the maturity thereof, by such
Canadian Lender in its own right and the Canadian Borrowers agree not to claim
any days of grace if such Canadian Lender as holder sues the Canadian Borrowers
on the B/A for payment of the amount payable by the Canadian Borrowers
thereunder. On the specified maturity date of a B/A, or such earlier date as may
be required or permitted pursuant to the provisions of this Agreement, the
Canadian Borrowers shall jointly and severally pay, through the Canadian
Administrative Agent, the Canadian Lender that has accepted and purchased such
B/A the full face amount of such B/A and after such payment, the Canadian
Borrowers shall have no further liability in respect of such B/A and such
Canadian Lender shall be entitled to all benefits of, and be responsible for all
payments due to third parties under, such B/A.
45
(i) If a Canadian Lender grants a participation in a portion
of its rights under this Agreement to a participant under Section 10.7, then in
respect of any B/A Borrowing, a portion thereof may, at the option of such
Canadian Lender, be by way of B/A accepted by such participant. In such event,
the Canadian Borrowers shall upon request of the Canadian Administrative Agent
or the Canadian Lender granting the participation execute and deliver a form of
B/A indemnity in favor of such participant for delivery to such participant.
(j) Notwithstanding anything herein to the contrary, no B/A
may be prepaid prior to the maturity date thereof, except as provided in Article
8.
Section 2.7 REPAYMENT OF LOANS.
(a) The US Borrowers hereby unconditionally, jointly and
severally promise to pay to the Administrative Agent for the account of each US
Revolving Lender, (1) the then unpaid principal amount of each US Revolving
Credit Loan of such Lender on the Maturity Date (or such earlier date on which
the Revolving Credit Loans become due and payable pursuant to Article 8); and
(2) the amounts specified in Section 2.9 on the dates specified in Section 2.9.
The US Borrowers hereby unconditionally, jointly and severally promise to pay to
the US Swingline Lender the then-unpaid principal amount of each US Swingline
Loan on the Maturity Date (or such earlier date on which such US Swingline Loans
become due and payable pursuant to Article 8).
(b) The Canadian Borrowers hereby jointly, severally and
unconditionally promise to pay to the Canadian Administrative Agent for the
account of each Canadian Lender, (1) the then unpaid principal amount of each
Canadian Revolving Credit Loan of such Lender on the Maturity Date (or such
earlier date on which the Revolving Credit Loans become due and payable pursuant
to Article 8); and (2) the amounts specified in Section 2.9 on the dates
specified in Section 2.9.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrowers to such
Lender resulting from each Loan of such Lender from time to time, including,
without limitation, the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register
pursuant to Section 10.7(b)(iv), and a subaccount therein for each US Lender, in
which shall be recorded (1) the amount of each US Loan made hereunder, the Type
thereof and each Interest Period, if any, applicable thereto, (2) the amount of
any principal or interest due and payable or to become due and payable from the
US Borrowers to each US Lender hereunder, and (3) both the amount of any sum
received by the Administrative Agent hereunder from the US Borrowers and each US
Lender's Applicable Percentage thereof. The Administrative Agent shall maintain
a separate register with respect to the US Swingline Loans which Register shall
contain the same information as the Register with respect to the US Loans.
(e) The Canadian Administrative Agent shall maintain the
Register pursuant to Section 10.7(b)(iv), and a subaccount therein for each
Canadian Lender, in which shall be recorded (1) the amount of each Canadian Loan
made hereunder, the Type thereof and each Interest Period or Contract Period, if
any, applicable thereto, (2) the amount of any principal or interest due and
payable or to become due and payable from the Canadian Borrowers to each
Canadian Lender hereunder, and (3) both the amount of any sum received by the
Canadian Administrative Agent hereunder from the Borrowers and each Canadian
Lender's Applicable Percentage thereof.
(f) The entries made in the Registers and the accounts of each
Lender maintained pursuant to Section 2.7(d) and Section 2.7(e) shall, absent
manifest error, to the extent permitted by
46
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that the
failure of any Lender or Agent to maintain a Register or any such account, or
any error therein, shall not in any manner affect the obligations of each
Borrower to repay (with applicable interest) the Loans made to such Borrower by
such Lender in accordance with the terms of this Agreement.
(g) The Administrative Agent shall render to the US Borrowers
each month a statement of the US Borrowers' account setting forth the following
information for the period from the date of the most recent preceding statement:
the aggregate principal amount of new US Revolving Credit Loans and US Swingline
Loans (if any) made to the US Borrowers, the aggregate amount of new
Reimbursement Obligations which have not been reimbursed, the aggregate face
amount of new US Letters of Credit issued for the accounts of the US Borrowers,
the amount of remittances and payments actually collected and applied by the
Administrative Agent to reduce the outstanding principal balance of the US
Swingline Loans and US Revolving Credit Loans, to reimburse Reimbursement
Obligations and establish L/C Cover during such period and the outstanding
principal balances of the US Swingline Loans and US Revolving Credit Loans, and
the aggregate US Letter of Credit Liabilities outstanding at the end of such
period. Such statement shall be deemed to be correct and accepted by and be
binding upon the US Borrowers unless the Administrative Agent receives a written
statement of the US Borrowers' exceptions to such account statement within
twenty (20) days after such statement was rendered to the US Borrowers.
(h) The Canadian Administrative Agent shall render to the
Canadian Borrowers each month a statement of the Canadian Borrowers' account
setting forth the following information for the period from the date of the most
recent preceding statement: the aggregate principal amount of new Canadian
Revolving Credit Loans made to the Canadian Borrowers, the aggregate amount of
new Reimbursement Obligations which have not been reimbursed, the aggregate face
amount of new Canadian Letters of Credit issued for the accounts of the Canadian
Borrowers, the amount of remittances and payments actually collected and applied
by the Canadian Administrative Agent to reduce the outstanding principal balance
of the Canadian Revolving Credit Loans, to reimburse Reimbursement Obligations
during such period and establish L/C Cover and the outstanding principal
balances of the Canadian Revolving Credit Loans and the aggregate Canadian
Letter of Credit Liabilities outstanding at the end of such period. Such
statement shall be deemed to be correct and accepted by and be binding upon the
Canadian Borrowers unless the Canadian Administrative Agent receives a written
statement of the Canadian Borrowers' exceptions to such account statement within
twenty (20) days after such statement was rendered to the Canadian Borrowers.
(i) The Canadian Administrative Agent shall on any Settlement
Date, and upon notice given by the Canadian Administrative Agent no later than
12:00 noon Toronto, Canada time, request each Canadian Lender to make and each
Canadian Lender hereby agrees to make, a Canadian Revolving Credit Loan in an
amount equal to such Canadian Lender's Canadian Revolving Credit Percentage of
the aggregate amount of the Canadian Revolving Credit Loans made by the Canadian
Administrative Agent from the preceding Settlement Date to the date of such
notice. Each Canadian Lender's obligation to make the Canadian Revolving Credit
Loans referred to in this Section 2.7(i) and to make the settlements pursuant to
this Section 2.7(i) shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which any such Canadian Lender or the Canadian Borrowers may have against
the Canadian Administrative Agent, any Canadian Borrower, any Canadian Lender or
any other Person for any reason whatsoever; (ii) any adverse change in the
condition (financial or otherwise) of the Canadian Borrowers; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. Without limiting the liability and obligation of each Canadian
Lender to make such advances, the Canadian Borrowers authorize the Canadian
Administrative Agent to charge the Canadian Borrower's account to
47
the extent amounts received from the Canadian Lenders are not sufficient to
repay in full the amount of any such deficiency. On the Settlement Date, the
Canadian Administrative Agent and the Canadian Lenders shall each remit to the
other, in immediately available funds, all amounts necessary so as to ensure
that, as of the Settlement Date, the Canadian Lenders shall have their
respective Canadian Revolving Credit Percentage of all outstanding Canadian
Revolving Credit Exposure. The Canadian Lenders acknowledge and agree that the
Canadian Revolving Credit Exposure of the Canadian Administrative Agent may
exceed the amount of its Canadian Revolving Credit Commitment (the "CANADIAN
ADMINISTRATIVE AGENT OVERLINE") solely as a result of the Canadian
Administrative Agent making advances on behalf of the other Canadian Lenders
pending settlement pursuant to this Section 2.7(i), but that such Canadian
Administrative Agent Overline shall in no way affect, limit or modify in any
respect the other Canadian Lenders' obligations to settle with the Canadian
Administrative Agent provided in this Section 2.7(i). The Canadian
Administrative Agent shall, after receipt of any interest and fees earned under
this Agreement, promptly remit to the Canadian Lenders their pro rata portion
(based on their respective Canadian Revolving Credit Commitments) of any (i)
fees they are entitled to receive, and (ii) interest computed at the rate and as
provided for in Section 2.5 of this Agreement on all outstanding amounts
advanced by the Canadian Lenders on each Settlement Date, prior to adjustment
for such settlement, which fees and interest are subsequent to the last
remittance by the Canadian Administrative Agent to the Canadian Lenders of such
interest amounts, provided, however, that the Canadian Lenders (other than the
Canadian Administrative Agent in its role as the agent for and on behalf of the
Canadian Lenders) shall not share in any of the fees provided for in any Fee
Letter. The Canadian Administrative Agent shall not be permitted to make any B/A
Loans or Eurodollar Loans on behalf of the other Canadian Lenders.
(j) The US Borrowers agree, that solely for purposes of
computing the charges under this Agreement (including interest), all items of
payment shall be deemed applied by the Administrative Agent one Business Day
after receipt by the Administrative Agent of funds which have been finally
credited to the US Loans whether such funds are received directly from the US
Borrowers or from the US Blocked Account.
(k) The Canadian Borrowers agree, that for purposes of
computing the interest charges under this Agreement (including interest), all
items of payment shall be deemed applied by the Canadian Administrative Agent
one Business Day after receipt by the Canadian Administrative Agent of funds
which have been finally credited to the Canadian Loans, whether such funds are
received directly from the Canadian Borrowers or from the Canadian Blocked
Account.
(l) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the applicable Borrowers shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.7) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
Section 2.8 VOLUNTARY TERMINATION OR REDUCTION OF REVOLVING CREDIT
COMMITMENTS.
(a) Each of the Borrowers may, upon at least five Business
Days' notice to the Administrative Agent and Canadian Administrative Agent,
terminate entirely at any time, or partially reduce from time to time by an
aggregate amount of $1,000,000 or any larger multiple of $100,000, the unused
portions of the US Revolving Credit Commitment or the Canadian Revolving Credit
Commitment, provided, that, (a) any such reduction shall apply proportionately
to the US Revolving
48
Credit Commitment or the Canadian Revolving Credit Commitment, as applicable, of
each Lender. The US Swingline Commitment may not be partially terminated by the
US Borrowers and may only be entirely terminated by the US Borrowers in
connection with the entire termination of the Commitments. If the US Revolving
Credit Commitments or the Canadian Revolving Credit Commitments are terminated
in their entirety, all accrued commitment fees with respect thereto shall be
payable on the effective date of such termination. Upon termination of the US
Revolving Credit Commitments and the Canadian Revolving Credit Commitments in
full, the commitments of the US Swingline Lender to make US Swingline Loans
shall terminate as well.
Section 2.9 MANDATORY PREPAYMENTS; VOLUNTARY PREPAYMENTS; ORDER OF
APPLICATION.
(a) MANDATORY PREPAYMENTS OF US REVOLVING CREDIT LOANS.
Subject to the last sentence of this Section 2.9(a), if at any time the
Aggregate US Revolving Credit Exposure is in excess of the US Maximum Available
Amount, the US Borrowers shall immediately jointly and severally pay to the
Administrative Agent, for the account of the US Revolving Lenders, the amount of
such excess to be applied (1) as a prepayment of the US Revolving Credit Loans
and Reimbursement Obligations with respect to US Letters of Credit, and (2)
after payment in full of the US Revolving Credit Loans and Reimbursement
Obligations, as L/C Cover for the US Letter of Credit Liabilities in an amount
of such remaining excess; provided, however, to the extent any mandatory
prepayment under this Section 2.9(a) is required as result of a reduction in the
US Borrowing Base resulting from any (i) establishment of additional, or
modification of existing, eligibility standards for any component of the US
Borrowing Base, (ii) reduction of the advance rate for any component of the US
Borrowing Base, or (iii) establishment of Availability Reserves, then such
required mandatory prepayment shall be due and payable within three (3) Business
Days of the date on which such US Borrowing Base reductions are effective. Each
US Revolving Lender acknowledges and agrees that notwithstanding anything to the
contrary set forth in this Agreement, the Administrative Agent, in its sole
discretion, may, for the account and credit risk of the US Revolving Credit
Lenders, (a) make or permit to remain outstanding US Swingline Loans, and/or (b)
cause each US Revolving Lenders to make, or permit to remain outstanding US
Revolving Credit Loans, or issue, or permit to remain outstanding, US Letters of
Credit, which in any case results in the Aggregate US Revolving Credit Exposure
exceeding the US Maximum Available Amount (collectively "US OVERADVANCES") in an
amount not exceeding ten percent (10%) of the aggregate US Revolving Credit
Commitments.
(b) MANDATORY PREPAYMENTS OF CANADIAN REVOLVING CREDIT LOANS.
If at any time the Dollar Equivalent of the Aggregate Canadian Revolving Credit
Exposure is in excess of the Canadian Maximum Available Amount, the Canadian
Borrowers shall immediately jointly and severally pay to the Canadian
Administrative Agent, for the account of the Canadian Lenders, the amount of
such excess to be applied (1) as a prepayment of the Canadian Revolving Credit
Loans (other than B/A Loans) and Reimbursement Obligations with respect to
Canadian Letters of Credit, (2) after payment in full of the Canadian Revolving
Credit Loans (other than B/A Loans) and Reimbursement Obligations, as B/A Cover
for B/A Loans, and (3) after B/A Cover has been effected for all outstanding B/A
Loans, as L/C Cover for the Canadian Letter of Credit Liabilities in an amount
of such remaining excess; provided, however, to the extent any mandatory
prepayment under this Section 2.9(b) is required as result of a reduction in the
Canadian Borrowing Base resulting from any (i) establishment of additional, or
modification of existing, eligibility standards for any component of the
Canadian Borrowing Base, (ii) reduction of the advance rate for any component of
the Canadian Borrowing Base, or (iii) establishment of Availability Reserves
against the Canadian Borrowing Base, then such required mandatory prepayment
shall be due and payable within three (3) Business Days of the date on which
such Canadian Borrowing Base reductions are effective. Each Canadian Revolving
Lender acknowledges and agrees that notwithstanding anything to the contrary set
forth in this Agreement, the Canadian Administrative Agent, in its sole
discretion, may, for the account and credit risk of the Canadian Revolving
Credit Lenders, cause each Canadian Revolving
49
Lenders to make, or permit to remain outstanding Canadian Revolving Credit
Loans, or issue, or permit to remain outstanding, Canadian Letters of Credit,
which in any case results in the Aggregate Canadian Revolving Credit Exposure
exceeding the Canadian Maximum Available Amount (collectively "CANADIAN
OVERADVANCES") in an amount not exceeding ten percent (10%) of the aggregate
Canadian Revolving Credit Commitments.
(c) APPLICATION OF PROCEEDS FROM US BLOCKED ACCOUNT. Prior to
the time the Activation Notice (US) is in effect, the Administrative Agent shall
transfer or apply the funds on deposit in the US Blocked Account in accordance
with the instructions of the US Borrowers. At any time the Activation Period is
in effect, the Administrative Agent may, in its sole discretion, and shall, at
the request of the Required Lenders, deliver an Activation Notice (US) to the US
Borrowers. On or before 11:00 a.m. (New York City time) on each Business Day
during the period that the Activation Notice (US) is in effect, the
Administrative Agent shall disburse to the appropriate Agent or Lenders for
application in accordance with Section 2.9(f) and Section 2.9(h), all amounts
then on deposit in the US Blocked Account which the Administrative Agent shall
have determined constitute "collected funds" in accordance with the policies of
the Administrative Agent then in effect.
(d) APPLICATION OF PROCEEDS FROM CANADIAN BLOCKED ACCOUNT.
Prior to the time the Activation Notice (Canadian) is in effect, the Canadian
Administrative Agent shall transfer or apply the funds on deposit in the
Canadian Blocked Account in accordance with the instructions of the Canadian
Borrowers. At any time the Activation Period is in effect, the Administrative
Agent may in its sole discretion, and shall, at the request of the Required
Lenders, deliver an Activation Notice (Canadian) to the Canadian Borrowers.
Subject to Section 2.7(i), on or before 11:00 a.m. (New York City time) on each
Business Day during the period that the Activation Notice (Canadian) is in
effect, the Canadian Administrative Agent shall disburse to the appropriate
Agent or Lenders for application in accordance with Section 2.9(g) and Section
2.9(i) hereof all amounts then on deposit in the Canadian Blocked Account which
the Canadian Administrative Agent shall have determined constitute "collected
funds" in accordance with the policies of the Canadian Administrative Agent then
in effect.
(e) VOLUNTARY PREPAYMENTS. Each of the Borrowers may, at their
option, at any time and from time to time, prepay the Loans (other than B/A
Loans) and the Reimbursement Obligations, in whole or in part, without premium
or penalty except for breakage costs with respect to Eurodollar Loans as
provided in Section 2.17, upon giving, in the case of any Eurodollar Loan, five
Business Days' prior written notice to the Administrative Agent, and, in the
case of any ABR Loan or Canadian Prime Rate Loan, prior written notice on the
same Business Day to the Administrative Agent (in the case of prepayment of US
Loans) or the Canadian Administrative Agent (in the case of a prepayment of
Canadian Loans). Such notice shall specify (1) in the case of any prepayment of
Loans, the date and amount of prepayment and whether the prepayment is (i) of US
Revolving Credit Loans, Canadian Revolving Credit Loans or US Swingline Loans
and (ii) of Eurodollar Loans, ABR Loans or Canadian Prime Rate Loans, or a
combination thereof, and, in each case if a combination thereof, the principal
amount allocable to each; and (2) in the case of any prepayment of Reimbursement
Obligations, the date and amount of prepayment, the identity of the applicable
Letter of Credit or Letters of Credit and the amount allocable to each of such
Reimbursement Obligations. Upon receipt of such notice, the Administrative Agent
or the Canadian Administrative Agent (as applicable) shall promptly notify each
Lender of the contents thereof and of such Lender's Applicable Percentage of
such prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with (if
a Eurodollar Loan is prepaid other than at the end of the Interest Period
applicable thereto) any amounts payable pursuant to Section 2.17. Each
prepayment of US Revolving Credit Loans which are ABR Loans may be in any
amount; each prepayment of Canadian Revolving Credit Loans which are ABR Loans
shall be in a minimum principal amount of $100,000 and shall be in an integral
multiple of C$50,000, each prepayment of Canadian Prime Rate Loans shall be in
the
50
minimum principal amount of C$100,000 and in integral multiple of $50,000; each
prepayment of Eurodollar Loans shall be in the minimum principal amount of
$500,000 and in integral multiples of $100,000 or, in the case of any of ABR
Loans, Eurodollar Loans, or Canadian Prime Rate Loans, the aggregate principal
balance outstanding on such Loans.
(f) ORDER OF PAYMENTS PRIOR TO DEFAULT (US BORROWERS). Unless
an Event of Default has occurred and is continuing, (1) any voluntary
prepayments of the US Loans made pursuant to Section 2.9(e) above shall be
applied to the US Loans specified to be prepaid in the notice of prepayment
delivered by the US Borrowers pursuant to Section 2.9(e), and (2) any other
payments by any of the US Borrowers (including, without limitation, any
application of the proceeds of Collateral of the US Borrowers) in respect of the
Lender Indebtedness, including, without limitation, amounts applied pursuant to
Section 2.9(c), shall be applied to the Lender Indebtedness in the following
order (i) first, to the payment in full of all costs, expenses and other charges
(but not fees) of the Administrative Agent then due and payable by the Borrowers
under the Financing Documents, (ii) second, to the payment in full of all costs,
expenses and other charges (but not fees) of the US Revolving Lenders payable by
the Borrowers under the Financing Agreements and all indemnities payable by the
Borrowers under the Financing Agreements then due to any US Revolving Lender,
(iii) third, to the payment in full of all fees then due and payable by the
Borrowers to the Administrative Agent in its capacity as such, (iv) fourth, to
the payment in full of all interest then due and payable in respect of the US
Swingline Loans, (v) fifth, to the payment in full of all interest then due and
payable in respect of the US Revolving Credit Loans, (vi) sixth, to the payment
in full of all fees then due and payable to the US Revolving Lenders pursuant to
Section 2.11(a) hereof, (vii) seventh, to the payment in full of all principal
then due and payable under Section 2.9(a) above (for application first to the US
Swingline Loans to the extent necessary to pay the US Swingline Loans in full,
and then to the US Revolving Credit Loans), (viii) eighth, to the payment of
principal of the US Swingline Loans, (ix) ninth, to the payment of principal of
the US Revolving Credit Loans, (x) tenth, to any other Lender Indebtedness to
the extent then due and payable, and (xi) eleventh, after giving effect to the
payment in full of all amounts due and payable pursuant to clauses (i) through
(xi) preceding, to the US Borrowers by depositing the net amount thereof in the
Disbursement Account for the US Borrowers.
(g) ORDER OF PAYMENTS PRIOR TO DEFAULT (CANADIAN BORROWERS).
Unless an Event of Default has occurred and is continuing, (1) any voluntary
prepayments of the Canadian Loans made pursuant to Section 2.9(e) above shall be
applied to the Canadian Loans specified to be prepaid in the notice of
prepayment delivered by the Canadian Borrowers pursuant to Section 2.9(e), (2)
any other payments by any of the Canadian Borrowers (including, without
limitation, any application of the proceeds of Collateral of the Canadian
Borrowers) in respect of the Canadian Lender Indebtedness, including, without
limitation, amounts applied pursuant to Section 2.9(d), shall be applied to the
Canadian Lender Indebtedness in the following order (i) first, to the payment in
full of all costs, expenses and other charges (but not fees) of the Canadian
Administrative Agent then due and payable by the Canadian Borrowers under the
Financing Documents, (ii) second, to the payment in full of all costs, expenses
and other charges (but not fees) of the Canadian Lenders payable by the Canadian
Borrowers under the Financing Agreements and all indemnities payable by the
Canadian Borrowers under the Financing Agreements then due to any Lender, (iii)
third, to the payment in full of all fees payable by the Canadian Borrowers to
the Canadian Administrative Agent in its capacity as such, (iv) fourth, to the
payment in full of all interest then due and payable in respect of the Canadian
Revolving Credit Loans, (v) fifth, to the payment in full of all fees then due
and payable to the Canadian Lenders pursuant to Section 2.11(b) hereof, (vi)
sixth, to the payment in full of all principal then due and payable under
Section 2.9(b) above, (vii) seventh, to the re-payment of principal of the
Canadian Revolving Credit Loans, (viii) eighth, to any other Canadian Lender
Indebtedness to the extent then due and payable, and (ix) ninth, after giving
effect to the payment in full of all amounts due and payable pursuant to clauses
(i) through (viii) preceding, to
51
the Canadian Borrowers by depositing the net amount thereof in the Disbursement
Account for the Canadian Borrowers.
(h) ORDER OF PAYMENTS DURING DEFAULT (US BORROWERS). During
the existence of any Event of Default, any payments in respect of the Lender
Indebtedness by or for the account of any of the US Borrowers or in respect of
any of the proceeds of Collateral of the US Borrowers, including, without
limitation, amounts applied pursuant to Section 2.9(c), shall be applied to the
Lender Indebtedness (1) first, to the payment in full of all costs, expenses and
other charges (but not fees) of the Administrative Agent and the Canadian
Administrative Agent incurred in connection with the collection and enforcement
of the Lender Indebtedness and for the protection, preservation or sale,
disposition or other realization upon the Collateral, including all expenses,
liabilities and advances incurred or made by or on behalf of the Administrative
Agent or the Canadian Administrative Agent in their capacity as such, including
attorneys' fees and legal expenses, (2) second, to the remaining Lender
Indebtedness (including to establish L/C Cover for all outstanding Letters of
Credit) in such order as the Administrative Agent shall determine in its sole
discretion, but expressly excluding any amounts to be paid pursuant to clause
(3) of this Section 2.9(h), and (3) third, to any Lender Indebtedness consisting
of amounts owed by any Credit Party in respect of any Swap Agreement or Cash
Management Agreement that are in excess of the Swap Reserves and Cash Management
Reserves, respectively, set forth in the most recent US Borrowing Base Report.
(i) ORDER OF PAYMENTS DURING DEFAULT (CANADIAN BORROWERS).
During the existence of any Event of Default, any payments in respect of the
Lender Indebtedness by or for the account of any of the Canadian Borrowers or in
respect of any of the proceeds of Collateral of the Canadian Borrowers,
including, without limitation, amounts applied pursuant to Section 2.9(d) shall
be applied to the Canadian Lender Indebtedness (1) first, to the payment in full
of all costs, expenses and other charges (but not fees) of the Canadian
Administrative Agent incurred in connection with the collection and enforcement
of the Canadian Lender Indebtedness and for the protection, preservation or
sale, disposition or other realization upon the Collateral provided by the
Canadian Borrowers, including all expenses, liabilities and advances incurred or
made by or on behalf of the Canadian Administrative Agent in its capacity as
such, including attorneys' fees and legal expenses, and (2) then to the
remaining Canadian Lender Indebtedness (including to establish L/C Cover for all
outstanding Canadian Letters of Credit) in such order as the Canadian
Administrative Agent shall determine in its sole discretion provided, that, any
Canadian Lender Indebtedness consisting of amounts owed by any Credit Party in
respect of any Swap Agreement or Cash Management Agreement that are in excess of
the Swap Reserves and Cash Management Reserves, respectively (set forth in the
most recent Canadian Borrowing Base Report (or Availability Reserves established
with respect to such liabilities) shall only be paid in full after payment in
full of all other Canadian Lender Indebtedness to be paid pursuant to this
clause (2).
Section 2.10 CONTINUATION AND CONVERSION OPTIONS.
(a) CONTINUATION. The Borrowers may elect to continue all or
any part of any Borrowing of Eurodollar Loans beyond the expiration of the then
current Interest Period relating thereto by giving Advance Notice (which shall
be irrevocable to the Administrative Agent or the Canadian Administrative Agent)
(with a simultaneous copy to the Administrative Agent) (as applicable) of such
election, specifying the Eurodollar Loans or portion thereof to be continued and
the Interest Period therefor. In the absence of such a timely and proper
election with regard to Eurodollar Loans, the Borrowers shall be deemed to have
elected to convert such Eurodollar Loans to ABR Loans pursuant to Section
2.10(d).
(b) AMOUNT OF CONTINUATIONS. All or part of any Eurodollar
Loans may be continued as provided herein, provided that any continuation of
such Loans shall not be (as to each
52
Borrowing of such Loans as continued for an applicable Interest Period) less
than $500,000 for each Lender and shall be in an integral multiple of $100,000.
(c) CONTINUATION OR CONVERSION UPON DEFAULT. If no Default
shall have occurred and be continuing, each Eurodollar Loan may be continued or
converted as provided in this Section. If a Default shall have occurred and be
continuing, the Borrowers shall not have the option to elect to continue any
such Eurodollar Loan pursuant to Section 2.10(a) or to convert ABR Loans to
Eurodollar Loans pursuant to Section 2.10(e).
(d) CONVERSION TO ABR. The Borrowers may elect to convert any
Eurodollar Loan on the last day of the then current Interest Period relating
thereto to an ABR Loan by giving Advance Notice to the Administrative Agent of
such election.
(e) CONVERSION TO EURODOLLAR LOAN. The Borrowers may elect to
convert any ABR Loan at any time or from time to time to a Eurodollar Loan by
giving Advance Notice (which shall be irrevocable to the Administrative Agent of
such election, specifying each Interest Period therefor.
(f) AMOUNTS OF CONVERSIONS. All or any part of the outstanding
Loans may be converted as provided herein, provided that any conversion of such
Loans to a Eurodollar Loan shall result in a Borrowing of Eurodollar Loans in an
amount not less than $500,000 for each Lender and in an integral multiple of
$100,000.
(g) ROLLOVER OF B/A LOANS. With respect to each B/A Borrowing,
at or before 12:00 p.m. (noon), Xxxxxxx, Xxxxxxx Xxxxxx time, three Business
Days before the maturity date of such B/As, the Canadian Borrowers shall notify
in writing the Canadian Administrative Agent, if the Canadian Borrowers intend
to issue B/As on such maturity date to provide for the payment of such maturing
B/As. If the Canadian Borrowers fail to notify the Canadian Administrative Agent
of their intention to issue B/As on such maturity the Canadian Borrowers shall
provide payment to the Canadian Administrative Agent for the account of the
Canadian Lenders of an amount equal to the aggregate face amount of such B/As on
the maturity date of such B/As. If the Canadian Borrowers fail to make such
payment, such maturing B/As shall be deemed to have been converted on their
maturity date into a Canadian Prime Rate Loan in an aggregate principal amount
equal to the aggregate face amounts of such B/As and the Canadian Borrowers
shall on demand jointly and severally pay any losses, costs or penalties that
may have been incurred by the Canadian Administrative Agent or any Canadian
Lender due to the failure of the Canadian Borrowers to make such payment. No B/A
may be rolled over when any Default has occurred and is continuing and the
Canadian Administrative Agent has or the Canadian Lenders have determined in its
or their sole discretion that such conversion is not appropriate.
(h) CONVERSION INTO B/A LOANS. Subject to the provisions of
this Agreement, the Canadian Borrowers may, prior to the Maturity Date,
effective on any Business Day, convert in whole or part, Canadian Prime Rate
Loans into B/As or vice versa (but only on the last day of a Contract Period in
the case of conversions of B/As) upon giving to the Canadian Administrative
Agent Advance Notice, provided that: (1) no Canadian Prime Rate Loan may be
converted into a B/A when any Default has occurred and is continuing and the
Canadian Administrative Agent has or the Canadian Lenders have determined in its
or their sole reasonable discretion that such conversion is not appropriate; and
(2) each conversion pursuant to this paragraph shall be not be less than
C$500,000 and shall in an integral multiple of C$100,000. In the case of
conversions of Canadian Prime Rate Loans into B/As, the Canadian Borrowers shall
jointly and severally pay to the Administrative Agent, for the account of the
Canadian Lender accepting such B/A, on the date of such conversion an amount
equal to (A) the difference between the principal amount of the converted
Canadian Prime Rate Loan less the Discount Proceeds plus (B) the Acceptance Fee
to which such Canadian Lender is entitled upon acceptance of such B/A. If the
Canadian
53
Borrowers shall not have delivered a Borrowing Request in accordance with this
Section 2.10(h) prior to the maturity date then in effect for any B/A Borrowing
requesting that such Borrowing be refinanced with another B/A Borrowing or
converted to a Canadian Prime Borrowing, then the Canadian Borrowers shall
(unless the Canadian Borrowers have notified the Administrative Agent, before
11:00 a.m., Xxxxxxx, Xxxxxxx Xxxxxx time, not less than one Business Day prior
to such maturity date, that such Borrowing is to be repaid on such maturity
date) be deemed to have delivered a Borrowing Request requesting that such
Borrowing be refinanced with a new Borrowing of the same amount, and such new
Borrowing shall be a Canadian Prime Borrowing.
Section 2.11 FEES.
(a) US REVOLVING CREDIT COMMITMENTS. The US Borrowers shall
jointly and severally pay to the Administrative Agent for the account of and
distribution to each US Revolving Lender in accordance with its US Revolving
Credit Percentage a commitment fee for the period commencing on the Closing
Date, to and including the Maturity Date (or such earlier date as the US
Revolving Credit Commitments shall have been terminated entirely) computed at a
rate per annum equal to the Applicable Rate on the average daily excess amount
of the US Revolving Credit Commitments over the US Revolving Credit Exposure.
The commitment fees on the US Revolving Credit Commitments earned from and after
the Closing Date shall be payable in arrears on each Quarterly Date, commencing
on June 30, 2005.
(b) CANADIAN REVOLVING CREDIT COMMITMENTS. The Canadian
Borrowers shall jointly and severally pay to the Canadian Administrative Agent
for the account of and distribution to each Canadian Lender in accordance with
its Canadian Revolving Credit Percentage a commitment fee for the period
commencing on the Closing Date, to and including the Maturity Date (or such
earlier date as the Canadian Revolving Credit Commitments shall have been
terminated entirely) computed at a rate per annum equal to the Applicable Rate
on the average daily excess amount of the Canadian Revolving Credit Commitments
over the Canadian Revolving Credit Exposure. The commitment fees on the Canadian
Revolving Credit Commitments earned from and after the Closing Date shall be
payable in arrears on the Quarterly Date, commencing on June 30, 2005.
(c) US LETTERS OF CREDIT.
(1) As consideration for acting as the Issuing Bank
with respect to any US Letter of Credit, the US Borrowers will jointly
and severally pay to the applicable Issuing Bank a fee computed at a
rate per annum equal to 0.25% on the daily average amount available for
drawing on the applicable Letter of Credit, payable in arrears on the
first Business Day of each calendar month. The US Borrowers shall
jointly and severally pay to the applicable Issuing Bank, with respect
to any issuance, amendment, transfer, or cancellation prior to
expiration of any US Letter of Credit and for each drawing made
thereunder, documentary and processing charges in accordance with such
Issuing Bank's standard schedule for such charges in effect at the time
of, and payable at the time of, such issuance, amendment, transfer,
cancellation or drawing, as the case may be. All fees payable pursuant
to this Section 2.11(c)(1) shall be retained by the applicable Issuing
Bank.
(2) The US Borrowers will jointly and severally pay
to the Administrative Agent for the account of and pro rata
distribution to each US Revolving Lender a fee on the daily average
amount available for drawings under each US Letter of Credit, in each
case for the period from and including the date of issuance of such US
Letter of Credit to and excluding the date of expiration or termination
thereof computed at a per annum rate for each day equal to the
54
Applicable Rate for US Revolving Credit Loans that are Eurodollar Loans
in effect on such day. Such fees shall be payable in arrears on the
first Business Day of each calendar month.
(d) CANADIAN LETTERS OF CREDIT.
(1) As consideration for acting as the Issuing Bank
with respect to any Canadian Letter of Credit, the Canadian Borrowers
will pay to the applicable Issuing Bank a fee computed at a rate per
annum equal to 0.25% on the daily average amount available for drawing
on the applicable Letter of Credit, payable in arrears on the first
Business Day of each calendar month. The Canadian Borrowers shall
jointly and severally pay to the applicable Issuing Bank, with respect
to any issuance, amendment, transfer, or cancellation prior to
expiration of any Canadian Letter of Credit and for each drawing made
thereunder, documentary and processing charges in accordance with such
Issuing Bank's standard schedule for such charges in effect at the time
of, and payable at the time of, such issuance, amendment, transfer,
cancellation or drawing, as the case may be. All fees payable pursuant
to this Section 2.11(d)(1) shall be retained by the applicable Issuing
Bank.
(2) The Canadian Borrowers will jointly and severally
pay to the Canadian Administrative Agent for the account of and pro
rata distribution to each Canadian Lender a fee on the daily average
amount available for drawings under each Canadian Letter of Credit, in
each case for the period from and including the date of issuance of
such Canadian Letter of Credit to and excluding the date of expiration
or termination thereof computed at a per annum rate for each day equal
to the Applicable Rate for Canadian Revolving Credit Loans that are
Eurodollar Loans in effect on such day. Such fees shall be payable in
arrears on the first Business Day of each calendar month.
(e) FEE LETTERS. The US Borrowers shall jointly and severally
pay to JPMorgan, the Administrative Agent and/or certain of their Affiliates
such fees as are set forth in the Fee Letter, as the same has been or may be
hereafter amended or supplemented, on the dates and in the manner specified
therein.
Section 2.12 PAYMENTS, ETC.
(a) WITHOUT SETOFF, ETC. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent (if such payment is made on or in respect of US Loans or US
Commitments) or to the Canadian Administrative Agent (if such payment is made on
or in respect of Canadian Loans or Canadian Commitments) for the account of the
appropriate Lenders without defense, set-off or counterclaim not later than
11:00 a.m. New York, New York time on the date when due and shall be made in
Dollars (unless such payment is a payment of principal or interest on C$
Denominated Loans or Reimbursement Obligations with respect to Canadian Letters
of Credit denominated in C$, in which case such payments shall be in C$) in
immediately available funds at the Payment Office of the appropriate Agent. The
Administrative Agent or the Canadian Administrative Agent will promptly
thereafter distribute funds in the form received relating to the payment of
principal or interest or commitment fees ratably to the appropriate Lenders for
the account of their respective Lending Offices, and funds in the form received
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its applicable Lending Office.
(b) NON-BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the
applicable rate during such extension.
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(c) COMPUTATIONS. All computations of interest shall be made
on the basis of a year of 360 days (unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be) for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent or
the Canadian Administrative Agent of an interest rate or fee hereunder shall,
except for manifest error, be final, conclusive and binding for all purposes,
provided that such determination shall be made in good faith in a manner
generally consistent with the Administrative Agent's or the Canadian
Administrative Agent's standard practice. If the Administrative Agent or the
Canadian Administrative Agent and the Borrowers determine that manifest error
exists, said parties shall correct such error by way of an adjustment to the
next payment due hereunder. For the purposes of the Interest Act (Canada) and
disclosure thereunder, whenever any interest or any 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. 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.
Section 2.13 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that
the Administrative Agent shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) that on any date for determining the LIBO Rate for any
Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank eurodollar market, or any Lender's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of LIBO
Rate, then, and in any such event, the Administrative Agent shall forthwith give
notice (by telephone confirmed in writing) to the Borrowers and to the Lenders
of such determination. Until the Administrative Agent notifies the Borrowers
that the circumstances giving rise to the suspension described herein no longer
exist, the obligations of the Lenders to make Eurodollar Loans shall be
immediately suspended; any Borrowing of Eurodollar Loans that is requested (by
continuation, conversion or otherwise) shall instead be made as a Borrowing of
ABR Loans, and any outstanding Eurodollar Loan shall be converted, on the last
day of the then current Interest Period applicable thereto, to a ABR Loan.
Section 2.14 ILLEGALITY.
(a) DETERMINATIONS OF ILLEGALITY OF EURODOLLAR LOAN. In the
event that any Lender shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance of any
Eurodollar Loan has become unlawful as a result of compliance by such Lender in
good faith with any applicable law, governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), then, in any such event, the Lender shall
give prompt notice (by telephone confirmed in writing) to the Borrowers and to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to the other Lenders).
(b) EURODOLLAR LOANS SUSPENDED. Upon the giving of the notice
to the Borrowers referred to in Section 2.14(a) above, (1) the Borrowers' right
to request (by continuation, conversion or otherwise) and such Lender's
obligation to make Eurodollar Loans shall be immediately suspended, and
thereafter, any requested Borrowing of Eurodollar Loans shall, as to such Lender
only, be deemed to be a request for a ABR Loan, and (2) if the affected
Eurodollar Loan or Loans are then outstanding, the Borrowers shall immediately,
or if permitted by applicable law, no later than the date permitted thereby,
56
upon at least one Business Day's written notice to the Administrative Agent and
the affected Lender, convert each such Eurodollar Loan into a ABR Loan, provided
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this subsection.
(c) DETERMINATIONS OF ILLEGALITY OF DOLLAR DENOMINATED LOANS.
In the event that any Canadian Lender shall have determined (which determination
shall be reasonably exercised and shall, absent manifest error, be final,
conclusive and binding upon all parties) at any time that the making or
continuance of any Dollar Denominated Loan has become unlawful as a result of
compliance by such Canadian Lender in good faith with any applicable law,
governmental rule, regulation, guideline or order (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful),
then, in any such event, the Canadian Lender shall give prompt notice (by
telephone confirmed in writing) to the Canadian Borrowers and to the Canadian
Administrative Agent of such determination (which notice the Canadian
Administrative Agent shall promptly transmit to the other Canadian Lenders).
(d) DOLLAR DENOMINATED LOAN SUSPENDED. Upon the giving of the
notice to the Canadian Borrowers referred to in Section 2.14(c) above, (1) the
Canadian Borrowers' right to request (by continuation, conversion or otherwise)
and such Canadian Lender's obligation to make Dollar Denominated Loans shall be
immediately suspended, and thereafter, any requested Borrowing of Dollar
Denominated Loans shall, as to such Canadian Lender only, be deemed to be a
request for a Canadian Revolving Credit Loan, and (2) if the affected Dollar
Denominated Loan or Loans are then outstanding, the Canadian Borrowers shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Canadian
Administrative Agent and the affected Canadian Lender, convert each such Dollar
Denominated Loan which is a Eurodollar Loan into a B/A Loan and convert each
such Dollar Denominated Loan which is a ABR Loan into a Canadian Prime Rate
Loan, provided that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this subsection.
Section 2.15 INCREASED COSTS.
(a) EURODOLLAR REGULATIONS, ETC. If, by reason of (x) the
introduction of or any change after the date hereof (including, but not limited
to, any change by way of imposition or increase of reserve requirements) in or
in the interpretation of any law or regulation, or (y) the compliance with any
guideline or request issued after the date hereof by any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(1) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect to its
Eurodollar Loans or its obligation to make Eurodollar Loans, or shall
change the basis of taxation of payments to any Lender of the principal
of or interest on its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall
net income or gross receipts of such Lender or its applicable Lending
Office imposed by the jurisdiction in which such Lender's principal
executive office or applicable Lending Office is located); or
(2) any reserve (including, but not limited to, any
imposed by the Board of Governors of the Federal Reserve System, but
excluding any such reserve requirement that is reflected in the
Adjusted LIBO Rate), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Lender or its applicable Lending Office shall be imposed or deemed
applicable or any other condition affecting its Eurodollar Loans or its
obligations to make Eurodollar Loans shall be imposed on any Lender or
its
57
applicable Lending Office or the interbank Eurodollar Loan market or
the secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Loans (except
to the extent already included in the determination of the applicable Adjusted
LIBO Rate) or there shall be a reduction in the amount received or receivable by
such Lender or its applicable Lending Office, then the applicable Borrowers
shall from time to time, upon written notice from and demand by such Lender
(with a copy of such notice and demand to the Administrative Agent), pay to such
Lender on demand additional amounts determined by such Lender in a reasonable
manner to be sufficient to indemnify such Lender against such increased cost;
provided that, the Borrowers shall not be required to compensate any Lender
pursuant to this Section 2.15(a) for any amounts incurred more than six months
prior to the date that such Lender notifies such Borrowers of such Lender's
intention to claim compensation therefor; and provided further that (A) if the
circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect, and (B) the limitation set forth in this proviso shall not apply to
amounts already included in the determination of the applicable Adjusted LIBO
Rate. A certificate as to the amount of such increased cost and the calculation
thereof, submitted to the Borrowers and the Administrative Agent by such Lender,
shall, except for manifest error, be final, conclusive and binding for all
purposes.
(b) COSTS. If any Lender shall advise the Administrative Agent
or the Canadian Administrative Agent that at any time, because of the
circumstances described in clauses (x) or (y) in Section 2.15(a) or any other
circumstances affecting such Lender or the London interbank market or such
Lender's position in such market, the Adjusted LIBO Rate, as determined in good
faith by the Administrative Agent or the Canadian Administrative Agent, will not
adequately and fairly reflect the cost to such Lender of funding its Eurodollar
Loans, then, and in any such event:
(1) the Administrative Agent or the Canadian
Administrative Agent shall forthwith give notice (by telephone
confirmed in writing) to the Borrowers and to the Lenders of such
advice;
(2) the Borrowers' right to request a Borrowing of
Eurodollar Loans from such Lender and such Lender's obligation to make
Eurodollar Loans shall be immediately suspended, any such Borrowing of
Eurodollar Loans that is requested (by continuation, conversion or
otherwise) shall, as to such Lender only, be deemed to be a request for
a ABR Loan, and any such outstanding Eurodollar Loan from such Lender
shall be converted, on the last day of the then current Interest Period
applicable thereto, to a ABR Loan.
(c) CAPITAL ADEQUACY. If by reason of (1) the introduction of
or any change after the date hereof (including, but not limited to, any change
by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (2) the compliance with any
guideline or request issued by any central bank or other governmental authority
or quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law), affects or
would affect the amount of capital required to be maintained by any Lender or
any corporation controlling such Lender, and the amount of such capital is
increased by or based upon the existence of such
58
Lender's Loans or such Lender's Commitment hereunder and other commitments to
lend or of the Letters of Credit (or similar contingent obligations), then, upon
written request therefor by such Lender (with a copy of such request to the
Administrative Agent), the applicable Borrowers shall pay to such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for the increased cost of such additional capital in
light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender's Loans or such Lender's commitment to lend hereunder or to the issuance
or maintenance of the Letters of Credit and such Lender is generally charging
such costs to other similarly situated borrowers under similar credit
facilities; provided, that, the Borrowers shall not be required to compensate
any Lender pursuant to this Section 2.15(c) for any amounts incurred more than
six months prior to the date that such Lender notifies such Borrowers of such
Lender's intention to claim compensation therefor; and provided, further, that,
if the circumstances giving rise to such claim have a retroactive effect, then
such six-month period shall be extended to include the period of such
retroactive effect. A certificate as to such amounts and the calculation
thereof, submitted to the Borrowers and the Administrative Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(d) ISSUING BANK. The rights and benefits of the Lenders under
this Section 2.15 shall also apply to any Issuing Bank in its capacity as such.
Section 2.16 CHANGE OF LENDING OFFICE. Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
any of its Eurodollar Loans affected by the matters or circumstances described
in Section 2.13, Section 2.14 or Section 2.15 to reduce the liability of the
Borrowers or avoid the results provided thereunder, so long as such designation
is not disadvantageous to such Lender as determined by such Lender in its sole
discretion; provided, that, such Lender shall have no obligation to so designate
an alternate Lending Office located in the United States.
Section 2.17 FUNDING LOSSES. Each of the Borrowers shall compensate
each Lender, upon its written request (which request shall set forth the basis
for requesting such amounts and shall, absent manifest error, be final,
conclusive and binding upon all of the parties hereto), for all losses, expenses
and liabilities (including, but not limited to, any interest paid by such Lender
to lenders of funds borrowed by it to make or carry its Eurodollar Loans or B/A
Loans to such Borrowers to the extent not recovered by the Lender in connection
with the re-employment of such funds) ("LOSSES"), which the Lender may sustain:
(a) if for any reason (other than a default by such Lender) a Borrowing of
Eurodollar Loans or B/A Loans does not occur on the date specified therefor in a
Borrowing Request (whether or not withdrawn), including, but not limited to a
failure by the applicable Borrowers to fulfill on the date of any Borrowing of
Eurodollar Loans or B/A Loans the conditions set forth in Article 3, or to
convert, continue any Eurodollar Loan or B/A Loan hereunder after irrevocable
notice of such conversion or continuation has been given pursuant to Section
2.10; (b) if any payment, prepayment or conversion of any of its Eurodollar
Loans or B/A Loans required or permitted by any other provision of this
Agreement or otherwise, or any assignment of a Eurodollar Loan or B/A Loan
pursuant to Section 2.21, in each case is made or deemed made on a date which is
not the last day of the Interest Period or Contract Period applicable thereto;
or (c) if, for any reason, either of the Borrowers defaults in their obligation
to repay its Eurodollar Loans or B/A Loans or roll over or interest accrued
thereon as and when due and payable (at the due date thereof, whether at
scheduled maturity, by acceleration, irrevocable notice of prepayment or
otherwise). Notwithstanding the foregoing, the Canadian Borrowers shall not be
required to compensate any US Lender in respect of losses arising with respect
to US Loans.
Section 2.18 SHARING OF PAYMENTS, ETC.
(a) If any US Revolving Lender shall obtain any payment or
reduction (including, but not limited to, any amounts received as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code) of
any obligations of the US Borrowers hereunder (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
ratable share of payments or reductions on account of such obligations obtained
by all the US Revolving Lenders, such US Revolving Lender shall forthwith (1)
notify each of the other US Revolving Lenders and the Administrative Agent of
such receipt, and (2) purchase from the other US Revolving Lenders such
participations in the affected obligations as shall be necessary to cause such
purchasing US Revolving
59
Lender to share the excess payment or reduction, net of costs incurred in
connection therewith, ratably with each of them, provided, that, if all or any
portion of such excess payment or reduction is thereafter recovered from such
purchasing US Revolving Lender or additional costs are incurred, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery or such additional costs, but without interest. The US Borrowers agree
that any US Revolving Lender so purchasing a participation from another US
Revolving Lender pursuant to this Section 2.18 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such US Revolving
Lender were the direct creditor of the US Borrowers in the amount of such
participation.
(b) If any Canadian Lender shall obtain any payment or
reduction of any obligation of the Canadian Borrowers hereunder (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share of payments or reductions on account
of such obligations obtained by all the Canadian Lenders, such Canadian Lender
shall forthwith (1) notify each of the other Canadian Lenders and the Canadian
Administrative Agent of such receipt, and (2) purchase from the other Canadian
Lenders such Participations in the affected obligations as shall be necessary to
cause such purchasing Canadian Lender to share the excess payment or reduction,
net of costs incurred in connection therewith, ratably with each of them,
provided, that, if all or any portion of such excess payment or reduction is
thereafter recovered from such purchasing Canadian Lender or additional costs
are incurred, the purchase shall be rescinded and the purchase price restored to
the extent of such recovery or such additional costs, but without interest. The
Canadian Borrowers agree that any Canadian Lender so purchasing a participation
from another Canadian Lender pursuant to this Section 2.18 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of set-off) with respect to such participation as fully as if such Canadian
Lender were the direct creditor of the Canadian Borrowers in the amount of such
participation.
Section 2.19 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by or on
account of any obligation of any of the Borrowers hereunder shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided, that, if any of the Borrowers shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (1) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.19) the Administrative Agent, the Canadian Administrative Agent, the Lenders
or the Issuing Banks (as the case may be) receive an amount equal to the sum
they would have received had no such deductions been made, (2) the applicable
Borrowers shall make such deductions, and (3) such Borrowers shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) OTHER TAXES. In addition, the applicable Borrowers shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) INDEMNIFICATION. Each of the Borrowers shall indemnify the
Administrative Agent, the Canadian Administrative Agent, each Lender and each
Issuing Bank, upon written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, the Canadian
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of such
Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.19) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or
60
liability delivered to the applicable Borrowers by a Lender or an Issuing Bank,
or by the Administrative Agent or the Canadian Administrative Agent, as
applicable, on its own behalf or on behalf of a Lender or an Issuing Bank, shall
be conclusive absent manifest error. Notwithstanding the foregoing, the Canadian
Borrowers shall not be required to indemnify any US Lender in respect of any
Indemnified Taxes or Other Taxes arising with respect to US Loans.
(d) RECEIPTS. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any of the Borrowers to a Governmental
Authority, such Borrowers shall deliver to the Administrative Agent or the
Canadian Administrative Agent, as applicable, the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) SURVIVAL. Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations contained in this
Section 2.19 shall survive the payment in full of principal and interest
hereunder.
(f) LENDER REPRESENTATIONS AND AGREEMENTS. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax under the
law of the jurisdiction in which any Borrower is located, or any treaty to which
such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to the US Borrowers (with a copy to the Administrative Agent), at
the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law or reasonably requested by
the US Borrowers as will permit such payments to be made without withholding or
at a reduced rate.
(g) REFUNDS. If any Borrower pays any additional amount under
this Section 2.19 to a Lender and such Lender determines in its sole discretion
that it has actually received or realized in connection therewith any refund or
any reduction of, or credit against, its Tax liabilities in or with respect to
the taxable year in which the additional amount is paid (a "TAX BENEFIT"), such
Lender shall pay to such Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was obtained
by the Lender in such year as a consequence of such Tax Benefit; provided,
however, that (i) any Lender may determine, in its sole discretion consistent
with the policies of such Lender, whether to seek a Tax Benefit; (ii) any Taxes
that are imposed on a Lender as a result of a disallowance or reduction
(including through the expiration of any tax credit carryover or carryback of
such Lender that otherwise would not have expired) of any Tax Benefit with
respect to which such Lender has made a payment to such Borrower pursuant to
this Section 2.19 shall be treated as a tax for which such Borrower is obligated
to indemnify such Lender pursuant to this Section 2.19 without any exclusions or
defenses; and (iii) nothing in this Section 2.19(g) shall require the Lender to
disclose any confidential information to any Borrower (including, without
limitation, its tax returns).
(h) LIMITATION ON GROSS UP FOR CERTAIN CANADIAN PARTIES.
Canadian Borrowers shall not be obligated to make any payment to or for the
account of any Canadian Lender or Canadian Administrative Agent pursuant to this
Section 2.19 to the extent such Canadian Administrative Agent or Canadian Lender
(or its applicable Lending Office) is a non-resident of Canada for purposes of
the Income Tax Act (Canada) unless such Canadian Administrative Agent or
Canadian Lender (or Lending Office) ceases to be a resident of Canada for
purposes of the Income Tax Act (Canada) as a result of a change of law occurring
after the date such Person became the Canadian Administrative Agent or Canadian
Lender (or after the date of designation of such Lending Office).
Section 2.20 PRO RATA TREATMENT. Subject to Section 2.4(b) each
Borrowing of US Revolving Credit Loans shall be made, each payment on account of
any commitment fee in respect of the
61
US Revolving Credit Commitments hereunder shall be allocated by the
Administrative Agent, and any reduction of the US Revolving Credit Commitments
of the US Revolving Lenders shall be allocated by the Administrative Agent, pro
rata according to the relevant US Revolving Credit Percentages of the US
Revolving Lenders. Subject to Section 2.4(b), each payment (including each
prepayment) on account of principal of and interest on any US Revolving Credit
Loans shall be allocated by the Administrative Agent pro rata according to the
respective outstanding principal amounts of such US Revolving Credit Loans then
held by the US Revolving Lenders. Subject to Section 2.4(b), each Borrowing of
Canadian Revolving Credit Loans shall be made, each payment on account of any
commitment fee in respect of the Canadian Revolving Credit Commitments hereunder
shall be allocated by the Canadian Administrative Agent, and any reduction of
the Canadian Revolving Credit Commitments of the Canadian Lenders shall be
allocated by the Canadian Administrative Agent, pro rata according to the
relevant Canadian Revolving Credit Percentages of the Canadian Lenders. Subject
to Section 2.4(b), each payment (including each prepayment) on account of
principal of and interest on any Canadian Revolving Credit Loans shall be
allocated by the Canadian Administrative Agent pro rata according to the
respective outstanding principal amounts of such Canadian Revolving Credit Loans
then held by the Canadian Lenders.
Section 2.21 REPLACEMENT OF LENDERS. If any Lender does not make a
Eurodollar Loan pursuant to Section 2.14, seeks indemnification for increased
costs pursuant to Section 2.15, fails to designate an alternate Lending Office
pursuant to Section 2.16, or is owed or reasonably anticipates being owed
additional amounts pursuant to Section 2.19, the Borrowers shall have the right,
if no Default then exists, to replace such Lender with another bank or financial
institution with the consent of the Administrative Agent and the Canadian
Administrative Agent, which consent shall not be unreasonably withheld, provided
that (a) the obligations of the Borrowers owing hereunder or under any other
Financing Document to the Lender being replaced (including such increased costs)
that are not being assigned to the replacement lender shall be paid in full to
the Lender being replaced concurrently with such replacement lender, (b) the
replacement lender shall execute an Assignment and Assumption pursuant to which
it shall become a party hereto as provided in Section 10.7, and (c) upon
compliance with the provisions for assignment provided in Section 10.7 and the
payment of amounts referred to in clause (a), the replacement lender shall
constitute a "Lender" hereunder and the Lender being so replaced shall no longer
constitute a "Lender" hereunder.
Section 2.22 ADVANCES OF REVOLVING CREDIT LOANS TO SATISFY LENDER
INDEBTEDNESS. Each of the Borrowers and each Lender hereby agree with the
Administrative Agent, the Canadian Administrative Agent and each other Lender
that, on each date on which any payment of interest, fees, principal or other
amounts are due and owing hereunder or under any of the other Financing
Documents, the Administrative Agent or the Canadian Administrative Agent may, in
its sole discretion, but without any obligation to do so and subject to all
other terms of this Agreement (other than any request for delivery of a
Borrowing Request hereunder) cause a Borrowing of (a) US Swingline Loans to the
extent of the remaining US Swingline Availability, and thereafter such
Borrowings shall be US Revolving Credit Loans which shall be ABR Loans, or (b)
Dollar Denominated Canadian Revolving Credit Loans which shall be ABR Loans,
each to be made on such date in an amount sufficient to satisfy in full all such
payments of interest, fees or other amounts which are then due hereunder and,
subject to Section 2.7(i) with respect to the Canadian Lenders, the
Administrative Agent or the Canadian Administrative Agent shall disburse the
proceeds of such Borrowing to each other Agent and Lender to satisfy all such
obligations and liabilities which are then due and the Administrative Agent or
the Canadian Administrative Agent shall give the Borrowers prompt notice of any
such Advances. Notwithstanding the foregoing, neither the Administrative Agent
nor the Canadian Administrative Agent shall be permitted to cause a Borrowing of
Canadian Revolving Credit Loans to satisfy any Lender Indebtedness which is not
Canadian Lender Indebtedness.
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Section 2.23 JOINT AND SEVERAL LIABILITY OF US BORROWERS; RIGHTS OF
CONTRIBUTION AMONG US BORROWERS.
(a) Each US Borrower states and acknowledges that: (1)
pursuant to this Agreement, the US Borrowers desire to utilize their borrowing
potential on a consolidated basis to the same extent possible if they were
merged into a single corporate entity; (2) each US Borrower has determined that
it will benefit specifically and materially from the advances of credit
contemplated by this Agreement; (3) it is both a condition precedent to the
obligations of the Administrative Agent, the Canadian Administrative Agent and
Lenders hereunder and a desire of each US Borrower that each US Borrower execute
and deliver to Lender this Agreement; and (4) each US Borrower has requested and
bargained for the structure and terms of and security for the advances
contemplated by this Agreement.
(b) Each US Borrower hereby irrevocably and unconditionally:
(i) agrees that it is jointly and severally liable to the Administrative Agent
and the Lenders for the full and prompt payment and performance of the
obligations of each Borrower under this Agreement and each other Financing
Document that may specify that a particular Borrower is responsible for a given
payment or performance; (ii) agrees to fully and promptly perform all of its
obligations hereunder with respect to each advance of credit hereunder as if
such advance had been made directly to it; and (iii) agrees as a primary
obligation to indemnify the Administrative Agent, the Canadian Administrative
Agent and each Lender, on demand for and against any loss incurred by the
Administrative Agent, the Canadian Administrative or any Lender as a result of
any of the obligations of any Borrower (the "SUBJECT BORROWER") being or
becoming void, voidable, unenforceable or ineffective for any reason whatsoever,
whether or not known to the subject Borrower or any Person, the amount of such
loss being the amount which the Administrative Agent, the Canadian
Administrative Agent or the Lenders (or any of them) would otherwise have been
entitled to recover from the Borrower.
(c) It is the intent of each US Borrower that the
indebtedness, obligations and liabilities hereunder and under the other
Financing Documents of no one of them be subject to challenge on any basis
related to any federal or state law dealing with fraudulent conveyances or any
other law related to transfers for less than fair or reasonably equivalent
value. Accordingly, as of the date hereof, the liability of each US Borrower
under this Section 2.23 together with all of its other liabilities to all
persons as of the date hereof and as of any other date on which a transfer is
deemed to occur by virtue of this Agreement, calculated in amount sufficient to
pay its probable net liabilities on its existing indebtedness as the same become
absolute and matured ("DATED LIABILITIES") is and is to be, less than the amount
of the aggregate of a fair valuation of its property as of such corresponding
date ("DATED ASSETS"). To this end, each US Borrower under this Section 2.23 (i)
grants to and recognizes in each other US Borrower ratably, rights of
subrogation and contribution in the amount, if any, by which the Dated Assets of
such US Borrower, but for the aggregate rights of subrogation and contribution
in its favor recognized herein, would exceed the Dated Liabilities of such US
Borrower and (ii) acknowledges receipt of and recognizes its right to
subrogation and contribution ratably from the other US Borrowers in the amount,
if any, by which the Dated Liabilities of such US Borrower, but for the
aggregate of subrogation and contribution in its favor recognized herein, would
exceed the Dated Assets of such US Borrower under this Section 2.23. In
recognizing the value of the Dated Assets and the Dated Liabilities, it is
understood that each US Borrower will recognize, to at least the same extent of
their aggregate recognition of liabilities hereunder, their rights to
subrogation and contribution hereunder. It is a material objective of this
Section 2.23 that each US Borrower recognizes rights to subrogation and
contribution rather than be deemed to be insolvent (or in contemplation thereof)
by reason of an arbitrary interpretation of its joint and several obligations
hereunder.
(d) Each US Borrower agrees and acknowledges that the present
structure of the credit facilities detailed in this Agreement is based in part
upon the financial and other information
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presently known to the Administrative Agent, the Canadian Administrative Agent
and the Lenders regarding each Borrower, the corporate structure of the
Borrowers, and the present financial condition of each Borrower. Upon or after
the occurrence of an Event of Default under Section 8.1 or Section 8.2 and so
long as it is continuing, each US Borrower hereby agrees that the Required
Lenders shall have the right, in their sole credit judgment, to require that any
or all of the following changes be made to these credit facilities: (1) further
restrict loans and advances between the Borrowers, (2) establish separate
lockbox and Blocked Accounts for each US Borrower, (3) separate the US Swingline
Loans and US Revolving Credit Loans into separate revolving credit loans to each
of the US Borrowers as shall be determined by the Required Lenders, and (4)
establish such other procedures as shall be reasonably deemed by the Required
Lenders to be useful in tracking where Loans are made under this Agreement and
the source of payments received by the Lenders on such Loans.
Section 2.24 PARTICIPATIONS IN US SWINGLINE LOANS. The US Swingline
Lender may by written notice given to the Administrative Agent not later than
10:00 a.m. (New York, New York time), on any Business Day require the US
Revolving Lenders to acquire participations within one (1) Business Day in all
or a portion of the US Swingline Loans outstanding. Such notice to the
Administrative Agent shall specify the aggregate amount of US Swingline Loans in
which the US Revolving Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each US Revolving
Lender, specifying in such notice such Lender's US Revolving Credit Percentage
of such US Swingline Loan or Loans. Each US Revolving Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above in this
paragraph, to pay to the Administrative Agent, for account of the US Swingline
Lender, such US Revolving Lender's US Revolving Credit Percentage of such US
Swingline Loan or Loans. Each US Revolving Lender acknowledges and agrees that
its obligation to acquire participations in US Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or Event of Default or reduction or termination of the Aggregate US Revolving
Credit Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each US Revolving Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.4(a) with respect
to Loans made by such US Revolving Lender (and Section 2.4(a) shall apply,
mutatis mutandis, to the payment obligations of the US Revolving Lenders), and
the Administrative Agent shall promptly pay to the US Swingline Lender the
amounts so received by it from the US Revolving Lenders. The Administrative
Agent shall notify the US Borrowers of any participations in any US Swingline
Loan acquired pursuant to this paragraph, and thereafter payments in respect of
such US Swingline Loan shall be made to the Administrative Agent and not to the
US Swingline Lender. Any amounts received by the US Swingline Lender from the US
Borrower (or other party on behalf of the US Borrower) in respect of a US
Swingline Loan after receipt by the US Swingline Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the US Lenders that shall have made
their payments pursuant to this paragraph and to the US Swingline Lender, as
their interests may appear. The purchase of participations in a US Swingline
Loan pursuant to this paragraph shall not relieve the US Borrowers of any
default in the payment thereof.
Section 2.25 INCREASE OF COMMITMENTS.
(a) If no Default, Event of Default or Material Adverse Effect
shall have occurred and be continuing, the Borrowers may at any time prior to
the Maturity Date request an increase of the US Revolving Credit Commitments or
Canadian Revolving Credit Commitments by notice to the Administrative Agent and
the Canadian Administrative Agent in writing of the amount of such proposed
increase (such notice, a "COMMITMENT INCREASE NOTICE"); provided, however, that
(1) neither the US Revolving Credit Commitment nor the Canadian Revolving Credit
Commitment of any Lender may be
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increased without such Lender's consent, and (2) the aggregate amount of the
Revolving Credit Commitments as so increased shall not exceed $450,000,000. Any
such Commitment Increase Notice delivered with respect to any proposed increase
in the US Revolving Credit Commitments must offer each US Revolving Lender an
opportunity to subscribe for its Applicable Percentage of the increased US
Revolving Credit Commitments. Any such Commitment Increase Notice delivered with
respect to any proposed increase in the Canadian Revolving Credit Commitments
must offer each Canadian Lender an opportunity to subscribe for its Applicable
Percentage of the increased Canadian Revolving Credit Commitments. The
Administrative Agent or the Canadian Administrative Agent, as applicable, shall,
within five (5) Business Days after receipt of a Commitment Increase Notice,
notify each Lender of such request. Each Lender desiring to increase its US
Revolving Credit Commitment or Canadian Revolving Credit Commitment (as
applicable) shall notify the applicable Agent in writing no later than ten (10)
Business Days after receipt of notice from such Agent. Any Lender that does not
notify the applicable Agent within the time period specified above that it will
increase its US Revolving Credit Commitment or Canadian Revolving Credit
Commitment will be deemed to have rejected such offer. Any agreement by a Lender
to increase its US Revolving Credit Commitment or Canadian Revolving Credit
Commitment shall be irrevocable.
(b) If any proposed increase in the US Revolving Credit
Commitments or Canadian Revolving Credit Commitments is not fully subscribed by
the existing Lenders pursuant to the procedure outlined in clause (a) preceding,
the Borrowers may, in their sole discretion, but with the consent of the
Administrative Agent or the Canadian Administrative Agent, as applicable, as to
any Person that is not at such time a Lender (which consent shall not be
unreasonably withheld or delayed), offer to any existing Lender or to one or
more additional banks or financial institutions the opportunity to participate
in all or a portion of such unsubscribed portion of the increased US Revolving
Credit Commitments or Canadian Revolving Credit Commitments, by notifying the
Administrative Agent or the Canadian Administrative Agent, as applicable;
provided that the US Revolving Credit Commitment or Canadian Revolving Credit
Commitment of any new Lender shall not be less than $25,000,000 and shall be in
an integral multiple of $5,000,000. Promptly and in any event within five (5)
Business Days after receipt of notice from the Borrowers of their desire to
offer such unsubscribed commitments to certain existing Lenders or to the
additional banks or financial institutions identified therein, the
Administrative Agent or the Canadian Administrative Agent, as applicable shall
notify such proposed lenders of the opportunity to participate in all or a
portion of such unsubscribed portion of the increased US Revolving Credit
Commitments or Canadian Revolving Credit Commitments.
(c) Any existing Lender that accepts Borrowers' offer to
increase its US Revolving Credit Commitment or Canadian Revolving Credit
Commitment shall execute a Commitment Increase Agreement with the applicable
Borrowers and Agent, whereupon such Lender shall be bound by, and entitled to
the benefits of, this Agreement with respect the full amount of its US Revolving
Credit Commitment or Canadian Revolving Credit Commitment, as applicable, as so
increased.
(d) Any additional bank or financial institution which is not
an existing Lender and which accepts Borrowers' offer to participate in the
increased US Revolving Credit Commitments or Canadian Revolving Credit
Commitments shall execute and deliver to the applicable Agent and Borrower a New
Lender Agreement setting forth its US Revolving Credit Commitment or Canadian
Revolving Credit Commitment (subject to the limitations on the amounts thereof
set forth herein), and upon the effectiveness of such New Lender Agreement such
bank or financial institution (a "NEW LENDER") shall become a US Revolving
Lender or Canadian Revolving Lender, as applicable, for all purposes and to the
same extent as if originally a party hereto and shall be bound by and entitled
to the benefits of this Agreement, and the signature pages hereof shall be
deemed to be amended to add the name of such New Lender.
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(e) Upon any increase in the US Revolving Credit Commitments
or Canadian Revolving Credit Commitments pursuant to this Section 2.25, Annex I
shall be deemed amended to reflect the US Revolving Credit Commitment or
Canadian Revolving Credit Commitment of each Lender (including any New Lender)
as thereby increased.
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 CLOSING. The obligation of each Lender to make its initial
Revolving Credit Loan and initial US Swingline Loan and such Issuing Bank to
issue its initial Letter of Credit hereunder, is subject to (x) receipt by the
Administrative Agent of the following items which are to be delivered, in form
and substance satisfactory to each Lender, with a copy (except for this
Agreement) for each Lender and (y) the satisfaction of the following conditions:
(a) NOTES. To the extent requested by a Lender pursuant to
Section 2.7(l) duly completed and executed promissory notes to evidence the
Loans made by such Lender, dated as of the Closing Date, and payable to the
order of such Lender.
(b) RESOLUTIONS AND INCUMBENCY CERTIFICATES.
(1) certified copies of the resolutions of the Board
of Directors (or comparable authority) of each Obligated Party dated as
of the Closing Date and approving, as appropriate, the Loans, this
Agreement, the other Financing Documents, and all other documents, if
any, in each case being executed and delivered as of the Closing Date,
in connection with this Agreement to which such Obligated Party is a
party and evidencing corporate (or other organizational) authorization
with respect to such documents; and
(2) a certificate of the Secretary or an Assistant
Secretary of each Obligated Party dated as of the Closing Date and
certifying (A) the name, title and true signature of each officer of
such Person authorized to execute this Agreement, Applications and the
other Financing Documents to which such Obligated Party is a party, (B)
the name, title and true signature of each officer of such Person
authorized to provide the certifications required pursuant to this
Agreement including, but not limited to, certifications required
pursuant to Section 6.10, Borrowing Requests, and Borrowing Base
Reports, and (C) that attached thereto is a true and complete copy of
(i) the certificate or articles of incorporation, certificate or
articles of organization, certificate of limited partnership, or
comparable charter documents, certified by the appropriate Governmental
Authority of the jurisdiction of incorporation or organization of such
Obligated Party, (ii) the bylaws, regulations, partnership agreement,
or comparable charter documents of such Obligated Party, each as
amended to date, (iii) recent good standing certificates and
certificates of existence for such Obligated Party, and (iv)
certificates of foreign qualification for such Obligated Party in such
jurisdictions as the Administrative Agent shall require.
(3) certain letter agreements certifying to the names
and signatures of officers of the Borrowers authorized to issue
Borrowing Requests, issue Borrowing Base Reports, initiate wire
transfers and take other actions with respect to the credit facilities
contemplated hereby.
(c) OPINIONS OF COUNSEL.
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(1) Opinion of Gallop, Xxxxxxx & Xxxxxx, counsel to
each Obligated Party, dated as of the Closing Date and addressed to the
Administrative Agent, the Issuing Banks and the Lenders and covering
such matters as the Administrative Agent, the Issuing Banks or the
Lenders may reasonably request.
(2) An opinion of Xxxxxxx Xxxxx LLP, Alberta counsel
to the Canadian Borrowers dated as of the Closing Date addressed to the
Administrative Agent, the Canadian Administrative Agent, the Issuing
Banks and the Lenders and covering such matters as the Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks or the
Lenders may reasonably request;
(3) An opinion of Xxxxxxx XxXxxxxx Sticling Xxxxxx,
Nova Scotia counsel to the Canadian Borrowers dated as of the Closing
Date addressed to the Administrative Agent, the Canadian Administrative
Agent, the Issuing Banks and the Lenders and covering such matters as
the Administrative Agent, the Canadian Administrative Agent, the
Issuing Banks or the Lenders may reasonably request; and
(4) Opinions of counsel to the US Borrower in each
state in which Mortgaged Real Property is located, dated as of the
Closing Date, addressed to the Administrative Agent, the Issuing Banks
and the Lenders favorably opining to the enforceability of such US Real
Estate Mortgage and covering such other matters as the Administrative
Agent, the Issuing Banks or the Lenders may reasonably request.
(d) THE SECURITY INSTRUMENTS; PERFECTION OF LIENS IN THE
COLLATERAL.
(1) the Guaranty and Security Agreement, dated as of
the Closing Date and duly executed by each US Borrower;
(2) The Canadian Security Agreement, dated as of the
Closing Date and duly executed by each Canadian Borrower;
(3) duly executed Real Estate Mortgages with respect
to all Mortgaged Real Property duly executed and delivered by the
Borrower owning such Mortgaged Real Property;
(4) a Landlord's Consent and Subordination Agreement
duly executed by each landlord with respect to all Mortgaged Real
Property in which a Borrower holds a leasehold interest;
(5) a Landlord's Waiver duly executed by each
landlord with respect to all Real Property leased by a Borrower which
is not Mortgaged Real Property (except to the extent no Eligible
Equipment or Eligible Inventory is located at such Real Property or a
Rent Reserve has been established with respect to such Real Property);
(6) Deposit Account Control Agreements (as defined in
the Guaranty of Security Agreement) with respect to each deposit
account maintained by a US Borrower duly executed by such US Borrower
and by the depository bank at which such accounts are maintained;
(7) a Securities Account Control Agreement (as
defined in the Guaranty and Security Agreement) with respect to each
securities account maintained by a US Borrower duly executed by such US
Borrower and the brokerage firm at which such accounts are maintained;
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(8) the Canadian Blocked Account Agreement duly
executed by each Canadian Borrower, Canadian Lockbox Bank and Canadian
Administrative Agent establishing the Canadian Lockbox;
(9) original stock certificates evidencing all Equity
owned by each Borrower to the extent such Equity is evidenced by a
certificate, in each case accompanied by duly executed corresponding
stock powers;
(10) all Property in which the Administrative Agent
or the Canadian Administrative Agent shall, at such time, be entitled
to have a Lien pursuant to this Agreement or any other Financing
Document shall have been physically delivered to the possession of the
Administrative Agent or the Canadian Administrative Agent to the extent
that such possession is necessary for the purpose of perfecting the
Administrative Agent's or the Canadian Administrative Agent's Lien in
such Collateral;
(11) Bailee Letters with respect to each location at
which a Borrower holds inventory as of the Closing Date which location
is not owned or leased by such Borrower;
(12) UCC-1 Financing Statements naming each US
Borrower as Debtor and the Administrative Agent as Secured Party
describing the Collateral, each of which shall have been duly filed in
each jurisdiction as the Administrative Agent shall require; and
(13) such other documents, instruments and agreements
and other actions as the Administrative Agent shall require in its sole
discretion to fully create, evidence, register and perfect the
Administrative Agent's Liens in the Collateral securing the Lender
Indebtedness.
(e) INSURANCE. Copies of all insurance binders, together with
a certificate of insurance coverage, dated as of the Closing Date, evidencing
that the Credit Parties are carrying insurance in accordance with Section 6.5
hereof.
(f) CERTIFICATE OF RESPONSIBLE OFFICER. Certificate of a
Responsible Officer of Borrowers acceptable to the Lenders dated as of the
Closing Date certifying that (1) each Credit Party is Solvent both before and
after giving effect to the consummation of the Target Acquisition and the
incurrence of Indebtedness to finance such acquisition, (2) no Default or Event
of Default exists or will exist after giving effect to the Closing Transactions,
(3) each representation and warranty contained herein and in the other Financing
Documents is true and correct both before and after giving effect to the Closing
Transactions, and (4) each condition precedent contained in this Section 3.1 and
Section 3.2 has been satisfied (subject only to the funding and application of
the initial Borrowing to be made hereunder).
(g) LIEN SEARCHES. Lien searches reflecting no prior Liens on
the Collateral other than Liens set forth on Schedule 7.3.
(h) BORROWING BASE REPORT. A Borrowing Base Report prepared as
of a date no earlier than 20 days prior to the Closing Date setting forth the US
Borrowing Base and the Canadian Borrowing Base to be in effect under this
Agreement on the Closing Date, and reflecting that, after giving effect to the
consummation of the transactions contemplated herein, including the Target
Acquisition and the initial Borrowing hereunder, the Collateral Availability
shall not be less than $100,000,000. It is understood that this condition
contemplates that all existing Indebtedness of the Credit Parties not permitted
to remain outstanding under Section 7.2 has been prepaid and Indebtedness and
other obligations are current, and that all accounts payable are being handled
in the normal course of the Borrowers' business consistent with its past
practices.
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(i) SURVEYS. Surveys in form and substance acceptable to the
Administrative Agent with respect to all Mortgaged Real Property.
(j) TITLE COMMITMENT. A Commitment for a Mortgagee's Policy of
Title Insurance ("TITLE COMMITMENTS"), in form and substance satisfactory to the
Administrative Agent with respect to all Mortgaged Real Property, together with
evidence satisfactory to the Administrative Agent that the Mortgagees's Policies
of Title Insurance to be issued pursuant to such Title Commitments will be
issued pursuant to each such Title Commitment and all premiums therefore have
been paid.
(k) FINANCIAL STATEMENTS AND PROJECTIONS. The financial
condition of the Credit Parties reflected in the Financial Statements and the
other financial information and Projections of the Credit Parties shall not have
changed as of the Closing Date in such a way as to cause or result in a Material
Adverse Effect (after giving effect to the consummation of the Target
Acquisition).
(l) CASH MANAGEMENT ARRANGEMENTS. The Administrative Agent
shall be satisfied in its sole discretion with all aspects of each Borrower's
cash management arrangements.
(m) FEES AND EXPENSES. Payment and/or reimbursement of (1) the
Administrative Agent's and the Canadian Administrative Agent's counsel's fees
and expenses rendered through the Closing Date, to the extent invoiced, and (2)
any fees or expenses required to be paid pursuant to the Fee Letter.
(n) REPRESENTATIONS AND WARRANTIES. Each representation and
warranty of each Obligated Party contained herein and in each of the other
Financing Documents shall be true and correct.
(o) TARGET ACQUISITION. Subject only to the disbursement and
application of the initial Borrowing, the Target Acquisition shall have occurred
(or the Administrative Agent shall be satisfied that such transactions shall
occur concurrently with such disbursement and funding).
(p) REPAYMENT AND TERMINATION OF EXISTING CREDIT AGREEMENT.
Subject only to the disbursement and application of the initial Borrowing, all
Lender Indebtedness under and as defined in the Existing Credit Agreement shall
have been paid in full, and Borrowers shall have delivered irrevocable notice to
the Administrative Agent and Canadian Administrative Agent under the Existing
Credit Agreement terminating the Commitments under the Existing Credit Agreement
pursuant to Section 2.10 of the Existing Credit Agreement.
(q) OTHER DOCUMENTATION. The Administrative Agent shall have
received such other documents as the Administrative Agent (or any Lender acting
through the Administrative Agent) may reasonably request, all in form and
substance reasonably satisfactory to the Administrative Agent to the
Administrative Agent and Canadian Administrative Agent under the Existing Credit
Agreement.
Section 3.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT.
The obligation of each Lender to make each Loan hereunder (including the initial
Loan) and the obligation of each Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit) is subject to fulfillment of the
following conditions immediately prior to or contemporaneously with each such
Loan or issuance:
(a) REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained herein and in the other Financing Documents executed and
delivered on or after the Closing Date shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Loan (unless such representation and
warranty is expressly limited to an earlier date).
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(b) NO DEFAULT. There shall not exist a Default or Event of
Default hereunder.
(c) MAXIMUM AVAILABLE AMOUNT. The Aggregate US Revolving
Credit Exposure and the Aggregate Canadian Revolving Credit Exposure, after
giving effect to such proposed Loan or Letter of Credit shall not exceed the US
Maximum Available Amount and Canadian Maximum Available Amount, respectively,
then in effect.
(d) BORROWING REQUESTS. Except in the case of any Borrowing
pursuant to Section 2.2(c) or Section 2.2(d), the applicable Borrowers shall
have provided Advance Notice of the requested Borrowing by completion, execution
and delivery of a Borrowing Request.
ARTICLE 4
SECURITY
Section 4.1 SECURITY GRANTED BY US CREDIT PARTIES. The Lender
Indebtedness shall be secured by perfected, first priority Liens in and
encumbering all assets of each US Credit Party, whether now owned or hereafter
acquired and wherever located; provided, that, only 65% of the Voting Stock of
any Person that is organized under the laws of a jurisdiction other than the
United States of America, a State thereof or the District of Columbia, shall be
pledged to secure the US Lender Indebtedness. In furtherance of the foregoing,
the US Borrowers shall execute on or before the Closing Date the Security
Documents set forth in Section 3.1(d) and shall thereafter execute and deliver
(and to cause each other US Credit Party and any other appropriate Person to
execute and deliver) to the Administrative Agent for the benefit of US Lenders,
promptly upon request by the Administrative Agent, such Security Documents and
other documents, instruments, agreements and certificates, as the Administrative
Agent shall deem necessary or appropriate in its sole discretion to create,
evidence and perfect the Liens contemplated by this Section 4.1.
Section 4.2 SECURITY GRANTED BY CANADIAN CREDIT PARTIES. The Canadian
Lender Indebtedness shall be secured by perfected, first priority Liens in and
encumbering all assets of each Canadian Credit Party, whether now owned or
hereafter acquired and wherever located. In furtherance of the foregoing, the
Canadian Borrowers shall execute on or before the Closing Date, Security
Documents set forth in Section 3.1(d) and shall thereafter execute and deliver
(and to cause each other Canadian Credit Party and any other appropriate Person
to execute and deliver) to the Canadian Administrative Agent for the benefit of
the Canadian Lenders, promptly upon request by the Canadian Administrative
Agent, such Security Documents and other documents, instruments, agreements and
certificates, as Canadian Administrative Agent shall deem necessary or
appropriate in its sole discretion to create, evidence and perfect the Liens
contemplated by this Section 4.2.
Section 4.3 ESTABLISHMENT OF US LOCKBOX. The Borrowers have entered
into the Lockbox Agreement with the Administrative Agent pursuant to which each
US Borrower has established a US Lockbox to be operated by the Administrative
Agent. Each Person which hereafter becomes a US Borrower shall enter into such
Lockbox Agreement. At all times from and after the Closing Date, each US
Borrower shall direct all account debtors with respect to such US Borrower's
accounts and all other Persons obligated to make payments of any type to such US
Borrower in respect of the Collateral to direct such payments to the US Lockbox.
All invoices issued by any US Borrower after the Closing Date shall contain a
notation requiring the accounts evidenced by such invoice to be paid to the US
Lockbox. The Administrative Agent shall have sole and exclusive access to the US
Lockbox. All monies, checks and other drafts received in the US Lockbox shall be
endorsed in accordance with the Lockbox Agreement and deposited by the
Administrative Agent each Business Day in the US Blocked Account.
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Section 4.4 ESTABLISHMENT OF CANADIAN LOCKBOX. The Canadian Borrowers
shall enter into the Canadian Blocked Account Agreement with Canadian Lockbox
Bank and the Canadian Administrative Agent pursuant to which each Canadian
Borrower has established a Canadian Lockbox to be operated by the Canadian
Lockbox Bank. Each Person which hereafter becomes a Canadian Borrower shall
enter into such Canadian Blocked Account Agreement. At all times from and after
the Closing Date, each Canadian Borrower shall direct all account debtors with
respect to such Canadian Credit Party's accounts and all other Persons obligated
to make payments of any type to any Canadian Credit Party to direct such
payments to the Canadian Lockbox. All invoices issued by any Canadian Credit
Party shall contain a notation requiring the Accounts evidenced by such invoice
to be paid to the Canadian Lockbox. Canadian Lockbox Bank, shall have sole and
exclusive access to the Canadian Lockbox. All monies, checks and other drafts
received in the Canadian Lockbox shall be endorsed in accordance with the
Lockbox Agreement and deposited by Canadian Lockbox Bank each Business Day in a
Canadian Lockbox Account.
Section 4.5 ESTABLISHMENT OF US BLOCKED ACCOUNT. The US Borrowers
acknowledge and agree that so long as this Agreement is in effect or any Lender
Indebtedness shall be outstanding, all funds received by any US Credit Party
from any source shall be deposited in the US Blocked Account not later than one
Business Day following the date of receipt. Such deposit shall be made in the
exact form received subject only to any necessary endorsements. The US Borrowers
hereby acknowledge and agree (a) that, from and after delivery of the Activation
Notice (US), none of them nor the other Credit Parties shall have any power of
withdrawal over the funds in the US Blocked Account, (b) that each US Borrower
has granted a Lien on and pledged to Administrative Agent as additional
collateral security for the US Lender Indebtedness, in the US Blocked Account
and all funds on deposit therein and "control" has been established with respect
to such US Blocked Account as defined in Section 9.104 of the UCC, (c) no US
Borrower may unilaterally terminate the US Blocked Account, and (d) at any time
after delivery of an Activation Notice (US), the US Blocked Account and all
funds on deposit therein shall be subject to the absolute dominion and control
of the Administrative Agent. Each of US Borrowers and the Administrative Agent
agree that the US Blocked Account is a "deposit account" within the meaning of
9-102(a)(29) of the UCC and that for purposes of Section 9-304 of this UCC, the
State of New York shall be the jurisdiction of the Administrative Agent.
Section 4.6 ESTABLISHMENT OF CANADIAN BLOCKED ACCOUNT. The Canadian
Borrowers acknowledge and agree that so long as this Agreement is in effect or
any Canadian Lender Indebtedness shall be outstanding, all funds received by any
Canadian Credit Party from any source (including without limitation items of
payment and other amounts deposited in the Canadian Lockbox) shall be deposited
in the Canadian Lockbox Account not later than one Business Day following the
date of receipt. The Canadian Borrowers hereby acknowledge and agree (a) that,
from and after delivery of the Activation Notice (Canadian), none of them nor
the other Credit Parties shall have any power of withdrawal over the funds in
the Canadian Lockbox Account, and all such funds shall be remitted within one
Business Day thereafter to the Canadian Blocked Account, (b) that each Canadian
Borrower has granted a Lien on and pledged to the Canadian Administrative Agent
as additional collateral security for the Canadian Lender Indebtedness, the
Canadian Lockbox Account and the Canadian Blocked Account and all funds on
deposit therein, (c) no Canadian Credit Party may unilaterally terminate the
Canadian Lockbox Account or Canadian Blocked Account, and (d) at any time after
delivery of an Activation Notice (Canadian), the Canadian Lockbox Account and
the Canadian Blocked Account and all funds on deposit therein shall be subject
to the absolute dominion and control of the Canadian Administrative Agent.
Section 4.7 APPLICATION OF PROCEEDS OF US BLOCKED ACCOUNT. All funds
received by the Administrative Agent in the US Blocked Account shall be applied
to the Lender Indebtedness in the manner set forth in Section 2.9(c) herein.
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Section 4.8 APPLICATION OF PROCEEDS OF CANADIAN BLOCKED ACCOUNT. All
funds received by Canadian Administrative Agent from the Canadian Blocked
Account or otherwise from the Canadian Administrative Agent shall be applied to
the Canadian Lender Indebtedness in the manner set forth in Section 2.9(d)
herein.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this
Agreement, each Borrower hereby represents and warrants to each Agent and each
Lender that each statement set forth in this Article 5 is true and correct on
the date hereof and will be true and correct on the date each Borrowing and each
Letter of Credit is requested hereunder and on the date each Borrowing is
disbursed and each Letter of Credit is issued hereunder; provided, that, each
Canadian Borrower is only making such representations and warranties in regard
to itself and each other Canadian Borrower and only to the Canadian
Administrative Agent and the Canadian Lenders; provided, that, the breach of any
representations and warranties which pertain to the US Borrowers in any material
respect (even though not made by the Canadian Borrowers) will give rise to an
Event of Default and will result in the Canadian Administrative Agent, the
Administrative Agent and the Canadian Lenders having the right to exercise all
rights and remedies applicable upon an Event of Default, including, without
limitation, rights and remedies with respect to the Canadian Borrowers and their
assets. Each such representation and warranty shall survive the execution and
delivery of this Agreement and any Borrowing or issuance of any Letter of Credit
hereunder and shall not be qualified or limited by any investigation undertaken
by any Agent or any Lender or any actual or constructive knowledge any Agent or
any Lender may have or be charged with indicating that any such representation
or warranty is inaccurate or incomplete in any respect.
Section 5.1 ORGANIZATIONAL EXISTENCE. Each Credit Party is duly
organized, legally existing and in good standing under the laws of the
jurisdictions in which it is organized and is duly qualified to transact
business and in good standing in all jurisdictions wherein the Property owned or
the business transacted by it makes such qualification necessary, except where
the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect.
Section 5.2 ORGANIZATIONAL POWER AND AUTHORIZATION. Each Obligated
Party is duly authorized and empowered to execute, deliver and perform the
Financing Documents, including this Agreement, to which it is a party; and all
corporate, partnership, limited liability company, unlimited liability company,
limited partnership, limited corporation or other action on any Obligated
Party's part requisite for the due execution, delivery and performance of the
Financing Documents, including this Agreement, to which the Obligated Parties
(or any of them) are parties has been duly and effectively taken.
Section 5.3 BINDING OBLIGATIONS. This Agreement does and other
Financing Documents to which any Obligated Party is a party will, when issued
and delivered under this Agreement, constitute legal, valid and binding
obligations of each Obligated Party that is a party thereto, and will be
enforceable in accordance with their respective terms (except that enforcement
may be subject to any applicable bankruptcy, insolvency or similar laws
generally affecting the enforcement of creditors' rights and subject to the
availability of equitable remedies).
Section 5.4 NO LEGAL BAR OR RESULTANT LIEN. The execution, delivery and
performance of the other Financing Documents, including this Agreement, to which
the Obligated Parties (or any of them) are parties do not and will not violate
or create a default under any provisions of the articles or certificate of
incorporation, bylaws, partnership agreement or other organizational documents
of any Obligated Party, or any contract, agreement, instrument or Governmental
Requirement to which any
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Obligated Party is subject which violation or default could have a Material
Adverse Effect, or result in the creation or imposition of any Lien upon any
Properties of any Obligated Party.
Section 5.5 NO CONSENT. Each Obligated Party's execution, delivery and
performance of the Financing Documents, including this Agreement, to which such
Obligated Party (or any of them) is a party, and the consummation of the Target
Acquisition do not require notice to or filing or registration with, or the
authorization, consent or approval of or other action by any other Person,
including, but not limited to, any Governmental Authority, except those obtained
or made or where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
Section 5.6 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS. The Financial Statements were
prepared in accordance with GAAP (subject, in the case of Financial Statements
as of March 31, 2005, to the absence of footnotes and subject to year end audit
adjustments which will not be material individually or in the aggregate) and
fairly present the consolidated and consolidating (in the case of the Financial
Statements as of March 31, 2005) financial condition and results of operations
of the Company and its consolidated Subsidiaries as of the dates and for the
periods reflected therein.
(b) CURRENT INFORMATION. The Current Information was prepared
in accordance with GAAP (subject, in the case of interim financial statements,
to the absence of footnotes and subject to year end audit adjustments which will
not be material individually or in the aggregate) and fairly present the
consolidated and consolidating (in the case of interim financial statements)
financial condition and results of operations of the Company and its
consolidated Subsidiaries as of the dates and for the periods reflected therein.
(c) PRO-FORMA CONSOLIDATING BALANCE SHEETS. The pro forma
consolidated balance sheet of the Company as of March 31, 2005 fairly presents
in conformity with GAAP the consolidated financial condition of the Company as
of such date adjusted to give effect to the Target Acquisition and the
incurrence of all Indebtedness to be incurred to finance the Target Acquisition.
(d) TARGET FINANCIAL STATEMENTS. The Target Financial
Statements fairly present the consolidated financial condition and results of
operations of Target as of the date and for the periods reflected therein.
(e) PROJECTIONS. The Projections set forth the Company's
reasonable best estimate as of the date hereof of the Company's consolidated
financial condition and results of operations as of the dates and for the
periods covered thereby. The Projections were prepared in good faith in
accordance with sound financial planning practices on the basis of the
assumptions stated therein, which assumptions were believed by the Company to be
reasonable at the time made and which the Company continues to believe are
reasonable on the date hereof.
(f) NO MATERIAL ADVERSE EFFECT. Since December 31, 2004, there
has been no event, condition or occurrence that has had or could reasonably be
expected to have a Material Adverse Effect.
Section 5.7 LITIGATION. There is no action, suit, claim, grievance or
proceeding, or any governmental investigation or any arbitration proceeding, in
each case pending (including any unsatisfied settlement, judgment decree or
order) or, to the knowledge of any Borrower, threatened against any Credit Party
or any Property of any Credit Party before any court or arbitrator or any
Governmental Authority, or pursuant to any collective bargaining agreement,
which (a) challenges the validity of this Agreement, any
73
Application, any Security Instrument or any of the other Financing Documents or
(b) could reasonably be expected to have a Material Adverse Effect.
Section 5.8 USE OF PROCEEDS. The Borrowers will use the proceeds of the
Loans only for the following purposes: (a) refinancing the Indebtedness
outstanding under the Existing Credit Agreement, (b) financing working capital
needs of the Borrowers, (c) financing the Target Acquisition, and (d) other
general corporate purposes of the Borrowers. The Letters of Credit will be used
only for the purposes provided in Section 2.3. No Credit Party is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock (within the meaning of Regulation U or X) and no part of
the proceeds of any Loan hereunder will be used to buy or carry any Margin Stock
in violation of Regulation U or X. No Credit Party nor any Person acting on
behalf of any Credit Party has taken or will take any action which could
reasonably be expected to cause any of the Financing Documents, including this
Agreement, to violate Regulations U or X or any other regulation of the Board,
in each case as now in effect or as the same may hereinafter be in effect.
Section 5.9 US EMPLOYEE BENEFITS.
(a) (1) Each US Credit Party and each ERISA Affiliate have
complied in all material respects with all applicable laws regarding each Plan;
(A) each Plan is, and has been, maintained and administered in substantial
compliance with its terms, applicable collective bargaining agreements, and all
applicable laws; and (B) no act, omission or transaction has occurred which
could result in an imposition on any US Credit Party or any ERISA Affiliate
(whether directly or indirectly) of (C) either a civil penalty assessed pursuant
to Subsections (c), (i) or (l) of Section 502 of ERISA or a tax imposed pursuant
to Chapter 43 of Subtitle D of the Code or (D) breach of fiduciary duty
liability damages under Section 409 of ERISA which could reasonably be expected
to have a Material Adverse Effect.
(b) There exists no outstanding liability of any US Credit
Party or any ERISA Affiliate with respect to any Plan that has been terminated.
No material liability to the PBGC (other than for the payment of current
premiums which are not past due) by any US Credit Party or any ERISA Affiliate
has been or is expected by any US Credit Party or any ERISA Affiliate to be
incurred with respect to any Plan. No ERISA Termination Event with respect to
any Plan has occurred or is reasonably expected to occur.
(c) Full payment when due has been made of all amounts which
any US Credit Party or any ERISA Affiliate is required under the terms of each
Plan or applicable law to have paid as contributions to such Plan (excluding any
nonpayment involving an amount that is not material), and no accumulated funding
deficiency, whether or not waived, resulting from the action or inaction of any
US Credit Party exists with respect to any Plan except for accumulated funding
deficiencies that (1) could not reasonably be expected to cause a Material
Adverse Effect or (2) when combined with all other accumulated funding
deficiencies of all Credit Parties, including, but not limited to accumulated
funding deficiencies of Canadian Credit Parties, do not exceed $15,000,000 in
the aggregate.
(d) Except as set forth on Schedule 5.9 hereto, the actuarial
present value of the benefit liabilities (computed on an accumulated benefit
obligation basis in accordance with GAAP) under all Plans in the aggregate that
are subject to Title IV of ERISA does not, as of the end of the most recently
ended fiscal year of such Plans, exceed the current value of the assets of all
Plans in the aggregate that are allocable to such benefit liabilities. The term
"actuarial present value of the benefit liabilities" shall have the meaning
specified in Section 4041 of ERISA.
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(e) Neither any US Credit Party nor any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time sponsored, maintained
or contributed to, any "multiemployer plan" (as defined in Section 3(37) or
4001(a)(3) of ERISA).
(f) Neither any US Credit Party nor any ERISA Affiliate is
required to provide security to a Plan pursuant to Section 401(a)(29) of the
Code.
Section 5.10 CANADIAN EMPLOYEE BENEFITS.
(a) Except as could not reasonably be expected to have a
Material Adverse Effect (1) each Canadian Credit Party has complied in all
material respects with all applicable laws regarding each Plan (including, where
applicable, the Employment Pension Plans Act (Alberta) and the Income Tax Act
(Canada)); or (2) each Plan is, and has been, maintained and administered in
substantial compliance with its terms, applicable collective bargaining
agreements, and all applicable laws (including, where applicable, the Employment
Pension Plans Act (Alberta) and the Income Tax Act (Canada)).
(b) There exists no material outstanding liability of any
Canadian Credit Party with respect to any Plan that has been terminated.
(c) Full payment when due has been made of all amounts which
any Canadian Credit Party is required under the terms of each Plan or applicable
law to have paid as contributions to such Plan (excluding any nonpayment
involving an amount that is not material), and no accumulated funding
deficiency, whether or not waived, resulting from the action or inaction of any
Canadian Credit Party exists with respect to any Plan except for accumulated
funding deficiencies that (1) could not reasonably be expected to cause a
Material Adverse Effect or (2) when combined with all other accumulated funding
deficiencies of all Credit Parties, including, but not limited to accumulated
funding deficiencies of US Credit Parties, do not exceed $15,000,000 in the
aggregate.
(d) Each Plan relating to a Canadian Credit Party is fully
funded, on a going concern basis, in accordance with its terms and regulatory
requirements as outlined by the Employment Pension Plans Act (Alberta),
administrative requirements of the Superintendent of Pensions of Alberta and the
most recent actuarial report filed with the Superintendent of Pensions of
Alberta in respect of such Plan, as and to the extent applicable, except to the
extent any failure to do so could not reasonably be expected to have a Material
Adverse Effect.
(e) No Canadian Credit Party sponsors, maintains or
contributes to, or has at any time sponsored, maintained or contributed to any
"specified multi-employer plan" (as defined in the Employment Pension Plans Act
(Alberta).
Section 5.11 TAXES; GOVERNMENTAL CHARGES. Each Credit Party has filed
all tax returns and reports required to be filed and has paid all taxes,
assessments, fees and other governmental charges levied upon any of them or upon
any of their respective Properties or income which are due and payable after all
available extension periods, including interest and penalties or have except to
the extent being diligently contested in good faith by appropriate proceedings
and with respect to which such Credit Party has provided adequate reserves for
the payment thereof if required in accordance with GAAP.
Section 5.12 TITLES, ETC. Each Credit Party has good and indefeasible
title to its respective Properties, and with respect to leased Properties, good
and indefeasible title to the leasehold estate with respect thereto, pursuant to
valid and enforceable leases, free and clear of all Liens except Liens otherwise
permitted or contemplated by this Agreement or the other Financing Documents.
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Section 5.13 DEFAULTS. No Credit Party is in default nor has any event
or circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default (in any respect that could
individually or in the aggregate, have a Material Adverse Effect) under any loan
or credit agreement, indenture, mortgage, deed of trust, security agreement or
other instrument or agreement evidencing or pertaining to any Indebtedness of
any Credit Party, or under any agreement or instrument to which any Credit Party
is a party or by which any Credit Party is bound. No Default hereunder has
occurred and is continuing.
Section 5.14 CASUALTIES; TAKING OF PROPERTIES. Neither the business nor
the Properties of any Credit Party has been affected in a manner that has or
could have a Material Adverse Effect as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy.
Section 5.15 COMPLIANCE WITH THE LAW. Except as set forth in Schedule
5.15, no Credit Party:
(a) is in violation of any Governmental Requirement; or
(b) has failed to obtain any license, permit, right-of-way,
franchise or other right or governmental authorization necessary to the
ownership of any of their respective Properties or the conduct of their
respective business;
which violation or failure could, individually or in the aggregate, have (in the
event that such a violation or failure was asserted by any Person through
appropriate action) a Material Adverse Effect.
Section 5.16 NO MATERIAL MISSTATEMENTS. No written information,
exhibit, schedule or report prepared by or on behalf of any Borrower and
furnished to the Administrative Agent or the Lenders by or at the direction of
any Borrower in connection with the negotiation of this Agreement contained any
material misstatement of fact or, when such statement is considered with all
other written statements furnished to the Lenders in that connection, omitted to
state a material fact or any fact necessary to make the statement contained
therein not misleading; provided, that, except as provided in Section 5.6(e) no
representation or warranty is made with respect to the Projections.
Section 5.17 INVESTMENT COMPANY ACT. No Borrower is an "investment
company" or a company "controlled" by an "investment company" that is
incorporated in or organized under the laws of the United States or any "State,"
as those terms are defined in the Investment Company Act of 1940, as amended.
The execution and delivery by the Obligated Parties of this Agreement and the
other Financing Documents to which they respectively are parties and their
respective performance of the obligations provided for therein, will not result
in a violation of the Investment Company Act of 1940, as amended.
Section 5.18 PUBLIC UTILITY HOLDING COMPANY ACT. No Borrower is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 5.19 CAPITAL STRUCTURE. Schedule 5.19 hereto accurately
reflects, as of the date hereof (a) the jurisdiction of incorporation or
organization of each Credit Party, (b) each jurisdiction in which each Credit
Party is qualified to transact business as a foreign corporation, foreign
partnership or foreign limited liability company, (c) the authorized, issued and
outstanding Equity of each Credit Party,
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including the names of (and number of shares or other Equity interest held by)
the record and beneficial owners of such securities (other than with respect to
the Company). Except as set forth in Schedule 5.19 hereto, there are no
outstanding shareholders agreements, voting agreements or other agreements of
any nature which in any way restrict or effect the transfer, pledge or voting of
any of the Equity securities of any Credit Party or subject any of such
securities to any put, call, redemption obligation or similar right or
obligation of any nature.
Section 5.20 INSURANCE. All policies of fire, liability, workmen's
compensation, casualty, flood, business interruption and other forms of
insurance owned or held by each Credit Party are sufficient for compliance with
all requirements of law and of all agreements to which each Credit Party is a
party; are valid, outstanding and enforceable policies; provide adequate
insurance coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business for the
assets and operations of the Credit Parties; and will not in any way be affected
by, or terminate or lapse by reason of, the transactions contemplated by this
Agreement. All such policies are in full force and effect, all premiums with
respect thereto have been paid in accordance with their respective terms, and no
notice of cancellation or termination has been received with respect to any such
policy. Except as provided on Schedule 5.20 hereto, no Credit Party maintains
any formalized self-insurance program with respect to its assets or operations
or risks with respect thereto. The certificate of insurance delivered to the
Lenders pursuant to Section 3.1(e) contains an accurate and complete description
of all policies of insurance owned or held by each Credit Party on the Closing
Date.
Section 5.21 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS, ETC. Except as disclosed on Schedule
5.21 hereto, neither any Property of any Credit Party nor the operations
conducted thereon violate any applicable order of any court or Governmental
Authority or Environmental Laws, which violation could reasonably be expected to
have a Material Adverse Effect or which could reasonably be expected to result
in remedial obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(b) NO LITIGATION. Except as disclosed on Schedule 5.21
hereto, no Property of any Credit Party nor the operations currently conducted
thereon or by any prior owner or operator of such Property or operation, are
subject to any existing, pending or, to the knowledge of the Company and each
Borrower, threatened action, suit, investigation, inquiry or proceeding by or
before any court or Governmental Authority or to any remedial obligations under
Environmental Laws.
(c) NOTICES, PERMITS, ETC. Except as disclosed on Schedule
5.21 hereto, all notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed by any Credit Party in connection with the
operation or use of any and all Property of the Credit Parties, including but
not limited to past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed except for those notices, permits, licenses or authorizations the
failure of which to obtain could not reasonably be expected to have a Material
Adverse Effect assuming disclosure to the applicable Governmental Authority of
all relevant facts, conditions and circumstances, if any, pertaining to such
operations or use.
(d) HAZARDOUS SUBSTANCES CARRIERS. Except as disclosed on
Schedule 5.21 hereto, all hazardous substances or solid waste generated at any
and all Property of any Credit Party have in the past been transported, treated
and disposed of only by carriers maintaining valid permits under RCRA (or
comparable legislative provisions in Canada for the Canadian Borrowers) and any
other Environmental Law, and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any
77
other Environmental Law, which carriers and facilities have been and are
operating in compliance with such permits.
(e) HAZARDOUS SUBSTANCES DISPOSAL. Each Credit Party has taken
all reasonable steps necessary to determine and has determined that no hazardous
substances or solid waste has been disposed of or otherwise released and there
has been no threatened release of any hazardous substances on or to any Property
of any Credit Party except in compliance with Environmental Laws.
(f) NO CONTINGENT LIABILITY. The Credit Parties have no
contingent liability in connection with any release or threatened release of any
hazardous substance or solid waste into the environment other than such
contingent liabilities at any one time and from time to time which could not
reasonably be expected to exceed $1,000,000.
Section 5.22 SOLVENCY. Each Credit Party is Solvent, both before and
after giving affect to the Closing Transactions and the incurrence of all Lender
Indebtedness to be incurred in connection therewith.
Section 5.23 EMPLOYEE MATTERS. Except as disclosed on Schedule 5.23, no
Credit Party, nor any of their respective employees, is subject to any
collective bargaining agreement. There are no strikes, slowdowns, work
stoppages, union organizing campaigns or representation petitions, unfair labor
practices or labor disputes pending or, to the best knowledge of the Borrowers,
threatened against any Credit Party, or their respective employees, which could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. As of the Closing Date, except as set forth in Schedule
5.23, no employees are subject to an employment contract or other arrangement
obligating a Credit Party to pay an employee an amount in excess of such
employee's regular salary, wages or benefits (whether or not such payment is
based on a contingent event including but not limited to termination of
employment or change of control of a Credit Party).
Section 5.24 REAL PROPERTY. Schedule 5.24 hereto accurately reflects,
as of the date hereof, all Real Property in which any Credit Party holds any
right, title or interest including any leasehold interest. Schedule 5.24 further
accurately reflects, in respect of each parcel of Real Property described
thereon, the name of the Credit Party which is the owner and holder of record
title thereto, the nature of the interest of the Credit Parties therein (fee,
leasehold or other), and, in the case of any leasehold interest described
therein, the name of the landlord under such lease and a description of such
lease, including all amendments thereto. No Credit Party is in monetary default
or in default of any other material obligation under any such Lease, and, to
each Borrower's knowledge, no landlord under any such lease is in default of any
material obligation of such landlord thereunder. No Credit Party has received
any written notice alleging any default or any written notice of actual or
threatened termination or cancellation of any such lease.
Section 5.25 PERFECTION CERTIFICATE; SCHEDULES TO OTHER FINANCING
DOCUMENTS. All information in each Perfection Certificate and all information
set forth in all disclosure schedules to each of the other Financing Documents
is true, correct and complete.
Section 5.26 EXISTING INDEBTEDNESS. Schedule 5.26 hereto contains an
accurate and complete list and description of all Existing Indebtedness of the
Credit Parties on the Closing Date prior to giving effect to the repayment of
any such Indebtedness to be repaid on the Closing Date, and including, with
respect to each such item of Existing Indebtedness: (a) the current lender or
holder of such Indebtedness, (b) the principal amount of such Indebtedness on
the Closing Date, (c) a description of the material loan agreements, promissory
notes and other documents evidencing, governing or otherwise pertaining to such
Indebtedness, and (d) a description of all property which stands as security for
such Indebtedness.
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Section 5.27 TARGET PURCHASE DOCUMENTS. The Borrowers have provided to
the Administrative Agent a true and correct copy of the Target Purchase
Agreement and all other material documents, instruments and agreements entered
into by and between or among any Credit Party related to the Target Acquisition,
including all amendments and modifications thereto (whether characterized as an
amendment, modification, waiver, consent or similar document) (collectively, the
"TARGET PURCHASE DOCUMENTS"). No material rights or obligations of any party to
any of the Target Purchase Documents have been waived and no party to any of the
Target Purchase Documents is in default of its obligations or in breach of any
representations or warranties made thereunder. Each of the Target Purchase
Documents is a valid, binding and enforceable obligation of each party thereto
in accordance with its terms and is in full force and effect.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan remains
unpaid or any Revolving Credit Exposure remains outstanding, each Borrower will
at all times comply with the following covenants; provided, that,
notwithstanding anything to the contrary set forth in any Section of this
Article 6, no Canadian Borrower will be obligated to cause anyone other than
other Canadian Borrowers to comply with the covenants of this Article 6 or be
obligated in regard to any such covenants to the extent they do not relate to
the Canadian Borrowers or any of them; provided, that the non-performance of
such covenants with respect to the US Borrowers (even though the Canadian
Borrowers are not obligated to ensure compliance with such covenants) will,
subject to Article 8, give rise to Events of Default and will result in the
Canadian Administrative Agent, the Administrative Agent and the Canadian Lenders
having the right to exercise all rights and remedies applicable upon an Event of
Default, including, without limitation, rights and remedies with respect to the
Canadian Borrowers and their assets.
Section 6.1 MAINTENANCE AND COMPLIANCE, ETC. Each Borrower will and
will cause each other Credit Party to (a) observe and comply with all
Governmental Requirements, except where failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (b) preserve and maintain its
corporate existence. Notwithstanding the foregoing, the Precision Transactions
shall be expressly permitted hereunder.
Section 6.2 PAYMENT OF TAXES AND CLAIMS, ETC. Each Borrower will pay,
and cause each other Credit Party to pay, (a) all material taxes, assessments
and governmental charges imposed upon it or upon its Property, and (b) all
material claims (including, but not limited to, claims for labor, materials,
supplies or services) which could reasonably be expected, if unpaid, to become a
Lien upon its Property, unless, in each case, the validity or amount thereof is
being contested in good faith by appropriate action or proceedings and the
Borrowers have made adequate reserves for the payment thereof if required in
accordance with GAAP.
Section 6.3 FURTHER ASSURANCES. Each Borrower will and will cause each
other Obligated Party to cure promptly any defects in the execution and delivery
of the Financing Documents, including this Agreement. Each Borrower at its
expense will, as promptly as practical, execute and deliver to the
Administrative Agent or the applicable Issuing Bank upon request all such other
and further documents, agreements and instruments (or cause any of the other
Obligated Parties to take such action) in compliance with or performance of the
covenants and agreements of the Borrowers in the Financing Documents, including
this Agreement, or to further evidence and more fully describe the Collateral,
or to correct any omissions in the Financing Documents, or more fully to state
the security obligations set out herein or in any of the Financing Documents, or
to perfect, protect or preserve any Liens created pursuant
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to any of the Financing Documents, or to make any recordings, to file any
notices, or obtain any consents, all as may be necessary or appropriate in
connection therewith.
Section 6.4 PERFORMANCE OF OBLIGATIONS. Each Borrower will pay or cause
to be paid, the Lender Indebtedness with respect to which it is a maker or
guarantor according to the reading, tenor and effect thereof; and each Borrower
will do and perform every act and discharge all of the obligations provided to
be performed and discharged by it under the Financing Documents, including this
Agreement, at the time or times and in the manner specified, and cause each
other Obligated Party to take such action with respect to their obligations to
be performed and discharged under the Financing Documents to which they
respectively are parties.
Section 6.5 INSURANCE. Each Borrower will and will cause each of the
other Credit Parties to maintain or cause to be maintained, with financially
sound and reputable insurers, insurance with respect to their respective
Properties and business against such liabilities, casualties, risks and
contingencies and in such types (including business interruption insurance,
marine insurance insuring all Included-In-Transit Inventory, and flood
insurance) and amounts as the Administrative Agent shall require and as shall be
required in accordance with any Governmental Requirement. Each Borrower will
obtain endorsements to the policies naming the Administrative Agent or the
Canadian Administrative Agent, as applicable, as a loss payee and as an
additional insured, as applicable, and containing provisions that such policies
will not be canceled without 30 days prior written notice having been given by
the insurance company to the Administrative Agent or the Canadian Administrative
Agent, as applicable.
Section 6.6 ACCOUNTS AND RECORDS. Each Borrower will keep and will
cause each of the other Credit Parties to keep proper books of record and
account in accordance with GAAP.
Section 6.7 RIGHT OF INSPECTION. Each Borrower will permit and will
cause each of the other Credit Parties to permit any officer, employee or agent
of the Administrative Agent or any Lender to visit and inspect any of the
Properties of the Credit Parties, examine any Credit Party's books of record and
accounts, take copies and extracts therefrom, and discuss the affairs, finances
and accounts of the Credit Parties with any Credit Party's executive officers,
accountants and auditors, as often and all at such reasonable times during
normal business hours and upon reasonable advance notice all as may be
reasonably requested by the Administrative Agent or the Required Lenders;
provided, that, such inspection rights shall not be limited or conditioned by
reasonable prior notice or reasonable times during the existence of a Default or
Event of Default. Without limiting the foregoing, the Borrowers agree to hold a
meeting with all Lenders at least once a year to discuss the business and
affairs of the Borrowers.
Section 6.8 OPERATION AND MAINTENANCE OF PROPERTY. Each Borrower will,
and will cause each other Credit Party to, operate its Properties or cause its
Properties to be operated and maintained (a) in accordance with prudent industry
practice in all material respects and in compliance in all material respects
with the terms and provisions of all applicable leases, contracts and agreements
and (b) in compliance with all applicable laws of the jurisdiction in which such
Properties may be situated, and all applicable laws, rules and regulations of
every other Governmental Authority from time to time constituted to regulate the
ownership and operation of such Properties, except where the noncompliance
therewith could not reasonably be expected to cause or result in a Material
Adverse Effect.
Section 6.9 NEW SUBSIDIARIES; ADDITIONAL LIENS.
(a) If at any time after the Closing Date, any Borrower
creates or acquires (subject to Section 7.7 and Section 7.17) any one or more
Subsidiaries which is not a Foreign Subsidiary (a "NEW SUBSIDIARY") each
Borrower shall cause such New Subsidiary to execute and deliver, at the time of
such New Subsidiary's creation or acquisition, to (1) the Administrative Agent a
Borrower Joinder Agreement
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(a "BORROWER JOINDER AGREEMENT") in the form of Exhibit L, attached hereto
pursuant to which such Subsidiary becomes a party to this Agreement and a US
Borrower or a Canadian Borrower hereunder as applicable, (2) the Administrative
Agent, if such New Subsidiary is a US Credit Party, for the benefit of the
Administrative Agent, the Lenders and the Issuing Banks, (i) an Addendum to the
Guaranty and Security Agreement in the manner contemplated by Section 8.14 of
the Guaranty and Security Agreement, and (ii) other appropriate Security
Instruments covering such New Subsidiary's Property as security for the Lender
Indebtedness, in form and substance acceptable to the Administrative Agent, and
(3) the Canadian Administrative Agent, if such New Subsidiary is a Canadian
Credit Party, for the benefit of the Canadian Administrative Agent, the Lenders
and the Issuing Banks, (i) an Addendum to the Canadian Security Agreement in the
manner contemplated by Section 7.13 of the Canadian Security Agreement, and (ii)
other appropriate Security Instruments covering such New Subsidiary's Property
as security for the Canadian Lender Indebtedness, in form and substance
acceptable to the Canadian Administrative Agent.
(b) In connection with the execution and delivery of any
Borrower Joinder Agreement, Addendum or Security Document pursuant to this
Section 6.9, the Borrowers shall, or shall cause the relevant New Subsidiary to,
deliver to the Administrative Agent or the Canadian Administrative Agent, as
applicable, for the benefit of the Lenders, resolutions, member or partner
consents, certificates, legal opinions and such other related documents as shall
be reasonably requested by the Administrative Agent and the Canadian
Administrative Agent and consistent with the relevant forms and types thereof
delivered on the Closing Date or as shall be otherwise reasonably acceptable to
the Required Lenders. Each Security Instrument delivered pursuant to this
Section 6.9 shall be deemed to be a Security Instrument from and after the date
of execution thereof.
Section 6.10 REPORTING COVENANTS. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company and the Borrowers will furnish the following to
each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the end of each Fiscal Year, consolidating and
consolidated balance sheets of the Company and its Subsidiaries as at the end of
such year and the related consolidating and consolidated statements of income,
retained earnings and cash flows of the Company and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all in reasonable detail and accompanied by the
unqualified report thereon of independent public accountants of recognized
national standing, which report shall state that such consolidated financial
statements present fairly the consolidated financial condition as at the end of
such Fiscal Year, and the consolidated results of operations and cash flows for
such Fiscal Year, of the Company and its Subsidiaries in accordance with GAAP,
applied on a consistent basis; provided, that, the consolidating balance sheets
and consolidating statements of income, retained earnings and cash flow of the
Company and its Subsidiaries are not required to be audited.
(b) MONTHLY FINANCIAL STATEMENTS. As soon as available and in
any event within 30 days after the end of each calendar month of the Company,
consolidating and consolidated balance sheet of the Company and its Subsidiaries
as at the end of such month and the related consolidating and consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such calendar month and for the portion of the Company's Fiscal
Year ended at the end of such month, setting forth in each case in comparative
form the figures for the corresponding month and the corresponding portion of
the Company's previous Fiscal Year, all in reasonable detail and certified by a
Responsible Officer that such financial statements are complete and correct and
fairly present the consolidated financial condition as at the end of such
calendar month, and the consolidating and consolidated results of operations and
cash flows for such calendar month and such portion of the
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Company's Fiscal Year, of the Company and its Subsidiaries in accordance with
GAAP (subject to normal, year-end adjustments and the absence of footnotes).
(c) NO DEFAULT/COMPLIANCE CERTIFICATE. Together with the
financial statements required pursuant to Section 6.10(a) and Section 6.10(b)
above, a certificate of the Company, which shall be substantially in the form of
Exhibit M hereto and signed by a Responsible Officer (1) stating that a review
of such financial statements during the period covered thereby and of the
activities of the Company and its Subsidiaries has been made under such
Responsible Officer's supervision with a view to determining whether the Company
and its Subsidiaries have fulfilled in all material respects all of their
obligations under this Agreement, the other Financing Documents; (2) stating
that the Company and its Subsidiaries have fulfilled in all material respects
their obligations under such instruments and that all representations made in
this Agreement continue to be true and correct in all material respects (or
specifying the nature of any change), or if there shall be a Default or Event of
Default, specifying the nature and status thereof and the Company's proposed
response thereto; (3) demonstrating in reasonable detail compliance (including,
but not limited to, showing all material calculations) as at the end of such
Fiscal Year or such Fiscal Quarter with Section 7.1, Section 7.2, Section 7.5,
Section 7.6, Section 7.7, Section 7.10, Section 7.11, Section 7.15 and Section
7.17; (4) containing or accompanied by such financial or other details,
information and material as the Administrative Agent may reasonably request to
evidence such compliance; and (5) stating that no event has occurred or
condition exists that has had or reasonably could be expected to have a Material
Adverse Effect.
(d) MANAGEMENT LETTERS. Together with the financial statements
required pursuant to Section 6.10(a) above, copies of each management letter, if
any, issued to the Company by such accountants promptly following consideration
or review by the Board of Directors of the Company, or any committee thereof
(together with any response thereto prepared by the Company).
(e) TITLE INFORMATION. Within a reasonable time after a
request by the Administrative Agent, additional title information in form and
substance acceptable to the Required Lenders as is reasonably necessary covering
the Collateral so that the Lenders shall have received, together with the title
information previously received by the Lenders, satisfactory title information
covering all of the Collateral.
(f) EVENTS OR CIRCUMSTANCES WITH RESPECT TO COLLATERAL.
Promptly after the occurrence of any event or circumstance concerning or
changing any of the Collateral that could have a Material Adverse Effect, notice
of such event or circumstance in reasonable detail.
(g) BORROWING BASE REPORTS; PERFECTION CERTIFICATE UPDATE. As
soon as available, and in any event on or before the 20th day of each calendar
month (or the next succeeding Business Day if such day is not a Business Day),
(1) a Canadian Borrowing Base Report and a US Borrowing Base Report, dated and
reflecting the US Borrowing Base and US Maximum Available Amount and the
Canadian Borrowing Base and Canadian Maximum Available Amount as of the close of
business on the last Business Day of the preceding calendar month (subject to
Borrower's rights to make Permitted Borrowing Base Adjustments), (2) a
Perfection Certificate Update prepared as of the close of business on the last
Business Day of the preceding calendar month, (3) an accounts receivable aging,
payables aging and inventory aging prepared as of the close of business on the
last Business Day of the preceding calendar month, and (4) a summary of all Swap
Agreements to which any Borrower is subject as of the last Business Day of the
preceding calendar month, in form, substance and detail acceptable to the
Administrative Agent; provided, however, (x) at any time that Excess
Availability shall be below the Trigger Threshold, the Administrative Agent, in
its discretion, may require the delivery of reports setting forth the Eligible
Accounts, Eligible Xxxx and Hold Accounts, and Eligible Inventory components of
the US Borrowing Base and Canadian Borrowing Base more frequently than monthly
in which event the US
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Borrowing Base and Canadian Borrowing Base (as applicable) would be adjusted
immediately upon delivery of such reports based on the Eligible Accounts,
Eligible Xxxx and Hold Accounts, and Eligible Inventory reflected in such
reports. In the event more frequent reporting of the accounts and inventory
components of the US Borrowing Base and the Canadian Borrowing Base is required
pursuant to this Section 6.10(g), such reports shall be in the form of the
Interim Account Reports attached hereto as Exhibits N-1 and N-2, as applicable,
and the Inventory Designation Reports attached hereto as Exhibits O-1 and O-2,
as applicable.
(h) NOTICE OF CERTAIN EVENTS. Promptly after any Borrower
learns of the receipt or occurrence of any of the following, a certificate of
the Borrowers, signed by a Responsible Officer specifying (1) any official
notice of any violation, possible violation, non-compliance or possible
non-compliance, or claim made by any Governmental Authority pertaining to all or
any part of the Properties of any Credit Party which could reasonably be
expected to have a Material Adverse Effect; (2) any event which constitutes a
Default or Event of Default, together with a detailed statement specifying the
nature thereof and the steps being taken to cure such Default or Event of
Default; (3) the receipt of any notice from, or the taking of any other action
by, the holder of any promissory note, debenture or other evidence of
Indebtedness in excess of $1,000,000 of any Credit Party with respect to a
claimed default, together with a detailed statement specifying the notice given
or other action taken by such holder and the nature of the claimed default and
what action the Borrowers are taking or propose to take with respect thereto;
(4) any default or noncompliance of any party to any of the Financing Documents
with any of the terms and conditions thereof or any notice of termination or
other proceedings or actions which could reasonably be expected to adversely
affect any of the Financing Documents; (5) the creation, dissolution, merger or
acquisition of any Credit Party; (6) any event or condition not previously
disclosed to the Administrative Agent, which violates any Environmental Law or
which could reasonably be expected to have a Material Adverse Effect; (7) any
material amendment to, termination of, or default under any material contract or
any execution of, or material amendment to, termination of, or material default
under, any material collective bargaining agreement; or (8) any event or
condition which may reasonably be expected to have a Material Adverse Effect.
(i) SHAREHOLDER COMMUNICATIONS, FILINGS. Promptly upon the
mailing, filing, or making thereof, copies of all registration statements,
periodic reports and other documents (excluding the related exhibits except to
the extent expressly requested by the Administrative Agent) filed by any Credit
Party with the Securities and Exchange Commission (or any successor thereto) or
any national or Canadian regional securities exchange or provincial securities
commission.
(j) LITIGATION. Promptly after the occurrence thereof, notice
of the institution of or any material adverse development in any action, suit,
claim, grievance or proceeding or any governmental investigation or any
arbitration, before any arbitrator or any Governmental Authority, or pursuant to
any collective bargaining agreement against any Credit Party or any material
Property of any thereof, in which the amount involved is material and is not
covered by insurance or which, if adversely determined, would have a Material
Adverse Effect.
(k) ERISA. Promptly after (1) any Credit Party obtaining
knowledge of the occurrence thereof, notice that an ERISA Termination Event or a
"prohibited transaction," as such term is defined in Section 406 of ERISA or
Section 4975 of the Code, with respect to any Plan has occurred (for which there
is no exemption), which such notice shall specify the nature thereof, the
Borrowers' proposed response thereto (and, if applicable, the proposed response
thereto of any Subsidiary of the Borrowers and of any ERISA Affiliate) and,
where known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, (2) any Credit Party's
obtaining knowledge thereof, copies of any notice of the PBGC's intention to
terminate or to have a trustee appointed to administer any Plan, and (3) the
filing thereof with any Governmental Authority copies of
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each annual and other report (including applicable schedules) with respect to
each Plan or any trust created thereunder (if requested by the Administrative
Agent).
(l) BORROWING BASE AUDIT. As of dates to be designated by the
Administrative Agent in its discretion, but at the cost of the Borrowers,
reports of a collateral field examiner approved by the Administrative Agent in
writing and reasonably acceptable to the Borrowers (which may be the
Administrative Agent or an affiliate thereof) with respect to the components of
the US Borrowing Base and the Canadian Borrowing Base and such other matters
regarding the Credit Parties or the Collateral as the Administrative Agent or
the Canadian Administrative Agent shall reasonably require; provided, that, in
the absence of a Default or Event of Default (1) not more than one (1) field
examination shall be required in any period of twelve (12) months if Excess
Availability has not been less than $75,000,000 during such period, and (2) not
more than two (2) field examinations will be required in any period of twelve
(12) months in all other circumstances.
(m) ANNUAL BUDGET. As soon as available and in any event not
later than 30 days prior to the end of each Fiscal Year, a budget of the Credit
Parties on a consolidating and consolidated basis for the succeeding Fiscal Year
(prepared on a quarterly basis), reviewed by the Board of Directors of the
Company, setting forth in reasonable detail, the projected revenues and expenses
of the Company for such Fiscal Years.
(n) INVENTORY APPRAISALS. The Administrative Agent may
require, in its discretion, but at the cost of the Borrowers, appraisals of the
Borrowers' inventory in scope and detail and prepared by an independent
appraisal firm acceptable to the Administrative Agent; provided, that, in the
absence of a Default or Event of Default (1) not more than one (1) inventory
appraisal shall be required in any period of twelve (12) months if Excess
Availability has not been less than $75,000,000 during such period, and (2) not
more than two (2) inventory appraisals will be required in any period of twelve
(12) months in all other circumstances.
(o) OTHER INFORMATION. With reasonable promptness, such other
information about the business and affairs and financial condition of any Credit
Party as the Administrative Agent may reasonably request from time to time,
including, without limitation, monthly accounts receivable aging and
reconciliation, accounts payable aging and reconciliation, sales reports and
inventory designations.
(p) EMPLOYEE FUNDING LIABILITY RESERVES. Promptly after the
occurrence thereof, notice of any change in the Canadian Employee Funding
Liability Reserve or the US Employee Funding Liability Reserve.
ARTICLE 7
NEGATIVE COVENANTS
Notwithstanding anything to the contrary set forth in any Section of this
Article 7 no Canadian Borrower will be obligated to cause anyone other than
other Canadian Borrowers to comply with the covenants of this Article 7 or be
obligated in regard to any such covenants to the extent they do not relate to
the Canadian Borrowers or any of them; provided, that the non-performance of
such covenants with respect to the US Borrowers (even though the Canadian
Borrowers are not obligated to ensure compliance with such covenants) will,
subject to Article 8, give rise to Events of Default and will result in the
Canadian Administrative Agent, the Administrative Agent and the Canadian Lenders
having the right to exercise all rights and remedies applicable upon an Event of
Default, including, without limitation, rights and remedies with respect to the
Canadian Borrowers and their assets. So long as any Lender has any Commitment
hereunder or any Loan remains unpaid or any Revolving Credit Exposure remains
outstanding, the Borrowers will not:
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Section 7.1 FINANCIAL COVENANTS. Permit the Fixed Charge Coverage Ratio
for any Rolling Period to be less than 1.10 to 1; provided, however, Borrowers'
obligation to comply with this Section 7.1 shall be suspended for any Rolling
Period to the extent that Excess Availability is not less than the Trigger
Threshold at any time during the final Fiscal Quarter in such Period.
Section 7.2 INDEBTEDNESS. Create, incur, assume or suffer to exist, or
permit any other Credit Party to create, incur, assume or suffer to exist, any
Indebtedness, other than:
(a) the Lender Indebtedness;
(b) Indebtedness outstanding on the date hereof which is set
forth on Schedule 7.2;
(c) trade or accounts payable (for the deferred purchase price
of Property or services) from time to time incurred in the ordinary course of
business and guaranties by the US Borrowers given in the ordinary course of
business of any such obligations incurred or accrued by any other US Borrower
and guaranties by the Canadian Borrowers given in the ordinary course of
business of any such obligations incurred or accrued by any other Canadian
Borrowers;
(d) obligations for current taxes, assessments and other
governmental charges and taxes, assessments or other governmental charges which
are not yet due or are being contested in good faith by appropriate action or
proceeding promptly initiated and diligently conducted, if reserves required
pursuant to Section 6.2 hereof have been established with respect thereto;
(e) Indebtedness owing pursuant to Swap Agreements entered
into in the ordinary course of business for the purpose of hedging against risks
actually incurred by the Borrowers with respect to interest rates, $/C$ exchange
rates and commodity prices;
(f) Indebtedness consisting of loans and advances made by any
US Borrower to any other US Borrower and by any Canadian Borrower to any other
Canadian Borrower;
(g) Indebtedness in respect of Capital Lease Obligations and
purchase money Indebtedness incurred to finance the lease, purchase or
construction of Capital Assets; provided, that, the aggregate amount of such
Indebtedness incurred during (1) Tier I Reduced Availability Periods shall not
exceed $50,000,000, and (2) Tier II Reduced Availability Periods shall not
exceed $25,000,000;
(h) unsecured Indebtedness; provided, that, the aggregate
amount of such Indebtedness incurred during (1) Tier I Reduced Availability
Periods shall not exceed $50,000,000, and (2) Tier II Reduced Availability
Periods shall not exceed $25,000,000;
(i) Indebtedness of a Credit Party acquired by a Borrower or
another Credit Party which existed at the time of the acquisition of such Credit
Party (and was not created in anticipation of such acquisition);
(j) Indebtedness of Target in an amount not exceeding
$65,000,000 (or the $ equivalent thereof at the time such Indebtedness is
incurred); or
(k) Indebtedness incurred to refinance or replace (but not
increase) any Indebtedness described in clauses (b), (g), (h) or (i) preceding.
Notwithstanding the foregoing, no Credit Party shall incur Indebtedness pursuant
to clauses (g), (h) or (j) which requires scheduled principal amortization
(including payments at maturity) in any Fiscal Year
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through and including the Fiscal Year ending December 31, 2010 in an aggregate
amount greater than $10,000,000.
Section 7.3 LIENS. Create, incur, assume or suffer to exist, or permit
any other Credit Party to create, incur, assume or suffer to exist, any Lien on
any of its Property now owned or hereafter acquired to secure any Indebtedness
of any Credit Party or any other Person, other than (collectively, the
"PERMITTED LIENS"):
(a) Liens existing on the date hereof and set forth on
Schedule 7.3;
(b) Liens securing the Lender Indebtedness;
(c) Liens for taxes, assessments or other governmental charges
or levies not yet due or which are being contested in good faith by appropriate
action or proceedings and with respect to which reserves required by Section 6.2
hereof are maintained;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen, workmen, and other Liens
imposed by law created in the ordinary course of business for amounts which are
not past due for more than 30 days or which are being contested in good faith by
appropriate action or proceedings and with respect to which reserves required by
Section 6.2 are maintained;
(e) Liens incurred or deposits or pledges made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, old age or other similar
obligations, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(f) minor irregularities in title, easements, rights-of-way,
restrictions, servitudes, permits, reservations, exceptions, conditions,
covenants and other similar charges or encumbrances not materially interfering
with the occupation, use and enjoyment by any Borrower of any of their
respective Properties in the normal course of business or materially impairing
the value thereof;
(g) any obligations or duties affecting any of the Property of
any Credit Party to any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially impair the use of
such Property for the purposes for which it is held;
(h) Liens securing Indebtedness permitted by Section 7.2(g)
provided that (1) such Liens relate only to the Capital Asset leased, acquired
or constructed with the proceeds of Indebtedness secured by such Lien, (2) the
creation of such Lien or the incurrence of the Indebtedness secured by such Lien
does not violate this Agreement or any of the other Financing Documents, (3)
such Lien is incurred at the time of, or within ninety (90) days after, the
acquisition or completion of construction of the Capital Asset encumbered by
such Liens, and (4) the principal amount of the Indebtedness secured does not
exceed the total purchase price (inclusive of construction costs) of the Capital
Asset encumbered by such Lien; and
(i) exceptions, qualifications and reservations in respect of
title to Real Property under applicable federal, state, provincial, territorial,
municipal and local statutes, regulations, laws, by-laws and ordinances but only
to the extent of the general application of such matters and not arising as a
result of the failure of Borrowers to comply with such matters;
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provided, however, that the foregoing list of Permitted Liens is not intended
to, and shall not be construed as, subordinating or postponing, or as an
agreement to subordinate or postpone, any Lien created by any of the Financing
Documents to any such permitted Lien.
Section 7.4 MERGERS, CONSOLIDATIONS, ETC.. Merge into or with or
consolidate or amalgamate with, or permit any other Credit Party to merge into
or with or consolidate or amalgamate with, any other Person; provided, that:
(a) any US Borrower shall be permitted to consolidate or merge
with any other Person so long as a US Borrower shall be the surviving entity;
provided, that if such Person is not a Borrower, such merger or consolidation
shall only be permitted if such transaction also constitutes an acquisition
permitted by Section 7.17;
(b) any Canadian Borrower shall be permitted to consolidate,
amalgamate or merge with any Person so long as a Canadian Borrower shall be the
resulting entity); provided, that if such Person is not a Borrower, such merger,
amalgamation or consolidation shall only be permitted if such transaction also
constitutes an acquisition permitted by Section 7.17, and
(c) any Credit Party other than a Borrower shall be permitted
to merge or consolidate with any other Person so long as either (1) such Credit
Party is the surviving entity and remains a Subsidiary of the Company after
giving effect thereto and such transaction constitutes an acquisition permitted
by Section 7.17, or (2) such transaction constitutes a disposition which is
permitted pursuant to Section 7.5.
Section 7.5 ASSET DISPOSITIONS. Sell, lease or otherwise dispose of, or
permit any other Credit Party to sell, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or any part of its Property
to any other Person (including pursuant to any merger or consolidation of any
Credit Party with or into any other Person) other than:
(a) the sale, assignment or disposition by any Credit Party of
all or any part of its Property to any US Borrower;
(b) the sale, assignment or disposition by any Canadian
Borrower of all or any part of its Property to any other Canadian Borrower;
(c) the sale, assignment or disposition by any Credit Party
which is not a Borrower of all or any part of its Property to any other Credit
Party;
(d) the sale of inventory in the ordinary course of business
of the Credit Parties;
(e) the sale, assignment or disposition by any Credit Party of
any part of its property which is obsolete or otherwise no longer used or useful
in the operation of the business of the Credit Parties;
(f) the proposed sale of specific assets associated with
Maverick's hollow structural sections (HSS) product line to Atlas Tube Inc.; and
(g) the sale, assignment or conveyance of any other Property
of any Credit Party; provided that the aggregate fair market value of all such
Property sold, assigned or conveyed during (1) Tier I Reduced Availability
Periods or which results in a Tier I Reduced Availability Period shall not
exceed $10,000,000, and (2) Tier II Reduced Availability Periods or which
results in a Tier II Reduced Availability Period shall not exceed $5,000,000;
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Notwithstanding the foregoing, in no event will Borrowers sell, assign or convey
(x) a Principal Property, (y) the Equity of any Borrower (other than the
issuance of Equity by the Company permitted hereunder and any issuance, sale,
assignment or conveyance of Equity of a Borrower to another Borrower), or (y)
accounts receivable of a Borrower (with or without recourse) other than the sale
or assignment of accounts receivable which are not Eligible Accounts in the
ordinary course of business for collection purposes.
Section 7.6 RESTRICTED PAYMENTS. Make any Restricted Payment (or
declare or otherwise become obligated to make any Restricted Payment), or permit
any other Credit Party to do any of the foregoing, other than:
(a) any Credit Party may make Restricted Payments to any
Borrower,
(b) any Credit Party which is not a Borrower may make
Restricted Payments to any other Credit Party,
(c) so long as no Default or Event of Default has occurred
which is continuing, the Company may make Restricted Payments required under
employee stock option plans, management stock plans and other compensation
arrangements in an aggregate amount not exceeding $10,000,000 per Fiscal Year;
and
(d) so long as no Default or Event of Default has occurred
which is continuing the Credit Parties may make other Restricted Payments;
provided, that (1) the aggregate amount of such Restricted Payments made during,
or which results in, Tier I Reduced Availability Periods shall not exceed
$50,000,000, and (2) no Restricted Payments shall be permitted during, or which
results in, a Tier II Reduced Availability Period.
Section 7.7 INVESTMENTS, LOANS, ETC. Make, permit or hold any loans to
or investments in any Person, or permit any other Credit Party to make, permit
or hold any loans to or investments in any Person, other than:
(a) investments, loans or advances, the material details of
which have been set forth on Schedule 7.7;
(b) investments in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;
(c) investments in certificates of deposit of maturities less
than one year, issued by commercial banks in the United States having capital
and surplus in excess of $500,000,000 and having short-term credit ratings of at
least A1 and P1 by Standard & Poor's Ratings Group and Xxxxx'x Investors
Service, Inc., respectively;
(d) investments in commercial paper of maturities of not more
than 180 days rated the highest credit rating obtainable from Standard & Poor's
Ratings Group and Xxxxx'x Investors Service, Inc.;
(e) investments in securities that are obligations of the
United States government purchased by any Credit Party under fully
collateralized repurchase agreements pursuant to which arrangements are made
with selling financial institutions (being a financial institution having
unimpaired
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capital and surplus of not less than $5,000,000,000 and with short-term credit
ratings of at least A1 and P1 by Standard & Poor's Ratings Group and Xxxxx'x
Investors Service, Inc., respectively) for such financial institutions to
repurchase such securities within 30 days from the date of purchase by any
Credit Party, and other similar short-term investments made in connection with
any Credit Party's cash management practices;
(f) investments in money market mutual funds having assets in
excess of $2,000,000,000;
(g) investments in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
Government of Canada or of any Canadian province (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the
Government of Canada or of such Canadian province), in each case maturing within
one year from the date of acquisition thereof; (1) investments in commercial
paper maturing within 180 days from the date of acquisition thereof and having,
at such date of acquisition, the highest credit rating obtainable from CBRS
Inc., Dominion Bond Rating Service, Xxxxx'x Investor Service, Inc. or Standard
and Poor's Corporation; (2) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of Canada or of any Canadian province which has a
combined capital surplus and undivided profits of not less than C$250,000,000;
and (3) investments in fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (1) above and entered
into with a financial institution satisfying the criteria described in clause
(3) above;
(h) loans, advances and investments by any US Borrower to or
in any other US Borrower and loans, advances and investments by any Canadian
Borrower to or in any Canadian Borrower;
(i) loans, advances and investments by any US Borrower to or
in any Canadian Borrower; provided, that, the aggregate amount of all loans,
advances and investments made by US Borrowers to or in Canadian Borrowers
pursuant to this clause (i) shall not exceed $20,000,000 outstanding at any
time;
(j) (1) loans, advancements and investments to fund the
purchase price for the Target Acquisition (including related transaction costs),
and (2) other loans, advances and investments in Target; provided, that the
aggregate amount of all such other loans, advances and investments in Target
made pursuant to this clause (j) (2) during the existence of, or which results
in, (i) a Tier I Reduced Availability Period shall not exceed $20,000,000, and
(ii) a Tier II Reduced Availability Period shall not exceed $10,000,000;
(k) investments made in connection with acquisitions permitted
pursuant to Section 7.17.
(l) loans, advances and investments in or to any Person;
provided, that, the aggregate amount of all loans, advances and investments made
pursuant to this clause (l) during the existence of, or which results in, (1) a
Tier I Reduced Availability Period shall not exceed $10,000,000, and (2) a Tier
II Reduced Availability Period shall not exceed $2,000,000.
Section 7.8 SALES AND LEASEBACKS. Enter into, any arrangement, directly
or indirectly, with any Person whereby any Credit Party shall sell or transfer
any Property, whether now owned or hereafter acquired, and whereby any Credit
Party shall then or thereafter rent or lease as lessee such Property or
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any part thereof or other Property which a Credit Party intends to use for
substantially the same purpose or purposes as the Property sold or transferred
(a "SALE-LEASEBACK TRANSACTION"); provided, that, this Section 7.8 shall not
prohibit Sale-Leaseback Transactions not involving a Principal Property.
Section 7.9 NATURE OF BUSINESS. Engage in, or permit any other Credit
Party to engage in, any business other than the businesses in which they are
engaged as of the Closing Date or that are directly related thereto, which
businesses in which the Company and each Borrower are currently involved are
described in Section 7.9 hereto.
Section 7.10 ERISA COMPLIANCE
(a) Engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which any US Credit Party or any ERISA Affiliate
could be subjected to either a civil penalty assessed pursuant to Sections
502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code which could reasonably be expected to have a Material Adverse Effect;
(b) Terminate, or permit any other US Credit Party or any
ERISA Affiliate to terminate, any Plan in a manner, or take any other action
with respect to any Plan, which could reasonably be expected to result in any
material liability of any US Credit Party or any ERISA Affiliate to the PBGC or
any other Governmental Authority;
(c) Fail to make, or permit any other US Credit Party or any
ERISA Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or applicable law,
any US Credit Party or any ERISA Affiliate is required to pay as contributions
thereto;
(d) Permit to exist, or allow any other US Credit Party or any
ERISA Affiliate to permit to exist, any accumulated funding deficiency within
the meaning of Section 302 of ERISA or Section 412 of the Code, whether or not
waived, with respect to any Plan (1) in any amount which could reasonably be
expected to cause a Material Adverse Effect or (2) that when combined with any
accumulated funding deficiencies with respect to all Plans, including, but not
limited to accumulated funding deficiencies with respect to Plans of Canadian
Credit Parties, would exceed $15,000,000;
(e) Contribute to or assume an obligation to contribute to, or
permit any US Credit Party or any ERISA Affiliate to contribute to or assume an
obligation to contribute to, any "multiemployer plan" as such term is defined in
Section 3(37) or 4001(a)(3) of ERISA;
(f) Acquire, or permit any other US Credit Party or any ERISA
Affiliate to acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to any US Credit Party or with respect to
any ERISA Affiliate of any US Credit Party if such Person sponsors, maintains or
contributes to, or at any time preceding such acquisition has sponsored,
maintained, or contributed to, any "multiemployer plan" as such term is defined
in Section 3(37) or 4001(a)(3) of ERISA;
(g) Fail to pay, or cause to be paid, to the PBGC in a timely
manner, and without incurring any late payment or underpayment charge or
penalty, all premiums required pursuant to Sections 4006 and 4007 of ERISA;
(h) Amend, or permit any other US Credit Party or any ERISA
Affiliate to amend, a Plan resulting in an increase in current liability such
that any US Credit Party or any ERISA Affiliate is required to provide security
to such Plan under Section 401(a)(29) of the Code;
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(i) Incur, or permit any other US Credit Party or any ERISA
Affiliate to incur, a material liability to or on account of a Plan under
Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or
(j) Permit, or allow any other US Credit Party or any ERISA
Affiliate to permit, the actuarial present value of the benefit liabilities
(computed on an accumulated benefit obligation basis in accordance with GAAP)
under all Plans in the aggregate to exceed the current value of the assets of
all Plans in the aggregate that are allocable to such benefit liabilities.
Section 7.11 CANADIAN PLAN COMPLIANCE. As regards to any Canadian
Party:
(a) Terminate, or permit to terminate, any Plan in a manner,
or take any other action with respect to any Plan, which could reasonably be
expected to result in any material liability of such Canadian Credit Party to
any Governmental Authority;
(b) Fail to make, or permit any other Canadian Credit Party to
fail to make, full payment when due of all amounts which, under the provisions
of any Plan, agreement relating thereto or applicable law, such Canadian Credit
Party is required to pay as contributions thereto, except where the failure to
make such payments could not reasonably be expected to have Material Adverse
Effect;
(c) Permit to exist, or allow any other Canadian Credit Party
to permit to exist, any accumulated funding deficiency, whether or not waived,
with respect to any Plan (x) in an amount which could reasonably be expected to
have a Material Adverse Effect or (y) that when combined with any accumulated
funding deficiencies with respect to all Plans, including, but not limited to
accumulated funding deficiencies with respect to Plans of US Credit Parties,
would exceed $15,000,000;
(d) Contribute to or assume an obligation to contribute to, or
permit any other Canadian Credit Party to contribute to or assume an obligation
to contribute to, any "specified multi-employer plan" as such term is defined in
the Employment Pensions Plans Act (Alberta);
(e) Acquire, or permit any other Canadian Credit Party to
acquire, an interest in any Person if such Person sponsors, maintains or
contributes to, or at any time preceding such acquisition has sponsored,
maintained, or contributed to any "specified multi-employer plan" as such term
is defined in the Employment Pension Plans Act (Alberta);
(f) Permit, or allow any other Canadian Credit Party to
permit, the actuarial present value of the benefit liabilities (computed on an
accumulated benefit obligation basis in accordance with GAAP) under all Plans in
the aggregate to exceed the current value of the assets of all Plans in the
aggregate that are allocable to such benefit liabilities, in each case only to
the extent such liabilities and assets relate to benefits to be paid to
employees of such Canadian Credit Party, by an amount that could reasonably be
expected to cause a Material Adverse Effect.
Section 7.12 NEGATIVE PLEDGE AGREEMENTS. Create, incur, assume or
suffer to exist, any contract, agreement or understanding which in any way
prohibits or restricts the granting, conveying, creation or imposition of any
Lien on any Property of any Credit Party, or which requires the consent of or
notice to other Persons in connection therewith, other than
(a) this Agreement and the other Financing Documents;
(b) the agreements and arrangements described on Schedule 7.12
hereto, and
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(c) any agreements governing any Indebtedness secured by Liens
otherwise permitted hereby provided that any such prohibition or limitation is
only applicable to the Property encumbered by such Lien.
Section 7.13 TRANSACTIONS WITH AFFILIATES. Except to the extent
otherwise specifically permitted herein, enter into any transaction or series of
transactions, with Affiliates of any Credit Party which involve an outflow of
money or other Property from any Credit Party to an Affiliate of any Credit
Party, including but not limited to repayment of Indebtedness, management fees,
compensation, salaries, asset purchase payments or any other type of fees or
payments similar in nature except for those which are in the ordinary course of
business of the Credit Parties and are on fair and reasonable terms no less
favorable than would be obtained in a comparable arm's length transaction with a
Person not an Affiliate.
Section 7.14 EQUITY. Authorize or issue Equity to any Person other than
(a) issuances of Equity of the Company if no Change of Control results
therefrom, or (b) issuance of Equity by any Borrower to any other Borrower;
provided, that in no event shall the Company issue any preferred stock or other
equity securities subject to a mandatory redemption right which is exercisable
prior to the first anniversary of the Maturity Date.
Section 7.15 CAPITAL EXPENDITURES. Make Capital Expenditures during any
Rolling Period in excess of $40,000,000; provided, that Capital Expenditures
made in the absence of a Tier II Reduced Availably Period and which do not
result in a Tier II Reduced Availability Period shall be excluded from the
calculation of this covenant.
Section 7.16 RESTRICTION ON INTERCOMPANY TRANSACTIONS. Create or
otherwise cause or permit to exist or become effective, any consensual
encumbrance or restriction of any kind on the ability of any Credit Party to (a)
pay dividends or make any other distribution in respect of such Credit Party's
Equity or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any indebtedness owed to any Credit Party, (c) make any
loan or advance to any Credit Party, or sell, lease or transfer any of its
Property to any Credit Party other than (1) the agreements and arrangements
described on Schedule 7.16 hereto, and (2) agreements and arrangements
applicable to any Credit Party acquired by any other Credit Party after the date
hereof provided, that such agreements and arrangements were in effect prior to
such acquisition and were not created in contemplation thereof, such agreements
and arrangements shall only be applicable to such Credit Party.
Section 7.17 ACQUISITIONS. Acquire or create any Subsidiary or the
assets comprising any operating division or unit of any other Person unless (a)
immediately before and after giving effect thereto, no Default or Event of
Default exists (including, without limitation, a Default under Section 7.9), (b)
such acquisition has been approved by the board of directors or comparable
authority of the seller and is not otherwise hostile, and (c) no Tier II Reduced
Availability Period exists or will result therefrom; provided, that, the
purchase price for such acquisitions (including (i) all Indebtedness which is
assumed pursuant to such acquisition, and (ii) all amounts payable under any
non-compete agreements, earn outs, seller financing or other deferred
consideration) completed during the existence of a Tier I Reduced Availability
Period or which results in a Tier I Reduced Availability Period shall not exceed
(1) in the case of acquisitions of assets (other than Equity) located in the
United States or Canada by a Borrower or acquisitions of Equity of a Person
organized in the United States or Canada who becomes a Borrower at the time of
such acquisition, $50,000,000 for a single acquisition or series of related
acquisitions, or $100,000,000 in the aggregate, and (2) in the case of all other
acquisitions, $10,000,000 for a single acquisition or series of related
acquisitions, or $50,000,000 in the aggregate. Subject to the satisfaction of
the conditions set forth in clauses (a) and (b) of this Section 7.17, the
Premoca Acquisition shall be permitted regardless of the level of Excess
Availability provided that the purchase price for such acquisition (calculated
as set forth in clause (c) preceding) does not exceed $12,500,000.
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Section 7.18 FISCAL YEAR. Change its Fiscal Year.
Section 7.19 EXCHANGE NOTES.
(a) enter into any amendment, modification or waiver of any of
the Exchange Notes Documents;
(b) designate any Indebtedness other than the Lender
Indebtedness as "Designated Senior Indebtedness" (as defined in the Exchange
Notes Indenture) for purposes of the Exchange Notes Indenture, or
(c) make any payment of principal with respect to the Exchange
Notes or any payment to repurchase, redeem or otherwise retire any of the
Exchange Notes, including the payment in cash of any Principal Return (as
defined in the Exchange Notes Indenture), or permit any Credit Party to do the
foregoing, except the Company may pay Principal Return with respect to (and
deliver the other consideration in respect of the Conversion Value (as defined
in the Exchange Notes Indenture), as contemplated by the Exchange Notes, upon
conversion thereof) Exchange Notes presented for conversion pursuant to and in
accordance with the terms of the Exchange Notes Indenture (each such payment in
respect of Principal Return being, a "PRINCIPAL RETURN PAYMENT") so long as (1)
the Borrowers' Fixed Charge Coverage Ratio for the Rolling Period most recently
ended for which Current Information is available as of the date of such
Principal Return Payment is not less than 1.00 to 1.00 and assuming that for
purposes of calculating the Fixed Charge Coverage Ratio for such Rolling Period
such Principal Return Payment occurred on the first day of such applicable
Rolling Period, and (2) no Default exists or will exist after giving effect to
such Principal Return Payment.
ARTICLE 8
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "EVENT OF DEFAULT"):
Section 8.1 PAYMENTS.
(a) Any of the Borrowers shall fail to pay when due
(including, but not limited to, any mandatory prepayment required pursuant to
Section 2.9) any principal of any Loan, or any Reimbursement Obligation or any
fee or any other amount payable hereunder or under the Fee Letter or any other
Financing Document; or
(b) any of the Borrowers shall fail to pay when due any
interest on any Loan and such failure to pay shall continue unremedied for a
period of (3) three days.
Section 8.2 COVENANTS WITHOUT NOTICE. Any of the Borrowers shall fail
to observe or perform any covenant or agreement contained in Article 4, Section
6.1, Section 6.5, Section 6.7, Section 6.10 or Article 7.
Section 8.3 OTHER COVENANTS. Any Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement, other than those
referred to in Section 8.1 or Section 8.2 and, if capable of being remedied,
such failure shall remain unremedied for 20 days after the earlier of (a) any
Credit Party's obtaining knowledge thereof, or (b) written notice thereof shall
have been given to the Company or any Borrower by any Lender, any Issuing Bank,
the Canadian Administrative Agent or the Administrative Agent.
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Section 8.4 OTHER FINANCING DOCUMENT OBLIGATIONS. Default is made in
the due observance or performance by any Borrower or any other Obligated Party
of any of the covenants or agreements contained in any Financing Document other
than this Agreement, and such default continues unremedied beyond the expiration
of any applicable grace period which may be expressly allowed under such
Financing Document.
Section 8.5 REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by any Borrower or any other Obligated Party or any of
any Borrower's or any other Obligated Party's officers herein or in any other
Financing Document, or in any certificate, request or other document furnished
pursuant to or under this Agreement or any other Financing Document, shall have
been incorrect in any material respect as of the date when made or deemed to be
made.
Section 8.6 NON-PAYMENTS OF OTHER INDEBTEDNESS. Any Credit Party shall
fail to make any payment or payments of principal of or interest on any
Indebtedness of such Credit Party which Indebtedness is in an aggregate amount
of $1,000,000 or greater after giving effect to any applicable grace period.
Section 8.7 DEFAULTS UNDER OTHER AGREEMENTS. Any Credit Party shall
fail to observe or perform any covenant or agreement contained in any
agreement(s) or instrument(s) relating to Indebtedness of any Credit Party of
$1,000,000 or more in the aggregate within any applicable grace period, or any
other event shall occur, if the effect of such failure or other event is to
accelerate, or to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of $1,000,000 or more in the aggregate of such
Indebtedness; or $1,000,000 or more in the aggregate of any such Indebtedness
shall be, or if as a result of such failure or other event may be, required to
be prepaid (other than prepayments resulting from excess cash flow) in whole or
in part prior to its stated maturity.
Section 8.8 BANKRUPTCY UNDER US LAW. Any Obligated Party (which for the
purposes of this Section 8.8 shall not include any Canadian Borrower) shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy" as now or hereafter in effect, or any successor
thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced against any
Obligated Party shall commence and the petition is not controverted within ten
days, or is not stayed or dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or any substantial part of the property of any Obligated
Party; or any Obligated Party commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to any Obligated Party or there is commenced
against any Obligated Party any such proceeding which remains unstayed or
undismissed for a period of 60 days; or any Obligated Party is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or any Obligated Party suffers any appointment of
any custodian or the like for it or any substantial part of its Property to
continue undischarged or unstayed for a period of 60 days; or any Obligated
Party makes a general assignment for the benefit of creditors; or any Obligated
Party shall fail to pay, or shall state in writing that it is unable to pay, or
shall be unable to pay, its debts generally as they become due; or any Obligated
Party shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Obligated Party for the purpose of effecting any of the foregoing.
Section 8.9 BANKRUPTCY UNDER CANADIAN LAW.
(a) Any Canadian Borrower (1) becomes insolvent, or generally
does not or becomes unable to pay its debts or meet its liabilities as the same
become due, or admits in writing its inability to pay its debts generally, or
declares any general moratorium on its indebtedness, or proposes a
94
compromise or arrangement between it and any class of its creditors; (2) commits
an act of bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes
an assignment of its property for the general benefit of its creditors under
such Act, or makes a proposal (or files a notice of its intention to do so)
under such Act; (3) institutes any proceeding seeking to adjudicate it an
insolvent, or seeking liquidation, dissolution, winding-up, reorganization,
compromise, arrangement, adjustment, protection, moratorium, relief, stay of
proceedings of creditors generally (or any class of creditors), or composition
of it or its debts or any other relief, under any federal, provincial or foreign
Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors (including the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangement Act (Canada) and any applicable corporations legislation)
or at common law or in equity, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding; (4) applies
for the appointment of, or the taking of possession by, a receiver, interim
receiver, receiver/manager, sequestrator, conservator, custodian, administrator,
trustee, liquidator or other similar official for it or any substantial part of
its property; or (5) threatens to do any of the foregoing, or takes any action,
corporate or otherwise, to approve, effect, consent to or authorize any of the
actions described in this Section 8.9, or otherwise acts in furtherance thereof
or fails to act in a timely and appropriate manner in defense thereof.
(b) Any petition is filed, application made or other
proceeding instituted against or in respect of any Canadian Borrower: (1)
seeking to adjudicate it an insolvent; (2) seeking a receiving order against it
under the Bankruptcy and Insolvency Act (Canada); (3) seeking liquidation,
dissolution, winding-up, reorganization, compromise, arrangement, adjustment,
protection, moratorium, relief, stay of proceedings of creditors generally (or
any class of creditors), or composition of it or its debts or any other relief
under any federal, provincial or foreign Law now or hereafter in effect relating
to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors (including the Bankruptcy and
Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada) and
any applicable corporations legislation) or at common law or in equity; or (4)
seeking the entry of an order for relief or the appointment of, or the taking of
possession by, a receiver, interim receiver, receiver/manager, sequestrator,
conservator, custodian, administrator, trustee, liquidator or other similar
official for it or any substantial part of its property; and in any case
describe in clause (b)(1) through (4) such petition, application or proceeding
continues undismissed, or unstayed and in effect, for a period of 60 days after
the institution thereof, provided that if an order, decree or judgment is
granted or entered (whether or not entered or subject to appeal) against any
Canadian Borrower thereunder in the interim, such 60-day period will cease to
apply, and provided further that if the Canadian Borrower files an answer
admitting the material allegations of a petition filed against it in any such
proceeding, such 60-day period will cease to apply.
Section 8.10 MONEY JUDGMENT. Judgments or orders for the payment of
money involving in the aggregate at any time a liability (net of any insurance
proceeds or indemnity payments actually received in respect thereof prior to or
within 30 days from the entry thereof, or to be received in respect thereof in
the event any appeal thereof shall be unsuccessful) of more than $1,000,000, (or
the Dollar Equivalent thereof) or that would otherwise have a Material Adverse
Effect shall be rendered against any Obligated Party and such judgment or order
shall continue unsatisfied in accordance with the terms of such judgment or
order (in the case of a money judgment) and in effect for a period of 30 days
during which execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement or otherwise).
Section 8.11 DISCONTINUANCE OF BUSINESS. Except as permitted by Section
7.4 and Section 7.5, any Credit Party shall cease to be principally engaged in
the businesses and operations in which such Credit Party was principally engaged
on the Closing Date.
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Section 8.12 FINANCING DOCUMENTS. Any Material Provision of any of the
Financing Documents after delivery thereof shall for any reason, except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable (except as enforceability may be limited as
stated in Section 5.3) in accordance with its terms, or, in the case of any of
the Security Instruments, cease to create a valid and perfected Lien of the
priority contemplated thereby on any of the collateral purported to be covered
thereby, or any Obligated Party shall so state in writing. As used in this
Section 8.12, "MATERIAL PROVISION" shall mean (a) with respect to this
Agreement, any material term, covenant, or agreement set forth therein, and (b)
with respect to any other Financing Document, any provision if the validity and
enforceability thereof is necessary for such Financing Document to accomplish
its stated, or clearly intended, purpose or otherwise necessary in order for any
Lender to enforce any material right or remedy under any Financing Document.
Section 8.13 CHANGE OF CONTROL. The occurrence of a Change of Control.
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written or telex
request of the Required Lenders, shall, by written notice to the Borrowers, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, the Canadian Administrative Agent or any Lender, to
enforce its claims against any Credit Party: (a) declare the Revolving Credit
Commitment, the US Swingline Commitment, and other lending obligations, if any,
terminated, whereupon the Revolving Credit Commitment and other lending
obligations, if any, of each Lender shall terminate immediately; or (b) declare
the entire principal amount of and all accrued interest on all Lender
Indebtedness then outstanding to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest, notice of protest or
dishonor, notice of acceleration, notice of intent to accelerate or other notice
of any kind, all of which are hereby expressly waived by each Credit Party, and
thereupon take such action as it may deem desirable under and pursuant to the
Financing Documents; provided, that, if an Event of Default specified in Section
8.8 or Section 8.9 shall occur, the result which would occur upon the giving of
written notice by the Administrative Agent to the Borrowers, as specified in
clauses (a) and (b) above, shall occur automatically without the giving of any
such notice; or (c) if any US Letter of Credit shall then be outstanding, demand
L/C Cover which the US Borrowers shall immediately pay to the Administrative
Agent for deposit in a cash collateral account maintained by the Administrative
Agent; (d) if any Canadian Letter of Credit shall then be outstanding, demand
L/C Cover which the Canadian Borrowers shall immediately jointly and severally
pay to the Canadian Administrative Agent for deposit in a cash collateral
account maintained by the Canadian Administrative Agent, or (e) if any B/A shall
be outstanding, demand B/A Cover which the Canadian Borrowers shall immediately
jointly and severally pay to the Canadian Administrative Agent for deposit in a
cash collateral account maintained by the Canadian Administrative Agent.
ARTICLE 9
THE AGENTS
Section 9.1 APPOINTMENT OF AGENTS. Each Lender (and each Secured
Affiliate by and through its affiliated Lender) and each Issuing Bank hereby
irrevocably appoints JPMorgan Chase Bank, N.A. as the Administrative Agent and
JPMorgan Chase Bank, N.A., Toronto Branch as Canadian Administrative Agent
authorizes each such Agent to take such actions on its behalf, including
execution of the other Financing Documents, and to exercise such powers as are
delegated to such Agent by the terms of the Financing Documents, together with
such actions and powers as are reasonably incidental thereto.
Section 9.2 RIGHTS AND POWERS. Each Person serving as an Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as
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though it were not an Agent, and such Person and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Credit Parties or any other Affiliate thereof as if it were not an Agent
hereunder.
Section 9.3 LIMITATION OF DUTIES OF AGENTS. No Agent shall not have any
duties or obligations except those expressly set forth in the Financing
Documents. Without limiting the generality of the foregoing, (a) no Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) no Agent shall have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Financing
Documents that such Agent is required to exercise in writing as directed by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 10.2), and (c) except
as expressly set forth in the Financing Documents, no Agent shall have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to any Credit Party that is communicated to or obtained by
the Person serving as such Agent or any of its Affiliates in any capacity. No
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
10.2) or in the absence of its own gross negligence or willful misconduct. No
Agent shall be deemed to have knowledge of any Default unless and until written
notice thereof is given to such Agent by the Borrower or a Lender, and no Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any
Financing Document, (ii) the contents of any certificate, report or other
document delivered hereunder or in connection with any Financing Document, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Financing Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Financing Document or any
other agreement, instrument or document, (v) the creation, perfection or
priority of Liens on the Collateral or the existence of the Collateral, or (vi)
the satisfaction of any condition set forth in Article 3 or elsewhere in any
Financing Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
Section 9.4 RELIANCE BY AGENTS. Each Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. Each Agent may consult with legal counsel (who
may be counsel for the Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
Section 9.5 DELEGATION OF DUTIES; SUB AGENTS. Each Agent may perform
any and all its duties and exercise its rights and powers by or through any one
or more sub-agents appointed by such Agent. Each Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
each Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as each Agent.
Section 9.6 RESIGNATION; SUCCESSOR AGENT. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in this
paragraph, any Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor
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shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, the Issuing
Banks and the Secured Affiliates, appoint a successor Agent which shall be a
commercial bank or an Affiliate of any such commercial bank. Upon the acceptance
of its appointment as Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrowers to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the Agent's
resignation hereunder, the provisions of this Article shall continue in effect
for the benefit of such retiring Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of
them while it was acting as Agent.
Section 9.7 LACK OF RELIANCE ON AGENTS. Each Lender acknowledges that
it has, independently and without reliance upon any Agent or any other Lender
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other
Finance Document or related agreement or any document furnished hereunder or
thereunder.
Section 9.8 REPORTS. Each Lender hereby agrees that (a) it has
requested a copy of each Report prepared by or on behalf of Agent; (b) no Agent
(i) makes any representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or omission contained in or relating to a Report and
(ii) shall be liable for any information contained in any Report; (c) the
Reports are not comprehensive audits or examinations, and that any Person
performing any field examination will inspect only specific information
regarding the Credit Parties and will rely significantly upon the Credit
Parties' books and records, as well as on representations of the Credit Parties'
personnel and that no Agent undertakes any obligation to update, correct or
supplement the Reports; (d) it will keep all Reports confidential and strictly
for its internal use, not share the Report with any Credit Party or any other
Person except as otherwise permitted pursuant to this Agreement; and (e) without
limiting the generality of any other indemnification provision contained in this
Agreement, it will pay and protect, and indemnify, defend, and hold each Agent
and any such other Person preparing a Report harmless from and against, the
claims, actions, proceedings, damages, costs, expenses, and other amounts
(including reasonable attorney fees) incurred by any such Person as the direct
or indirect result of any third parties who might obtain all or part of any
Report through the indemnifying Lender.
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify by notice to the Canadian
Administrative Agent, the Administrative Agent and the Company. Each such
notice, request or other communication shall be effective (a) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (b) if given by any other means
(including, but not limited to, by air courier), when delivered at the address
specified on the signature pages hereto; provided that notices to the
Administrative Agent or the Canadian Administrative Agent shall not be effective
until actually and physically received. Any notice to be given to any Borrower
or to all Borrowers pursuant to
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this Agreement or any of the other Financing Documents may be given to the
Company or to any other Borrower, and if given to the Company or to any Borrower
in the manner set forth in this Section 10.1, such notice shall be deemed to be
effective notice to all Borrowers for purposes of this Agreement.
Section 10.2 AMENDMENTS AND WAIVERS. Neither this Agreement nor any
other Financing Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.2. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent or, as applicable, the Canadian
Administrative Agent, shall, from time to time, (x) enter into with the
Borrowers, written amendments, supplements or modifications hereto and to the
other Financing Documents for the purpose of adding any provisions to this
Agreement or to the other Financing Documents or changing in any manner the
rights or obligations of the Lenders or the Borrowers hereunder or thereunder or
(y) waive at the Borrowers' request, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other
Financing Documents or any Default and its consequences; provided, however, that
no such waiver and no such amendment, supplement or modification shall:
(a) reduce the amount or extend the scheduled date of maturity
of any Loan or any Reimbursement Obligation or of any scheduled installment
thereof or reduce the stated rate of any interest or fee payable hereunder or
extend the date of any payment thereof or modify any provision that provides for
the ratable sharing by the Lenders (or any sub-set of the Lenders) of any
payment or prepayment of Lender Indebtedness to provide for a non-ratable
sharing thereof or increase the amount or extend the expiration date of any
Lender's Revolving Credit Commitment or amend, modify or waive any provision of
Section 2.9(f), (g), (h) or (i) or Section 2.18, in each case without the prior
written consent of each Lender directly affected thereby;
(b) (i) change the currency in which any Loan or Reimbursement
Obligation is payable or amend, modify or waive any provision of this Section
10.2 or reduce the percentage specified in the definition of Required Lenders,
in each case without the written consent of all of the Lenders;
(c) release all or substantially all of the Collateral without
the written consent of all of the Lenders provided that the Administrative Agent
or the Canadian Administrative Agent, as applicable, shall release (without
consent from the Lenders) any Collateral sold, transferred or otherwise disposed
of as permitted by Section 7.4;
(d) amend, modify or waive any provision of Article 9 without
the written consent of the Agent directly affected thereby;
(e) amend, modify or waive (1) any Letter of Credit Liability
without the written consent of the applicable Issuing Bank or (2) any Letter of
Credit without the consent of each Lender if such Letter of Credit, after giving
effect to such amendment, modification or waiver, would no longer satisfy the
requirements hereof if such Letter of Credit was being issued ab initio at such
time, provided that in all cases other than clauses (1) or (2), only the consent
of the applicable Issuing Bank shall be required to amend, modify or waive any
Letter of Credit;
(f) amend the definitions of US Borrowing Base, Eligible
Account Advance Percentage, Eligible Account, Eligible Inventory, and US Fixed
Asset Component, Eligible Xxxx and Hold Accounts and the advance rates specified
in the definition of US Borrowing Base (other than to the extent already
permitted to be reduced at the discretion of the Administrative Agent) without
the written consent of the Administrative Agent and Super Majority Lenders;
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(g) amend the definitions of Canadian Borrowing Base, Eligible
Account Advance Percentage, Eligible Account, Eligible Inventory, Canadian Fixed
Asset Component and the advance rates specified in the definition of Canadian
Borrowing Base (other than to the extent already permitted to be reduced at the
discretion of the Administrative Agent) without the written consent of all of
the Administrative Agent, the Canadian Administrative Agent and Super Majority
Lenders; or
(h) amend Section 2.24 without the consent of the US Swingline
Lender.
Any waiver and any amendment, supplement or modification
pursuant to this Section 10.2 shall apply to each of the Lenders and shall be
binding upon each Borrower, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Borrowers, the Lenders and
the Administrative Agent shall be restored to their former position and rights
hereunder and under the other Financing Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default, or impair any right consequent thereon.
Section 10.3 NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any Borrower, any Agent, any Issuing Bank or any Lender in
exercising any right or remedy under this Agreement or any other Financing
Document and no course of dealing between any Borrower and any Agent, any
Issuing Bank or any Lender shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy under this Agreement or any
other Financing Document preclude any other or further exercise thereof or the
exercise of any other right or remedy under this Agreement or any other
Financing Document. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which any Borrower, any
Agent, any Issuing Bank or any Lender would otherwise have. No notice to or
demand on any Borrower not required under this Agreement or any other Financing
Document in any case shall entitle any Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Agent, any Issuing Bank or the Lenders to any other or further action in
any circumstances without notice or demand.
Section 10.4 PAYMENT OF EXPENSES, INDEMNITIES, ETC. Subject to
Section 10.22 herein, each Borrower agrees to (and shall be jointly and
severally liable for):
(a) EXPENSES. Whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of each Agent, and each Issuing Bank in the administration (both before
and after the execution hereof and including advice of counsel for each Agent as
to the rights and duties of such Agent and the Lenders with respect thereto) of,
and in connection with the preparation, execution and delivery of, recording or
filing of, preservation of rights under, enforcement of, interpretation of, and,
after a Default, refinancing, renegotiation or restructuring of, this Agreement,
and the other Financing Documents and any amendment, waiver or consent relating
thereto (including, but not limited to, the reasonable fees and disbursements,
for such purposes, of counsel for each Agent and, after Default, for any of the
Lenders) and promptly reimburse such Agent for all amounts expended, advanced,
or incurred by such Agent or the Lenders to satisfy any obligation of any
Borrower under this Agreement or any other Financing Document;
(b) INDEMNIFICATION. INDEMNIFY EACH AGENT, EACH ISSUING BANK
AND EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS AGAINST,
AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, ANY AND ALL ACTIONS,
SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES),
CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE
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INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF
THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY
RELATED TO (1) ANY ACTUAL OR PROPOSED USE BY ANY BORROWER OF THE PROCEEDS OF ANY
OF THE LOANS; OR (2) ANY OTHER ASPECT OF THIS AGREEMENT AND THE FINANCING
DOCUMENTS, INCLUDING BUT NOT LIMITED TO THE REASONABLE FEES AND DISBURSEMENTS OF
COUNSEL (INCLUDING ALLOCATED COSTS OF INTERNAL COUNSEL) AND ALL OTHER EXPENSES
INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY
SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR
INQUIRIES) OR CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING
ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES,
LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY NEGLIGENCE OF
EACH AGENT, EACH ISSUING BANK AND EACH LENDER, EACH OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS AND AFFILIATES;
PROVIDED, HOWEVER, THE PROVISIONS OF THIS SECTION 10.4(b) SHALL NOT APPLY TO ANY
ACTION, SUITS, PROCEEDINGS, CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES, OR
EXPENSES TO THE EXTENT, BUT ONLY TO THE EXTENT, DETERMINED BY A FINAL
NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION TO HAVE BEEN CAUSED
BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SEEKING
INDEMNIFICATION;
(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS
FROM TIME TO TIME EACH AGENT, THE ISSUING BANKS AND THE LENDERS, EACH PERSON
CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING AND THE
RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES,
SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS,
DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE
LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) TO WHICH ANY SUCH PERSON MAY BECOME
SUBJECT AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO
OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING
DOCUMENT) ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF EACH AGENT, THE
ISSUING BANKS AND THE LENDERS, EACH PERSON CLAIMING BY, THROUGH, UNDER OR ON
ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL,
EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING
(1) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO ANY BORROWER OR ANY OF THEIR
RESPECTIVE PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL
OF HAZARDOUS SUBSTANCES ON ANY OF THEIR RESPECTIVE PROPERTIES, (2) AS A RESULT
OF THE BREACH OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO ANY CREDIT PARTY, (3) DUE TO PAST OWNERSHIP BY ANY CREDIT PARTY OF
ANY OF THEIR RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (4)
THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY,
OR (5) ANY
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OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER FINANCING DOCUMENT; PROVIDED, HOWEVER, NO INDEMNITY SHALL
BE AFFORDED UNDER THIS SECTION 10.4(C) IN RESPECT OF ANY PROPERTY FOR ANY
OCCURRENCE ARISING PRIMARILY FROM THE ACTS OR OMISSIONS OF AN AGENT OR ANY
LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS
SHALL HAVE OBTAINED ACTUAL PHYSICAL POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR
OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING
PROVISIONS, EACH BORROWER HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING
AGAINST ANY OF THE PERSONS INDEMNIFIED IN THIS SECTION 10.4 ANY DEMAND, CLAIM,
COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER HAVE OR ACCRUE (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY
FINANCING DOCUMENT) ARISING FROM (1) ANY ENVIRONMENTAL LAW NOW OR HEREAFTER
ENACTED (INCLUDING THOSE APPLICABLE TO ANY BORROWER UNLESS THE ACTS OR OMISSIONS
OF ANY SUCH PERSON OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE THE PRIMARY
CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, COST RECOVERY ACTION OR
LAWSUIT, (2) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY
CREDIT PARTY, OR (3) THE BREACH OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY
ENVIRONMENTAL LAW OR ENVIRONMENTAL COVENANT APPLICABLE TO ANY BORROWER, UNLESS
THE ACTS OR OMISSIONS OF SUCH PERSON, ITS SUCCESSORS AND ASSIGNS ARE THE PRIMARY
CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY
ACTION OR LAWSUIT.
If and to the extent that the obligations of the Borrowers under this Section
10.4 are unenforceable for any reason, each Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. Each Borrower's obligations under this
Section 10.4 shall survive any termination of this Agreement and the payment of
the Lender Indebtedness. Notwithstanding the foregoing, in no event shall any
Canadian Borrower be required to pay any costs and expenses or indemnify any
Person pursuant to this Section 10.4 other than the Canadian Administrative
Agent, any Issuing Bank with respect to Canadian Letters of Credit or the
Canadian Lenders each acting in its capacity as such (and the officers,
directors, employees, representatives, agents and affiliates of such Persons
acting in such capacities).
Section 10.5 RIGHT OF SETOFF. In addition to and not in limitation of
all rights of offset that any Lender or any Issuing Bank may have under
applicable law, each Lender, each Issuing Bank and each other holder of any
Lender Indebtedness shall, upon the occurrence of any Event of Default and at
any time during the continuance thereof and whether or not such Lender, such
Issuing Bank or such holder has made any demand or Borrower's obligations are
matured, have the right at any time and from time to time, without notice to any
Borrower (any such notice being expressly waived by each Borrower) to set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by any
Lender or any Issuing Bank to or for the credit or the account of the applicable
Borrower against any and all of the Lender Indebtedness owing to such Lender or
such Issuing Bank by such Borrower then outstanding, subject to the provisions
of Section 2.9(f), (g), (h) and (i); provided, that, no Lender shall exercise
any right of offset with respect to any deposit of any Canadian Borrower to
satisfy any Lender Indebtedness which is not Canadian Lender Indebtedness.
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Section 10.6 BENEFIT OF AGREEMENT. This Agreement and the other
Financing Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
provided that no Borrower may assign or transfer any of its interest hereunder
or thereunder without the prior written consent of each Lender.
Section 10.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that
issues any Letter of Credit), except that (i) no Borrower may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by any
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of Agent, each
Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the
Borrower shall be required for an assignment to a Lender, an Affiliate
of a Lender, an Approved Fund or, if an Event of Default has occurred
and is continuing, any other assignee;
(B) the Administrative Agent; and
(C) the Issuing Banks.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender
or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the
Revolving Commitment subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment
is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, provided that no such consent of the Borrower shall
be required if an Event of Default has occurred and is continuing;
(B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Agreement;
(C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500; and
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(D) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.
For the purposes of this Section 10.7, the term "Approved
Fund" has the following meaning:
"APPROVED FUND" means any Person (other than a natural person)
that is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 2.15, Section 2.17, Section 2.19 and Section 10.4). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 10.7 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and Reimbursement Obligations owing to, each Lender pursuant
to the terms hereof from time to time (the "REGISTER"). The entries in the
Register shall be conclusive, and the Borrowers, the Administrative Agent, the
Issuing Banks and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register; provided that if either the assigning Lender or the assignee shall
have failed to make any payment required to be made by it pursuant to Section
2.3(d)(4), Section 2.4, Section 2.18, Section 2.24 or this Section 10.7, the
Administrative Agent shall have no obligation to accept such Assignment and
Assumption and record the information therein in the Register unless and until
such payment shall have been made in full, together with all accrued interest
thereon. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(c) (1) Any Lender may, without the consent of any Borrower,
the Administrative Agent, any Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "PARTICIPANT") in all
or a portion of such Lender's rights and obligations under this Agreement
104
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Borrower, the
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(iv) any Canadian Lender that intends to sell a participation to a Person which
is not a resident of Canada for purposes of the Income Tax Act (Canada) shall
give prior written notice thereof to the Canadian Borrowers. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in Section 10.2(a), 10.2(b) or 10.2(c) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 2.15, Section 2.17 and Section 2.19 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.5 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18 as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.15, Section 2.17 or Section 2.19 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers' prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.19 unless the Borrowers are notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.19(f) as though it were a
Lender.
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
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.
Section 10.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC.
(a) GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
be governed by the laws of the State of New York and, to the extent controlling,
laws of the United States of America.
(b) SUBMISSION TO JURISDICTION. Any legal action or proceeding
with respect to this Agreement, or the other Financing Documents may be brought
in the courts of the State of New York or of the United States of America for
the Southern District of New York, and, by execution and delivery of this
Agreement, each Borrower hereby accepts for itself and in respect of its
Property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Borrower hereby irrevocably waives any objection, including, but
not limited to, any objection to the laying of venue or based on the grounds of
Forum Non Conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(c) WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY
APPLICABLE LAW, EACH OF THE BORROWERS, THE AGENTS, THE ISSUING BANKS
105
AND THE LENDERS (i) IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO ANY FINANCING DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (iv)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
FINANCING DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED
UPON, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS SECTION.
(d) WAIVER OF CONSEQUENTIAL DAMAGES. To the maximum extent
allowed by applicable law, each Borrower, each Agent, the Issuing Banks and the
Lenders (1) irrevocably waive any right each may have to claim or recover in any
such litigation any special, exemplary, punitive or consequential damages, or
damages other than, or in addition to, actual damages; (2) certifies that no
party hereto nor any representative or counsel for any party hereto has
represented, expressly or otherwise, or implied that such party would not, in
the event of litigation, seek to enforce the foregoing waiver; and (3)
acknowledges that it has been induced to enter into this Agreement, the other
Financing Documents and the transactions contemplated hereby and thereby based
upon, among other things, the mutual waivers and certifications contained in
this Section 10.8.
(e) DESIGNATION OF PROCESS AGENT. Each Borrower hereby
irrevocably designates CT Corporation System, with an office on the date hereof
at 000 Xxxxx Xx. Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, as the designee, appointee
and process agent of such Borrower to receive, for and on behalf of such
Borrower, service of process in such respective jurisdictions in any legal
action or proceeding with respect to this Agreement, or the other Financing
Documents. It is understood that a copy of such process served on such Agent
will be promptly forwarded by mail to such Borrower at its address set forth
opposite its signature below, but the failure of any Borrower to receive such
copy shall not affect in any way the service of such process. Each Borrower
further irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Company at its
said address, such service to become effective 30 days after such mailing.
(f) SERVICE OF PROCESS. Nothing herein shall affect the right
of Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any Borrower in any other jurisdiction.
(g) "JUDGMENT CURRENCY".
(i) If, for the purpose of obtaining or enforcing any
judgment against any Borrowers or any Credit Party in any court in any
jurisdiction, it becomes necessary to convert into any other currency
(such other currency being hereinafter in this Section 10.8(g) referred
to as the "JUDGMENT CURRENCY") an amount due under any Financing
Document in any currency (the "OBLIGATION CURRENCY") other than the
Judgment Currency, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding (i) the date of
actual payment of the amount due, in the case of any proceeding in the
courts of any jurisdiction that will give effect to such conversion
being made on such date, or (ii) the date on which the judgment is
given, in the case of any proceeding in the courts of any other
jurisdiction (the
106
applicable date as of which such conversion is made pursuant to this
Section 10.8(g) being hereinafter in this Section 10.8(g) referred to
as the "JUDGMENT CONVERSION DATE ").
(ii) If, in the case of any proceeding in the court
of any jurisdiction referred to in Section 10.8(g)(i), there is a
change in the rate of exchange prevailing between the Judgment
Conversion Date and the date of actual receipt for value of the amount
due, the applicable Borrower or Credit Party shall pay such additional
amount (if any, but in any event not lesser amount) as may be necessary
to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could
have been purchased with the amount of the Judgment Currency stipulated
in the judgment or judicial order at the rate of exchange prevailing on
the Judgment Conversion Date. Any amount due from a Borrower or Credit
Party under Section 10.8(g)(ii) shall be due as a separate debt and
shall not be affected by judgment being obtained for any other amounts
due under or in respect of any of the Loan Documents.
(iii) The term "RATE OF EXCHANGE" in this Section
10.8(g) means the rate of exchange at which the Administrative Agent
would, on the relevant date at or about 12:00 noon (New York time), be
prepared to sell the Obligation Currency against the Judgment Currency.
Section 10.9 INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
Section 10.10 INVALIDITY. In the event that any one or more of the
provisions contained in this Agreement or in any other Financing Document shall,
for any reason, be held invalid, illegal or unenforceable in any respect, (a)
each Borrower agrees that such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any other Financing Document
and (b) each Borrower and the Administrative Agent (acting on behalf and at the
direction of the Lenders) and the Canadian Administrative Agent (acting on
behalf and at the direction of the Canadian Lenders) will negotiate in good
faith to amend such provision so as to be legal, valid, and enforceable.
Section 10.11 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of
this Agreement and of any other Financing Documents relating to other Lender
Indebtedness shall apply with equal force and effect to each and all promissory
notes hereafter executed which in whole or in part represent a renewal,
extension for any period, increase or rearrangement of any part of the Lender
Indebtedness originally represented by or of any part of such other Lender
Indebtedness.
Section 10.12 CONFIDENTIALITY. The Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section 10.12, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrowers or (h) to the extent
such Information (1) becomes publicly available other than as a result of a
breach of this Section 10.12 or
107
(2) becomes available to the Administrative Agent, the Canadian Administrative
Agent, any Issuing Bank or any Lender on a non-confidential basis from a source
other than a Borrower. For the purposes of this Section 10.12, "INFORMATION"
means all information received from any Borrower relating to a Borrower or its
business, other than any such information that is available to the
Administrative Agent, the Canadian Administrative Agent, any Issuing Bank or any
Lender on a non-confidential basis prior to disclosure by a Borrower. Any Person
required to maintain the confidentiality of Information as provided in this
Section 10.12 shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Each Borrower acknowledges that the Administrative
Agent or the Canadian Administrative Agent may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which a Credit Party may have conflicting
interests regarding the transactions contemplated by this Agreement or the other
Financing Documents. The Administrative Agent and the Canadian Administrative
Agent will not use confidential information obtained from any Credit Party by
virtue of the transaction contemplated by this Agreement or the other Financing
Documents or their other relationships with the Borrower in connection with the
performance by the Administrative Agent and the Canadian Administrative Agent of
services for other companies, and the Administrative Agent and the Canadian
Administrative Agent will not furnish any such information to other companies.
Each Borrower also acknowledges that the Administrative Agent and the Canadian
Administrative Agent has no obligation to use in connection with the
transactions contemplated by this Agreement or the other Financing Documents, or
to furnish to any Credit Party, confidential information obtained from other
companies.
Section 10.13 INTEREST. It is the intention of the parties hereto to
conform strictly to usury laws applicable to each Agent, the Issuing Banks and
the Lenders (collectively, the "FINANCING PARTIES") and the Transactions.
Accordingly, if the Transactions would be usurious as to any Financing Party
under laws applicable to it, then, notwithstanding anything to the contrary in
this Agreement or in any other Financing Document or agreement entered into in
connection with the Transactions or as security for Lender Indebtedness, it is
agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to any Financing Party that is contracted for,
taken, reserved, charged or received by such Financing Party under this
Agreement or under any of such other Financing Documents or agreements or
otherwise in connection with the Transactions shall under no circumstances
exceed the maximum amount allowed by such applicable law, (b) in the event that
the maturity of Lender Indebtedness is accelerated for any reason, or in the
event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (c)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be canceled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of the Borrower's Indebtedness to such Financing
Party (or, to the extent that the principal amount of the Borrower's
Indebtedness to such Financing Party shall have been or would thereby be paid in
full, refunded by such Financing Party to the Borrowers). The right to
accelerate the maturity of Lender Indebtedness does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and the Financing Parties do not intend to collect any unearned
interest in the event of acceleration. All sums paid or agreed to be paid to the
Financing Parties for the use, forbearance or detention of sums included in the
Lender Indebtedness shall, to the extent permitted by law applicable to such
Financing Party, be amortized, prorated, allocated and spread throughout the
full term of this Agreement until payment in full so that the rate or amount of
interest on account of the Lender Indebtedness does not exceed the applicable
usury ceiling, if any. As used in this Section 10.13, the terms "APPLICABLE LAW"
or "LAWS APPLICABLE TO ANY FINANCING PARTY" shall mean the law of any
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Agreement, or law of the United States of America or Canada
applicable to any Financing Party and the Transactions which
108
would permit such Financing Party to contract for, charge, take, reserve or
receive a greater amount of interest than under such jurisdiction's law.
Section 10.14 ENTIRE AGREEMENT. This Agreement and the other Financing
Documents embody the entire agreement and understanding between the
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or
the Lenders and the other respective parties hereto and thereto and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof and may not be contradicted by evidence of
prior, contemporaneous agreements of the parties. There are no unwritten oral
agreements between the parties.
Section 10.15 ATTACHMENTS. The exhibits, schedules and annexes attached
to this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
Section 10.16 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
but all of which shall together constitute one and the same instrument.
Section 10.17 SURVIVAL OF INDEMNITIES. The Borrowers' obligations under
Section 2.15, Section 2.17, Section 2.19 and Section 10.4 shall survive the
payment in full of the Loans and the Letter of Credit Liabilities.
Section 10.18 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement, and the table of contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
Section 10.19 SATISFACTION REQUIREMENT. If any agreement, certificate,
instrument or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory to any party, the determination of
such satisfaction shall be made by such party in its sole and exclusive judgment
exercised reasonably and in good faith.
Section 10.20 EXCULPATION PROVISIONS. Each of the parties hereto
specifically agrees that it has a duty to read this Agreement and the other
Financing Documents and agrees that it is charged with notice and knowledge of
the terms of this Agreement and the other Financing Documents; that it has in
fact read this Agreement and is fully informed and has full notice and knowledge
of the terms, conditions and effects of this Agreement; that it has been
represented by legal counsel of its choice throughout the negotiations preceding
its execution of this Agreement and the other Financing Documents; and has
received the advice of its attorneys in entering into this Agreement and the
other Financing Documents; and that it recognizes that certain of the terms of
this Agreement and the other Financing Documents result in one party assuming
the liability inherent in some aspects of the transaction and relieving the
other party of its responsibility for such liability. Each party hereto agrees
and covenants that it will not contest the validity or enforceability of any
exculpatory provision of this Agreement and the other Financing Documents on the
basis that the party had no notice or knowledge of such provision or that the
provision is not "conspicuous."
Section 10.21 SECURED AFFILIATE; CASH MANAGEMENT AFFILIATE. For
purposes of this Agreement and all other Financing Documents (other than
applicable Swap Agreements and Cash Management Agreements), if a Secured
Affiliate or Cash Management Affiliate of a Lender has entered into one or more
Swap Agreements or Cash Management Agreements with any Credit Party, then to the
extent that such Secured Affiliate or Cash Management Affiliate has rights
against or is owed obligations
109
by (or if the affiliated Lender, rather than the Secured Affiliate or Cash
Management Affiliate, were the counter-party to the applicable Swap Agreement or
the other party to the applicable Cash Management Agreement, such rights or
obligations that such Lender has) the Borrowers hereunder or under any other
Financing Document (other than applicable Swap Agreements and Cash Management
Agreements), such affiliated Lender shall be the agent and attorney-in-fact for
such Secured Affiliate or Cash Management Affiliate with regard to any such
rights and obligations, or deemed rights and obligations, as if such Lender were
the counter-party to the applicable Swap Agreement or the other party to the
applicable Cash Management Agreement including, but not limited to, the
following: (a) all distributions or payments in respect of Collateral owing to
such Secured Affiliate or Cash Management Affiliate shall be distributed or paid
to such Lender, (b) all representations, statements or disclaimers made herein
or in any Financing Document by or to such Lender shall be deemed to have been
made by or to such Secured Affiliate or Cash Management Affiliate, (c) all
obligations incurred by such Lender that would have been incurred by the Secured
Affiliate or Cash Management Affiliate if it were a party hereto shall be the
obligations of such Lender, and such Lender, as the agent and attorney-in-fact
of its Secured Affiliate or Cash Management Affiliate, will make any and all
payments owing to the Administrative Agent or Canadian Administrative Agent with
respect to such obligations or deemed obligations of its Secured Affiliate or
Cash Management Affiliate. Each such Lender represents, warrants and covenants
to and with the Administrative Agent and the Canadian Administrative Agent that
such Lender has, or at all applicable times will have, full power and authority
to act as Agent and attorney-in-fact for its Secured Affiliates or Cash
Management Affiliates. Under no circumstance shall any Secured Affiliate or Cash
Management Affiliate have any voting rights hereunder and the voting rights of
any affiliated Lender shall not be increased by virtue of the obligations owing
to any such Secured Affiliate or Cash Management Affiliate.
Section 10.22 NO FINANCIAL ASSISTANCE BY CANADIAN CREDIT PARTIES.
Notwithstanding any provision of this Agreement or any of the other Financing
Documents to the contrary (including, without limitation, Section 10.4 and
Section 10.17 of this Agreement) no Canadian Credit Party will have any
liability hereunder or thereunder for, nor shall any of the assets of any such
Canadian Credit Party (including proceeds of any Collateral owned by any such
Canadian Credit Party) be applied against or issued to satisfy or offset, any
indebtedness, obligations or liabilities (actual or contingent) of any Person
which is not indebtedness, an obligation, or a liability of a Canadian Borrower;
provided, that, nothing contained herein shall limit or impair the rights of any
Agent, any Lender or any Secured Affiliate or the liability or obligation of any
Canadian Credit Party with respect to the Canadian Lender Indebtedness,
including, without limitation, any Swap Agreements or Cash Management Agreements
entered into with any Canadian Credit Party.
Section 10.23 MISSOURI LAW PROVISION. ORAL AGREEMENTS OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE REGARDLESS
OF THE LEGAL THEORY ON WHICH IT IS BASED, THAT IS, IN ANY WAY RELATED TO THIS
CREDIT AGREEMENT. TO PROTECT THE BORROWERS AND THE LENDERS FROM MISUNDERSTANDING
OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED
IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT
BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
110
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
US BORROWERS:
MAVERICK TUBE CORPORATION
By:
--------------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK TUBE, L.P.
By: Maverick GP, LLC, its general partner
By:
Maverick Tube Corporation,
its sole member
By:
-------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK GP, LLC
By:
Maverick Tube Corporation, its sole member
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
PRECISION TUBE HOLDING LLC
By: Maverick Tube Corporation, its sole member
By:
-------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
MAVERICK INVESTMENT LLC
By: Maverick Tube Corporation, its sole member
By:
------------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
PRECISION GP, LLC
By: Maverick Tube Corporation,
its sole member
By:
---------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
PRECISION TUBE TECHNOLOGY, L.P.
By: Precision GP, LLC, its general partner
By: Maverick Tube Corporation,
its sole member
By:
-----------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer
& Secretary
MAVERICK C&P, INC.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
SEAC ACQUISITION, LLC
By: Maverick Tube Corporation,
its sole member
By:
------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
XXXXXX, X.X.
By: Precision GP, LLC, its general partner
By: Maverick Tube Corporation,
its sole member
By:
--------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer &
Secretary
TUBULAR TRANSPORT SERVICES, INC.
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
CANADIAN BORROWERS: PRUDENTIAL STEEL LTD.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK TUBE INTERNATIONAL HOLDINGS, INC.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK TUBE CANADA ULC
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK TUBE CANADA GP, LTD.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
MAVERICK TUBE CANADA L.P.
By: Maverick Tube Canada GP, Ltd.,
its general partner
By:
------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK TUBE (CANADA) INC.
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
PRUDENTIAL STEEL HOLDINGS, ULC
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
MAVERICK EXCHANGECO (NOVA SCOTIA) ULC
By:
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Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
PRECISION TUBE CANADA LIMITED
By:
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Xxxxx X. Xxxxxxx
Senior Vice President-Finance,
Chief Financial Officer & Secretary
Address for notice for all Borrowers:
Maverick Tube Corporation
00000 Xxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn:
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Fax:
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Phone:
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SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MAY 27, 2005
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, N.A., AS THE ADMINISTRATIVE AGENT,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
AS THE CANADIAN ADMINISTRATIVE AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
LENDERS: JPMORGAN CHASE BANK, N.A., individually,
as an Issuing Bank, as the Administrative
Agent, as the US Swingline Lender and a
US Revolving Lender
By:
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Xxxxxxx X. Xxxx
Vice President
Address: 0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
JPMORGAN CHASE BANK, N.A.,, TORONTO BRANCH,
individually, as an Issuing Bank, as the
Canadian Administrative Agent, and as the
Canadian Revolving Lender
By:
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Xxxxxxxxx Xxxx
Vice President
Address: 000 Xxx Xxxxxx, Xxxxx Bank Plaza
South Tower, Suite 1800
Xxxxxxx, Xxxxxxx, X0X 0X0 Xxxxxx
Attention: Xxxxxxxxx Xxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
ANNEX I
US REVOLVING CANADIAN
CREDIT REVOLVING CREDIT US SWINGLINE LOAN
LENDER COMMITMENT COMMITMENT COMMITMENT
--------------------------- ------------ ---------------- -----------------
JPMorgan Chase Bank, N.A. $255,000,000 0 $35,000,000
JPMorgan Chase Bank, N.A., 0 $65,000,000 0
Toronto Branch
Annex I - Page 1
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION
Exhibit A - Page 1
EXHIBIT B-1
FORM OF US BORROWING BASE REPORT
Exhibit B-1 - Page 1
EXHIBIT B-2
FORM OF CANADIAN BORROWING BASE REPORT
Exhibit B-2 - Page 1
EXHIBIT C-1
FORM OF BORROWING REQUEST
(US REVOLVING CREDIT LOAN)
Exhibit C-1 - Page 1
EXHIBIT C-2
FORM OF BORROWING REQUEST
(CANADIAN REVOLVING CREDIT LOANS)
Exhibit C-2 - Page 1
EXHIBIT C-3
FORM OF REQUEST FOR US LETTERS OF CREDIT
Exhibit C-3 - Page 1
EXHIBIT C-4
FORM OF REQUEST FOR CANADIAN LETTERS OF CREDIT
Exhibit C-4 - Page 1
EXHIBIT C-5
FORM OF BORROWING REQUEST
(US SWINGLINE LOANS)
Exhibit C-5 - Page 1
EXHIBIT D-1
FORM OF CANADIAN REAL ESTATE MORTGAGE
Exhibit D-1 - Page 1
EXHIBIT D-2
FORM OF CANADIAN ASSIGNMENT OF LEASES AND RENTS
Exhibit D-2 - Page 0
XXXXXXX X
XXXX XX XXXXXXXX SECURITY AGREEMENT
Exhibit E - Page 1
EXHIBIT F
FORM OF COMMITMENT INCREASE AGREEMENT
Exhibit F - Page 1
EXHIBIT G
FORM OF GUARANTY AND SECURITY AGREEMENT
Exhibit G - Page 1
EXHIBIT H
FORM OF NEW LENDER AGREEMENT
Exhibit H - Page 1
EXHIBIT I
FORM OF PERFECTION CERTIFICATE UPDATE
Exhibit I - Page 1
EXHIBIT J
FORM OF US REAL ESTATE MORTGAGE
Exhibit J - Page 1
EXHIBIT K
FORM OF B/A EQUIVALENT NOTE
Exhibit K - Page 1
EXHIBIT L
FORM OF BORROWER JOINDER AGREEMENT
Exhibit L - Page 1
EXHIBIT M
FORM OF COMPLIANCE CERTIFICATE
Exhibit M - Page 1
EXHIBIT N-1
FORM OF INTERIM ACCOUNT REPORT
(US BORROWERS)
Exhibit N-1 - Page 1
EXHIBIT N-2
FORM OF INTERIM ACCOUNT REPORT
(CANADIAN BORROWERS)
Exhibit N-2 - Page 1
EXHIBIT O-1
FORM OF INVENTORY DESIGNATION REPORT
(US BORROWERS)
Exhibit O-1 - Page 1
EXHIBIT O-2
FORM OF INVENTORY DESIGNATION REPORT
(CANADIAN BORROWERS)
Exhibit O-2 - Page 1
