LOAN AGREEMENT
($20,000,000 U.S. REVOLVING LOAN FACILITY,
$5,000,000 CANADIAN REVOLVING LOAN FACILITY,
$10,000,000 U.K. REVOLVING LOAN FACILITY
AND
$45,000,000 TERM LOAN FACILITY)
DATED AS OF MARCH 15, 2004
AMONG
NATCO GROUP INC.,
AS U.S. BORROWER,
NATCO CANADA, LTD.,
AS CANADIAN BORROWER,
AXSIA GROUP LIMITED,
AS U.K. BORROWER,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS U.S. AGENT AND CO-LEAD ARRANGER,
HSBC BANK CANADA,
AS CANADIAN AGENT
HSBC BANK PLC,
AS U.K. AGENT,
COMERICA BANK,
AS SYNDICATIONS AGENT AND AS CO-LEAD ARRANGER
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
TABLE OF CONTENTS
Page
1. Definitions............................................................... 1
1.1 Certain Defined Terms................................................ 1
1.2 Miscellaneous........................................................ 32
2. Commitments; Loans; BA's and Letters of Credit............................ 32
2.1 Loans and BA's....................................................... 32
2.2 Letters of Credit.................................................... 34
2.3 Certain Provisions Relating to Bankers' Acceptances.................. 39
2.4 Terminations, Reductions or Reallocations of Commitments............. 43
2.5 Commitment Fees...................................................... 45
2.6 Several Obligations.................................................. 46
2.7 Notes................................................................ 46
2.8 Use of Proceeds...................................................... 47
2.9 Currency Fluctuations................................................ 47
3. Borrowings, Prepayments and Interest Options.............................. 48
3.1 Borrowings........................................................... 48
3.2 Prepayments.......................................................... 48
3.3 Interest Options..................................................... 52
4. Payments; Pro Rata Treatment; Computations, Etc........................... 57
4.1 Payments............................................................. 57
4.2 Pro Rata Treatment................................................... 58
4.3 Certain Actions, Notices, Etc........................................ 59
4.4 Non-Receipt of Funds by Any Agent.................................... 60
4.5 Sharing of Payments, Etc............................................. 61
5. Conditions Precedent...................................................... 61
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances............ 61
5.2 All Loans, Letters of Credit and Bankers' Acceptances................ 63
6. Representations and Warranties............................................ 64
6.1 Organization......................................................... 64
6.2 Financial Statements................................................. 64
6.3 Enforceable Obligations; Authorization............................... 65
6.4 Other Debt........................................................... 65
6.5 Litigation........................................................... 65
6.6 Title................................................................ 65
6.7 Taxes................................................................ 65
6.8 Regulations U and X.................................................. 65
6.9 Subsidiaries......................................................... 66
6.10 No Untrue or Misleading Statements................................... 66
6.11 ERISA................................................................ 66
6.12 Investment Company Act............................................... 66
6.13 Public Utility Holding Company Act................................... 66
6.14 Solvency............................................................. 66
6.15 Fiscal Year.......................................................... 66
6.16 Compliance........................................................... 66
i
6.17 Environmental Matters................................................ 67
6.18 Collateral Covered................................................... 67
6.19 Property of Excluded Subsidiaries and Certain Foreign Subsidiaries... 67
7. Affirmative Covenants..................................................... 67
7.1 Taxes, Existence, Regulations, Property, Etc......................... 68
7.2 Financial Statements and Information................................. 68
7.3 Financial Tests...................................................... 69
7.4 Inspection........................................................... 69
7.5 Further Assurances................................................... 70
7.6 Books and Records.................................................... 70
7.7 Insurance............................................................ 70
7.8 Notice of Certain Matters............................................ 70
7.9 Capital Adequacy..................................................... 71
7.10 ERISA Information and Compliance..................................... 71
7.11 Additional Security Documents........................................ 72
8. Negative Covenants........................................................ 72
8.1 Borrowed Money Indebtedness.......................................... 73
8.2 Liens................................................................ 73
8.3 Contingent Liabilities............................................... 73
8.4 Mergers, Consolidations and Dispositions of Assets................... 73
8.5 Redemption, Dividends and Distributions.............................. 74
8.6 Nature of Business................................................... 74
8.7 Transactions with Related Parties.................................... 75
8.8 Loans and Investments................................................ 75
8.9 Subsidiaries......................................................... 75
8.10 Export/Import Credit Facilities...................................... 76
8.11 Organizational Documents............................................. 76
8.12 Unfunded Liabilities................................................. 76
8.13 Sale/Leasebacks...................................................... 76
8.14 Acquisitions......................................................... 76
8.15 Negative Pledges..................................................... 76
8.16 Synthetic Repurchases of Equity or Debt.............................. 77
8.17 Property of Excluded Subsidiaries and Certain Foreign Subsidiaries... 77
8.18 Limitation on Capital Expenditures................................... 77
9. Defaults.................................................................. 77
9.1 Events of Default.................................................... 77
9.2 Right of Setoff...................................................... 80
9.3 Collateral Account................................................... 80
9.4 Preservation of Security for Letter of Credit Liabilities............ 80
9.5 Currency Conversion After Maturity................................... 81
9.6 Remedies Cumulative.................................................. 81
10. Agents.................................................................... 81
10.1 Appointment, Powers and Immunities................................... 81
10.2 Reliance............................................................. 83
10.3 Defaults............................................................. 83
10.4 Material Written Notices............................................. 84
10.5 Rights as a Lender................................................... 84
ii
10.6 Indemnification...................................................... 84
10.7 Non-Reliance on Agents and Other Lenders............................. 84
10.8 Failure to Act....................................................... 85
10.9 Resignation or Removal of Agent...................................... 85
10.10 No Partnership....................................................... 86
10.11 Authority of Agent................................................... 86
10.12 Syndications Agent................................................... 86
11. Miscellaneous............................................................. 87
11.1 Waiver............................................................... 87
11.2 Notices.............................................................. 87
11.3 Expenses, Etc........................................................ 87
11.4 Indemnification...................................................... 88
11.5 Amendments, Etc...................................................... 89
11.6 Successors and Assigns............................................... 90
11.7 Limitation of Interest............................................... 92
11.8 Survival............................................................. 93
11.9 Captions............................................................. 93
11.10 Counterparts......................................................... 93
11.11 Governing Law........................................................ 93
11.12 Severability......................................................... 94
11.13 Tax Forms; Net Payments.............................................. 94
11.14 Interest Act (Canada)................................................ 95
11.15 Judgment Currency.................................................... 95
11.16 Conflicts Between This Agreement and the Other Loan Documents........ 95
11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination........ 95
11.18 WAIVER OF JURY TRIAL................................................. 96
11.19 Confidentiality...................................................... 96
11.20 USA Patriot Act Notice............................................... 97
11.21 Amendment and Restatement............................................ 97
iii
EXHIBITS
A-1 -- Request for Extension of Credit (U.S. Borrower)
A-2 -- Request for Extension of Credit (Canadian Borrower)
A-3 -- Request for Extension of Credit (U.K. Borrower)
B -- Rate Designation Notice
C -- Canadian Revolving Note
D -- U.S. Revolving Note
E -- Assignment and Acceptance
F -- Compliance Certificate
G -- Bankers' Acceptance Notice
H -- Canadian Dollar Revolving Note
I -- Borrowing Base Certificate
J -- Term Note
K -- U.K. Revolving Note
SCHEDULES
1.1A - Existing Guaranties
1.1B - Excluded Real Property
6.5 - Litigation
6.9 - Subsidiaries
6.11 - Certain Unfunded Liabilities
8.5 - Preferred Stock, Warrants
iv
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of March 15, 2004 (the
"Effective Date"), by and among NATCO GROUP INC., a Delaware corporation (the
"U.S. Borrower"); NATCO CANADA, LTD., a corporation formed under the laws of the
Province of Ontario (the "Canadian Borrower"); AXSIA GROUP LIMITED, a company
incorporated in England and Wales under the Companies Act of the United Kingdom
(the "U.K. Borrower"); each of the lenders which is or may from time to time
become a party hereto (individually, a "Lender" and, collectively, the
"Lenders", which terms shall include U.S. Lenders, Canadian Lenders and U.K.
Lenders); XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Xxxxx Fargo"), as agent for
the U.S. Lenders (in such capacity, together with its successors in such
capacity, the "U.S. Agent") and as Co-Lead Arranger; HSBC BANK CANADA ("HSBC
Canada"), as agent for the Canadian Lenders (in such capacity, together with its
successors in such capacity, the "Canadian Agent"); HSBC BANK PLC ("HSBC U.K."),
as agent for the U.K. Lenders (in such capacity, together with its successors in
such capacity, the "U.K. Agent") and; COMERICA BANK, as Syndications Agent and
as Co-Lead Arranger.
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
In this Agreement, terms defined above shall have the meanings ascribed
to them above. Unless a particular term, word or phrase is otherwise defined or
the context otherwise requires, capitalized terms, words and phrases used herein
or in the Loan Documents (as hereinafter defined) have the following meanings
(all definitions that are defined in this Agreement or in the Loan Documents in
the singular have the same meanings when used in the plural and vice versa):
Acceptance Fee means the fee payable in Canadian Dollars to each
Canadian Lender in respect of the Bankers' Acceptances accepted by such Canadian
Lender computed in accordance with Section 2.3(c).
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in Section 9.102 of the Uniform Commercial
Code enacted in the State of Texas as Sections 1 through 11 of the Texas
Business and Commerce Code, in force on the Effective Date.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional Collateral Event shall have the meaning ascribed to such term
in Section 7.8 hereof.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest on
the Notes at the Stated Rate and any Acceptance Fee) which, under applicable
laws, are or may be deemed to constitute
interest on the indebtedness evidenced by the Notes or any other amounts owing
under any Loan Document.
Adjusted LIBOR means, with respect to each Interest Period applicable to
a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agents means U.S. Agent, Canadian Agent and U.K. Agent, collectively.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance
sheet as of the end of the fiscal year relating thereto and an income statement
and a statement of cash flows for such fiscal year, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP in all material respects, and accompanied by
the opinion of independent certified public accountants of recognized national
standing, which shall state that such financial statements present fairly in all
material respects the financial position of such Person and, if such Person has
any Subsidiaries, its consolidated Subsidiaries as of the date thereof and the
results of its operations for the period covered thereby in conformity with
GAAP. As to U.S. Borrower only, Annual Financial Statements shall also include
unaudited consolidating financial statements for U.S. Borrower and its
Subsidiaries, each in Proper Form, certified by the chief financial officer or
other authorized officer of U.S. Borrower as presenting fairly in all material
respects the consolidating financial position of U.S. Borrower and its
Subsidiaries.
Applicable BA Discount Rate means, as applicable to a Bankers'
Acceptance being purchased by any Canadian Lender on any day, the percentage
discount rate (expressed to two decimal places and rounded upward, if necessary,
to the nearest 1/100th of 1%) quoted by the Canadian Agent as that at which the
Canadian Agent would, in accordance with normal practice, at or about 12:00 noon
(Toronto, Ontario time), on such day, be prepared to purchase Bankers'
Acceptances in an amount and having a maturity date comparable to the amount and
maturity date of such Bankers' Acceptances.
Applicable Canadian Pension Legislation means, at any time, any federal
or provincial pension legislation then applicable to the Canadian Borrower,
including the Employment Pension Plans Act (Alberta), the Pension Benefits Act
(Ontario) and the Income Tax Act (Canada), including all regulations made
thereunder, and all rules, regulations, rulings and
interpretations made or issued by any Governmental Authority having or asserting
jurisdiction in respect thereof.
Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of any Person.
Assessment Rate means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the U.S. Agent to be representative of the cost of such
insurance to the applicable Lenders.
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6(b).
Availability Period means, for each Lender, the period from and
including the Effective Date to (but not including) the Termination Date.
BA Discount Proceeds means in respect of any Bankers' Acceptance being
purchased by a Canadian Lender on any day under Section 2.3, an amount (rounded
to the nearest whole Canadian cent, and with one-half of one Canadian cent being
rounded up) calculated on such day by multiplying:
(A) the face amount of such Bankers' Acceptance; by
(B) the quotient equal to one divided by the sum of one plus the
product of:
(i) the Applicable BA Discount Rate (expressed as a decimal)
applicable to such Bankers' Acceptance; and
(ii) a fraction, the numerator of which is the number of days
remaining in the term of such Bankers' Acceptance and the
denominator of which is 365;
with such quotient being rounded up or down to the nearest
fifth decimal place and .000005 being rounded up.
Bankers' Acceptance or BA means a non-interest bearing draft in Canadian
Dollars drawn by the Canadian Borrower on and accepted by a Canadian Lender and
issued for value pursuant to Section 2.3 hereof and includes a depository xxxx
under the DBNA and a xxxx of exchange under the Bills of Exchange Act (Canada).
Bankers' Acceptance Liabilities means, at any time and in respect of any
Bankers' Acceptance, the face amount thereof if still outstanding and unpaid or,
following maturity and payment thereof, the aggregate unpaid amount of all
Reimbursement Obligations at that time due and payable in respect of the payment
of such Bankers' Acceptance upon maturity.
Bankers' Acceptance Notice has the meaning specified in Section 2.3(a).
Bankruptcy Code means (i) the United States Bankruptcy Code, (ii) the
Bankruptcy and Insolvency Act (Canada) and (iii) the Companies' Creditors
Arrangement Act (Canada), as the same may be amended and together with any
successor statutes.
Base Rate means, for any day, a rate per annum equal to the lesser of
(a) the then applicable Margin Percentage from time to time in effect plus the
greatest of (1) the applicable Prime Rate for that day and (2) the Federal Funds
Rate for that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason any
applicable Agent shall have determined (which determination shall be conclusive
and binding, absent manifest error) that it is unable to ascertain the Federal
Funds Rate for any reason, including, without limitation, the inability or
failure of Agent to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall, until the circumstances giving rise to such
inability no longer exist, be calculated without regard to that particular
component.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments evidencing borrowed money, (iii) all obligations of such Person
under conditional sale or other title retention agreements relating to Property
purchased by such Person, (iv) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services (excluding obligations of
such Person to creditors for raw materials, inventory, services and supplies and
deferred payments for services to employees and former employees incurred in the
ordinary course of such Person's business), (v) all lease obligations of such
Person which have been capitalized on the balance sheet of such Person in
accordance with GAAP, (vi) all obligations of others secured by any Lien on
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, equal to the lesser of the amount of such
obligation or the fair market value of such Property, (vii) Interest Rate Risk
Indebtedness of such Person, (viii) all obligations of such Person in respect of
outstanding surety bonds or letters of credit issued for the account of such
Person (or for which such Person is primarily liable) or bankers' acceptances
drawn by such Person and (ix) all guarantees of such Person.
Borrowers means U.S. Borrower, Canadian Borrower and U.K. Borrower,
collectively.
Borrowing Base Certificate shall mean a certificate, duly executed by
the chief executive officer, chief financial officer, treasurer or controller of
Borrowers, appropriately completed and in substantially the form of Exhibit I
hereto. Each Borrowing Base Certificate shall be effective
only as accepted by U.S. Agent (and with such revisions, if any, as U.S. Agent
may reasonably require as a condition to such acceptance).
Business Day means any day other than a day on which commercial banks
are authorized or required to close in Houston, Texas, Toronto, Ontario or
London, England.
Calculation Date means the last Business Day of each month.
Canadian Borrowing Base means, as at any date, the amount of the
Canadian Borrowing Base shown on the Borrowing Base Certificate then most
recently delivered pursuant to Section 7.2(f) hereof, determined by calculating
the amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts of the
Canadian Borrower and its Subsidiaries (other than Excluded
Subsidiaries) at said date, plus
(ii) 80% of the aggregate amount of all Milestone Xxxxxxxx of the
Canadian Borrower and its Subsidiaries (other than Excluded
Subsidiaries) at said date; provided that the amount
calculated pursuant to this clause (ii) shall not exceed 15%
of the Canadian Borrowing Base, plus
(iii) 50% of the aggregate amount of all Eligible Inventory of
Canadian Borrower and its Subsidiaries (other than Excluded
Subsidiaries) at said date (determined at the lower of cost or
market on a consistent basis and in accordance with GAAP);
provided that the amount calculated pursuant to this clause
(iii) shall not exceed 40% of the Canadian Borrowing Base,
plus
(iv) 100% of the aggregate amount of cash (or cash equivalents
acceptable to the U.S. Agent) delivered to Canadian Agent and
specifically pledged as security for the Canadian Obligations
pursuant to documentation satisfactory to the U.S. Agent.
In the absence of a current Borrowing Base Certificate, U.S. Agent shall
determine the Canadian Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the Canadian Borrowing Base from time to time so determined shall be the
Canadian Borrowing Base for all purposes of this Agreement until a current
Borrowing Base Certificate, in Proper Form, is furnished to and accepted by U.S.
Agent. For purposes of calculating the Canadian Borrowing Base, all amounts or
values expressed in Canadian Dollars shall be converted into Dollars at the
Exchange Rate in effect as of the date of the applicable Borrowing Base
Certificate.
Canadian Commitment means, as to any Canadian Lender, the obligation, if
any, of such Canadian Lender to make Canadian Revolving Loans, incur or
participate in Letter of Credit Liabilities relating to Canadian Letters of
Credit and accept and purchase Bankers' Acceptances in an aggregate principal
amount at any one time outstanding up to (but not exceeding) the amount, if any,
set forth opposite such Canadian Lender's name on the signature pages hereof
under the caption "Canadian Commitment", or otherwise provided for in an
Assignment and Acceptance (as the same may be increased or reduced from time to
time pursuant to Section 2.4 hereof).
Canadian Dollars or C$ means lawful money of Canada.
Canadian Dollar Revolving Notes means the Notes of Canadian Borrower
evidencing the Canadian Revolving Loans denominated in Canadian Dollars, in the
form of Exhibit H hereto.
Canadian Lender means each lender party hereto with any Canadian
Commitment or any outstanding Canadian Obligations.
Canadian Letters of Credit has the meaning assigned to such term in
Section 2.2 hereof.
Canadian Obligations means, as at any date of determination thereof, the
sum of the following (determined without duplication): (i) the aggregate
principal amount of Canadian Revolving Loans outstanding hereunder on such date,
plus (ii) the aggregate amount of the Bankers' Acceptance Liabilities
outstanding on such date, plus (iii) the aggregate amount of Letter of Credit
Liabilities outstanding on such date relating to Canadian Letters of Credit. For
purposes of calculating the aggregate amount of Canadian Obligations, all
amounts or values expressed in Canadian Dollars shall be converted into Dollars
at the Exchange Rate in effect as of the date of determination.
Canadian Prime Loans means Canadian Revolving Loans made pursuant to
Section 2.1(b) hereof which are denominated in Canadian Dollars.
Canadian Prime Rate means, on any day, as to Canadian Prime Loans made
to Canadian Borrower, the greater of (a) the annual rate of interest announced
from time to time by HSBC Canada as its prime rate then in effect at its
Principal Office, being the reference rate used by HSBC Canada for determining
interest rates on commercial loans denominated in Canadian Dollars to borrowers
in Canada, and (b) an annual rate of interest equal to the sum of (i) the CDOR
Rate and (ii) 1.00% per annum. The Canadian Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate, and
HSBC Canada, each Agent and each Lender disclaims any statement, representation
or warranty to the contrary. HSBC Canada, any Agent or any Lender may make
commercial loans or other loans at rates of interest at, above or below the
Canadian Prime Rate.
Canadian Revolving Loan means any revolving credit loan made pursuant to
Section 2.1(b) hereof.
Canadian Revolving Notes means the Notes of Canadian Borrower evidencing
the Canadian Revolving Loans denominated in Dollars, in the form of Exhibit C
hereto.
Capital Expenditures means, with respect to any Person for any period,
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations incurred during such period (to the extent not already
included), which would be reflected as additions to Property, plant or equipment
on a balance sheet of such Person and its consolidated Subsidiaries,
if any, prepared in accordance with GAAP; but excluding expenditures during such
period for the repair or replacement of any fixed or capital asset which was
destroyed, damaged or taken, in whole or in part, to the extent financed by the
proceeds of an insurance policy maintained by such Person or the proceeds of a
condemnation award.
CDOR Rate means, on any day, an annual rate of interest equal to the
average 30 day rate applicable to Canadian bankers' acceptances appearing on the
"Reuters Screen CDOR Page" on such day, or if such day is not a Business Day,
then on the immediately preceding Business Day; provided, however, if such rate
does not appear on the Reuters Screen CDOR Page as contemplated, then the CDOR
Rate on any day shall be calculated as the arithmetic mean of the 30 day rates
applicable to Canadian bankers' acceptances quoted by the Canadian Lenders which
are listed in Schedule I to the Bank Act (Canada) as of 12:00 noon (Toronto,
Ontario time) on such day, or if such day is not a Business Day, then on the
immediately preceding Business Day.
Ceiling Rate means, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable United States federal or Texas
laws or, in the case of advances made in Canada by Canadian Lenders to Canadian
Borrower, whichever of applicable Canada federal or Ontario laws (or the laws of
any other jurisdiction whose usury laws are deemed to apply to the Notes or any
other Loan Documents despite the intention and desire of the express choice of
law provisions set forth herein) permits the higher interest rate, stated as a
rate per annum. On each day, if any, that the Texas Finance Code establishes the
Ceiling Rate, the Ceiling Rate shall be the "weekly ceiling" (as defined in
Section 303 of the Texas Finance Code) for that day. U.S. Agent may from time to
time, as to current and future balances, implement any other ceiling under the
Texas Finance Code by notice to Borrowers, if and to the extent permitted by the
Texas Finance Code. Without notice to Borrowers or any other Person, the Ceiling
Rate shall automatically fluctuate upward and downward as and in the amount by
which such maximum nonusurious rate of interest permitted by applicable law
fluctuates.
Change of Control means a change resulting when 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 (i) Beneficially Own more than 50%
of the aggregate voting power of all classes of Voting Stock of U.S. Borrower or
(ii) succeed in having sufficient of its or their nominees elected to the Board
of Directors of U.S. Borrower such that such nominees, when added to any
existing directors remaining on the Board of Directors of U.S. Borrower 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 U.S. Borrower. As used
herein (a) "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, 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;
(b) "Group" means a "group" for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended; (c) "Unrelated Person" means at any time any
Person other than U.S. Borrower or any Subsidiary of U.S. Borrower and other
than any trust for any employee benefit plan of U.S. Borrower or any Subsidiary
of U.S. Borrower; (d) "Related Person" of any Person shall mean any other Person
owning (1) 5% or more of the outstanding common stock of such Person or (2) 5%
or more of the Voting Stock of such Person;
and (e) "Voting Stock" of any Person shall mean capital stock of such
Personwhich 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.
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal or
mixed, now or hereafter subject to the Liens created pursuant to any of the
Security Documents.
"Collateral Agency Agreement" means that certain Collateral Agency
Agreement dated concurrently herewith executed by and among U.S. Agent, U.K.
Agent, Canadian Agent and Xxxxx Fargo Bank, National Association, as Collateral
Agent, as it may be amended, modified, restated, supplemented and in effect from
time to time.
Commitment Fee Percentage means (i) on any day prior to July 1, 2004,
0.50% per annum and (ii) on and after July 1, 2004, the applicable per annum
percentage set forth at the appropriate intersection in the table shown below,
based on the Funded Debt to EBITDA Ratio as of the last day of the most recently
ended fiscal quarter of U.S. Borrower calculated by U.S. Agent as soon as
practicable after receipt by U.S. Agent of all financial reports required under
this Agreement with respect to such fiscal quarter (including a Compliance
Certificate) (provided, however, that if the Commitment Fee Percentage is
increased as a result of the reported Funded Debt to EBITDA Ratio, such increase
shall be retroactive to the date that U.S. Borrower was obligated to deliver
such financial reports to U.S. Agent pursuant to the terms of this Agreement and
provided further, however, that if the Commitment Fee Percentage is decreased as
a result of the reported Funded Debt to EBITDA Ratio, and such financial reports
are delivered to U.S. Agent not more than ten (10) calendar days after the date
required to be delivered pursuant to the terms of this Agreement, such decrease
shall be retroactive to the date that U.S. Borrower was obligated to deliver
such financial reports to U.S. Agent pursuant to the terms of this Agreement):
Funded Debt to Commitment
EBITDA Ratio Fee Percentage
-------------- ---------------
Greater than or equal to
2.50 to 1.00 0.50
Less than 2.50 to 1.00 0.375
Commitment Percentage means, as to any Lender, the percentage equivalent
of a fraction the numerator of which is the amount of such Lender's U.S.
Commitment, Canadian Commitment or U.K. Commitment, as the case may be, and the
denominator of which is the aggregate amount of the U.S. Commitments, Canadian
Commitments or U.K. Commitments, as the case may be, of all Lenders.
Compliance Certificate shall have the meaning given to it in Section
7.2(c) hereof.
Contribution Agreements means those certain Contribution Agreements
dated concurrently herewith executed by and among, respectively, (i) U.S.
Borrower and the guarantors in respect of the U.S. Obligations, (ii) Canadian
Borrower and the guarantors in respect of the Canadian Obligations and (iii)
U.K. Borrower and the guarantors in respect of the U.K. Obligations, as they may
from time to time be amended, modified, restated or supplemented.
Controlled Group means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with any Borrower, are treated as a single employer under
Section 414 of the Code or under Applicable Canadian Pension Legislation.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities or any Bankers' Acceptance
Liabilities shall be effected by (i) delivering to U.S. Agent, Canadian Agent or
U.K. Agent, as the case may be, a letter of credit in form and substance, and
issued by a Person, acceptable to the applicable Agent in its sole discretion or
(ii) paying to U.S. Agent, Canadian Agent or U.K. Agent, as the case may be,
immediately available funds, to be held by U.S. Agent, Canadian Agent or U.K.
Agent, as the case may be, in a collateral account maintained by U.S. Agent,
Canadian Agent or U.K. Agent, as the case may be, at its Principal Office and
collaterally assigned to U.S. Agent, Canadian Agent or U.K. Agent, as the case
may be, as security for the applicable Obligations using documentation
reasonably satisfactory to U.S. Agent, Canadian Agent or U.K. Agent, as the case
may be, in the amount required by any applicable provision hereof. Such letters
of credit and amounts in such collateral account shall be retained by U.S.
Agent, Canadian Agent or U.K. Agent, as the case may be, 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 or the
applicable Bankers' Acceptance shall have matured and the related Bankers'
Acceptance Liabilities shall have been fully satisfied; provided, however, that
at such time if a Default or Event of Default has occurred and is continuing,
U.S. Agent, Canadian Agent or U.K. Agent, as the case may be, shall not be
required to release such letters of credit or amounts in such collateral account
from the time of such collateral assignment until such Default or Event of
Default shall have been cured or waived.
Currency Exchange Risk Indebtedness means all obligations and
indebtedness of any Obligor with respect to the program for the hedging of
currency exchange risk provided for in any program entered into by such Obligor
for the purpose of reducing such Obligor's exposure to currency exchange
fluctuations and not for speculative purposes, approved in writing by U.S. Agent
(such approval not to be unreasonably withheld), as it may from time to time be
amended, modified, restated or supplemented.
DBNA means the Depository Bills and Notes Act (Canada).
Debt Service means, with respect to any Person for any period, the sum
of (i) Interest Expense for such period and (ii) scheduled principal payments on
obligations included within Borrowed Money Indebtedness for such period.
Default means an Event of Default or an event, act or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
Dollars, US$ and $ means lawful money of the United States of America.
Dual Lender means any Lender which has (either directly or through an
Affiliate) both a U.S. Commitment and either a Canadian Commitment or a U.K.
Commitment.
EBITDA means, without duplication, for any period the consolidated net
income (excluding any extraordinary gains or losses) of U.S. Borrower and its
Subsidiaries, on a consolidated basis, plus, to the extent deducted in
calculating consolidated net income, depreciation, amortization, Non-Cash Items,
net interest expense (in accordance with GAAP) and federal, state, provincial
and foreign income tax expense plus severance, relocation and other costs
associated with the restructuring of U.S. Borrower in the fiscal year 2003 in an
aggregate amount not to exceed $1,800,000 and minus, to the extent added in
calculating consolidated net income, any Non-Cash Items. Prior to January 1,
2005, EBITDA attributable to the SACROC Facility Expansion shall be annualized.
Eligible Accounts shall mean, as at any date of determination thereof,
each Account of a Person which is subject to a Lien created by any Security
Document and on which U.S. Agent (as to U.S. Borrower or any of its Subsidiaries
(other than Foreign Subsidiaries)) or Canadian Agent (as to any Subsidiary of
Canadian Borrower) or U.K. Agent (as to any Subsidiary of U.K. Borrower) shall
have a first-priority perfected Lien (subject only to Permitted Liens) which is
at said date payable to such Person and which complies with the following
requirements: (a) (i) the subject goods have been sold (and shipped, unless the
applicable account debtor shall have executed and delivered to the applicable
Borrower a written acceptance of the goods with a request that Borrower delay
shipping of such goods) to an account debtor on an absolute sale basis on open
account and not on consignment, on approval or on a "sale or return" basis or
subject to any other repurchase or return agreement and no material part of the
subject goods has been returned, rejected, lost or damaged (provided that the
foregoing shall not disqualify accounts arising from goods sold with usual and
customary sales warranties or having warranty claims which are not material),
(ii) the Account is stated to be payable in, or pegged to, Dollars (as to any
Eligible Accounts owned by U.S. Borrower or any of its Subsidiaries) or Canadian
Dollars (as to Canadian Borrower or any Subsidiary of Canadian Borrower) or
Euros or Pounds or other currencies approved (such approval not to be
unreasonably withheld) by U.K. Agent (as to U.K. Borrower or any Subsidiary of
U.K. Borrower) and is not evidenced by chattel paper or an instrument of any
kind (unless the applicable Agent has a perfected first priority Lien (subject
only to Permitted Liens) on such chattel paper or instrument) and said account
debtor is not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind unless the applicable Person has received a letter of
credit, bond or other financial guarantee in an amount equal to or greater than
such Account issued by a Qualified Institution and otherwise in form and
substance satisfactory to U.S. Agent; (b) the account debtor must be located in
the United States (as to any Eligible Accounts owned by U.S. Borrower or any of
its Subsidiaries (other than
Foreign Subsidiaries)) or in the United States or Canada (as to Canadian
Borrower or any Subsidiary of Canadian Borrower) or in the United States or the
United Kingdom or any other jurisdiction approved in writing by U.S. Agent (such
approval not to be unreasonably withheld) (as to U.K. Borrower or any Subsidiary
of U.K. Borrower), except for (x) Accounts as to which the applicable Person has
received a letter of credit, bond or other financial guarantee in an amount
equal to or greater than such Account issued by a Qualified Institution and
otherwise in form and substance satisfactory to U.S. Agent and (y) other
Accounts approved in writing by U.S. Agent; (c) it is a valid obligation of the
account debtor thereunder and is not subject to any offset or other defense on
the part of such account debtor or to any claim on the part of such account
debtor denying liability thereunder (provided that the foregoing shall not
disqualify accounts arising from goods sold with usual and customary sales
warranties or having warranty claims which are not material); (d) it is subject
to no Lien whatsoever, except for the Liens created or permitted pursuant to the
Loan Documents; (e) it is evidenced by an invoice and shipping receipts
submitted to the account debtor in timely fashion and in the normal course of
business; (f) it has not remained unpaid beyond 90 days after the date of the
invoice; (g) it does not arise out of transactions with an employee, officer or
director of the applicable Person or any Affiliate of such Person or with an
agent of the applicable Person (unless the transaction with such Person is
conducted on an arms-length basis); (h) not more than 20% (or such higher
percentage as U.S. Agent may approve in writing for any particular account
debtor) of the other Accounts of the applicable account debtor or any of its
Affiliates fail to satisfy all of the requirements of an "Eligible Account"
(provided that, with respect to Accounts owing by Investment Grade Account
Debtors under any single project with then current Accounts in excess of
$1,000,000 which fail to satisfy all of the requirements of an "Eligible
Account", this clause shall only operate to exclude other Accounts attributable
to such project and shall not operate to exclude other Accounts of such
Investment Grade Account Debtor which are attributable to other projects); (i)
as to any Eligible Accounts owned by U.S. Borrower or any of its Subsidiaries
(other than U.K. Borrower or any of its Subsidiaries), inclusion of the
applicable Account does not cause the total Eligible Accounts with respect to
the applicable account debtor and its Affiliates, in the aggregate, to exceed
10% of the total Eligible Accounts of the applicable Borrower (or such higher
percentage as U.S. Agent may approve in writing for any particular account
debtor), (j) each of the representations and warranties set forth in the
Security Documents executed by the applicable Person with respect thereto is
true and correct in all material respects on such date and (k) acting reasonably
and in good faith and after consultation with the applicable Borrower, U.S.
Agent has not deemed such Account ineligible because of uncertainty about the
creditworthiness of the account debtor or because U.S. Agent otherwise
reasonably considers the collateral value thereof to be impaired or its ability
to realize such value to be insecure. Amounts payable to any account debtor
shall be netted out of Eligible Accounts owing by such account debtor. In the
event of any dispute under the foregoing criteria, about whether an Account is
or has ceased to be an Eligible Account, the reasonable decision of U.S. Agent,
made in good faith, shall be conclusive and binding, absent manifest error.
Eligible Inventory shall mean, as at any date of determination thereof,
Inventory of a Person which is subject to a Lien created by any Security
Documents and on which U.S. Agent (as to U.S. Borrower or any of its
Subsidiaries (other than Foreign Subsidiaries)) or Canadian Agent (as to
Canadian Borrower or any Subsidiary of Canadian Borrower) or U.K. Agent (as to
U.K. Borrower or any Subsidiary of U.K. Borrower) shall have a first-priority
perfected Lien (subject only to Permitted Liens) and which complies with the
following requirements: (a) such
Inventory shall be valued in accordance with GAAP and consist of (i) eligible
raw materials, (ii) finished goods and (iii) parts and components, provided that
all such Inventory shall be within the United States of America (as to U.S.
Borrower or any of its Subsidiaries (other than Foreign Subsidiaries)) or in the
United States of America or Canada (as to Canadian Borrower or any Subsidiary of
Canadian Borrower) or in the United States of America or the United Kingdom or
such other jurisdictions as U.K. Agent may from time to time approve (as to U.K.
Borrower or any Subsidiary of U.K. Borrower); (b) it is in good condition, meets
all standards imposed by any Governmental Authority having regulatory authority
over it, its use and/or sale and is either currently usable or currently salable
in the normal course of business of the applicable Person; (c) it is not in the
possession or control of any warehouseman, bailee, or any agent or processor for
or customer of the applicable Person or, if it is, (i) the applicable Person
shall have notified, in a manner that effectively under applicable law creates
a valid and first priority Lien in favor of the applicable Agent in such
Inventory, such warehouseman, bailee, agent, processor or customer of the
applicable Agent's Lien and (ii) such warehouseman, bailee, agent, processor or
customer has subordinated any Lien it may claim therein and agreed to hold all
such Inventory during the continuance of an Event of Default for the applicable
Agent's account subject to the applicable Agent's instructions, (d) any such
category of Inventory consisting of finished goods shall not have remained
unsold for more than one (1) year (or such longer period as U.S. Agent may
approve in writing for any particular goods), (e) each of the representations
and warranties set forth in the Security Documents executed by the applicable
Person with respect thereto is true and correct in all material respects on such
date and (f) acting reasonably and in good faith and after consultation with the
applicable Borrower, U.S. Agent has not deemed such Inventory ineligible because
U.S. Agent reasonably considers the collateral value thereof to be impaired or
its ability to realize such value to be insecure. In the event of any dispute
under the foregoing criteria, about whether a portion of Inventory is or has
ceased to be Eligible Inventory, the reasonable decision of U.S. Agent, made in
good faith, shall be conclusive and binding, absent manifest error.
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution, contamination, protection or clean-up
of the air, surface water, ground water or land; (iii) solid, gaseous or liquid
waste generation, handling, treatment, storage, disposal or transportation; (iv)
exposure to Hazardous Substances; (v) the safety or health of employees or (vi)
the manufacture, processing, distribution in commerce, use, discharge or storage
of Hazardous Substances. An "Environmental Claim" includes, but is not limited
to, a common law action, as well as a proceeding to issue, modify or terminate
an Environmental Permit to the extent that such a proceeding attempts to redress
violations of an applicable permit, license, or regulation as alleged by any
Governmental Authority.
Environmental Liabilities means all liabilities arising from any
Environmental Claim, Environmental Permit or Requirements of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to Property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the
issuance, reissuance or renewal of any Environmental Permit including reasonable
attorneys' fees and court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or wastes
into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous Substances.
Equity Interests means shares of the capital stock, partnership
interests, membership interest in a limited liability company, beneficial
interests in a trust or other equity interests in any Borrower or any of their
Subsidiaries or other applicable Person or any warrants, options or other rights
to acquire such interests.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder and, as the context may require, Applicable Canadian Pension
Legislation.
Eurodollar Rate means for any day during an Interest Period for a LIBOR
Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage from time to time in effect and (b) the Ceiling
Rate. Each Eurodollar Rate is subject to adjustments for reserves, insurance
assessments and other matters as provided for in Sections 3.3 and 11.17 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar Reserve
Requirement by U.S. Agent shall be conclusive and binding, absent manifest
error, and may be computed using any commercially reasonable averaging and
attribution method.
Euros means the lawful currency for the time being of the European
Community.
Event of Default shall have the meaning assigned to it in Section 9.1
hereof.
Excess Cash Flow means, for any period, (i) net cash flow from
operations (other than working capital adjustments) for such period, determined
in accordance with GAAP less (ii) Capital Expenditures of U.S. Borrower and its
Subsidiaries for such period and mandatory prepayments of the Term Loans
calculated on the basis of Excess Cash Flow for such period.
Exchange Rate means, on any day, with respect to any foreign currency in
relation to Dollars or Dollars in relation to any foreign currency, the noon
buying rate in New York City for cable transfers payable in the applicable
foreign currencies as certified to the Federal Reserve
Board by the Federal Reserve Bank of New York for customs purposes on such day,
as published on such day pursuant to Federal Reserve Board Statistical Release
H.10; provided, however, that in the event that any applicable exchange rate
cannot be determined on any day by the foregoing procedure, then such exchange
rate shall be determined for such day in accordance with such commercially
reasonable procedures as the applicable Agent may elect.
Excluded Real Property means the real Property described on Schedule
1.1B hereto.
Excluded Subsidiaries means (i) NATCO (UK) Limited, a company
incorporated in England and Wales under the Companies Act of the United Kingdom,
(ii) NATCO Oilfield Construction, Inc., a California corporation, (iii) Oilfield
Construction Company, Inc., a California corporation, (iv) Dormant Axsia
Limited, a company incorporated in England and Wales under the Companies Act of
the United Kingdom, (v) Xxxxx Xxxxx Limited, a company incorporated in England
and Wales under the Companies Act of the United Kingdom, (vi) Howmar Limited, a
company incorporated in England and Wales under the Companies Act of the United
Kingdom, (vii) TEST, Inc., a Louisiana corporation, (viii) TEST Automation &
Controls, Inc., a Louisiana corporation, (ix) NATCO Acquisition Company, a
Delaware corporation, (x) The Cynara Company, a Delaware corporation, (xii)
NATCO London, Inc., a Delaware corporation and (xii) each Subsidiary of U.K.
Borrower which is not organized under the laws of the United Kingdom or any
political subdivision thereof.
Export/Import Credit Facilities means (i) that certain International
Revolving Loan Agreement dated June 30, 1997 executed by and between National
Tank Company and JPMorgan Chase Bank and the other security documents
contemplated thereby (as the foregoing may be amended, refinanced or replaced
from time to time), and (ii) any similar credit facilities that may be entered
into by the U.S. Borrower or any of its Subsidiaries supported by the
Export-Import Bank of the United States or the Export Development Canada.
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any such day which is a
Business Day, the average of the quotations for such day on such transactions
received by U.S. Agent from three Federal funds brokers of recognized standing
selected by U.S. Agent in its sole and absolute discretion.
Financing Statements means all such Uniform Commercial Code or Canadian
provincial personal Property security financing statements or, in the case of a
Lien created in England and Wales, completed forms 395 in accordance with
Section 395 of the Companies Xxx 0000, as U.S. Agent shall reasonably require,
in Proper Form, duly executed by the applicable Borrower (or any other
applicable Obligor) to give notice of and to perfect or continue perfection of
the applicable Agent's Liens in any applicable Collateral, as any of the
foregoing may from time to time be amended, modified, supplemented or restated.
Fixed Charge Coverage Ratio means, as of any day, the ratio of (a)
EBITDA for the 12 months ending on such day less the current portion of federal,
state and provincial cash income
tax expense recognized during such 12-month period to (b) the sum of (1) the
principal component of Debt Service for such 12-month period plus (2) cash
Interest Expense for such 12-month period paid by U.S. Borrower and its
Subsidiaries for such 12-month period plus (3) Permitted Dividends by U.S.
Borrower or by any Subsidiary of U.S. Borrower to any Person other than U.S.
Borrower (or a wholly-owned Subsidiary of U.S. Borrower) for such 12-month
period plus (4) actual Maintenance Capital Expenditures paid by U.S. Borrower
and its Subsidiaries for such 12-month period.
Foreign Subsidiaries means Subsidiaries which are organized under the
laws of a jurisdiction other than the United States of America, any State of the
United States or any political subdivision thereof.
Funded Debt means, with respect to any Person, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments evidencing
borrowed money, (iii) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of Property or services (excluding obligations of such Person to creditors
for raw materials, inventory, services and supplies and deferred payments for
services to employees and former employees incurred in the ordinary course of
such Person's business), (v) all lease obligations of such Person which have
been capitalized on the balance sheet of such Person in accordance with GAAP,
(vi) all obligations of others secured by any Lien on Property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, equal to the lesser of the amount of such obligation or the fair market
value of such Property, (vii) all obligations of such Person in respect of
outstanding letters of credit issued for the account of such Person (or for
which such Person is primarily liable) which support Borrowed Money Indebtedness
or in respect of outstanding bankers' acceptances drawn by such Person and
(viii) all guarantees of such Person in respect of Borrowed Money Indebtedness.
Funded Debt to EBITDA Ratio means, as of any day, the ratio of (a)
Funded Debt of U.S. Borrower and its Subsidiaries, on a consolidated basis, as
of such day to (b) EBITDA for the 4 quarter period ending on the last day of the
most recent fiscal quarter for which financial statements are available.
Funding Loss means, with respect to (a) any Borrower's payment of
principal of a LIBOR Borrowing on a day other than the last day of the
applicable Interest Period; (b) any Borrower's failure to borrow a LIBOR
Borrowing or to borrow funds by way of Bankers' Acceptances on the date
specified by such Borrower; (c) any Borrower's failure to make any prepayment of
the Loans (other than Base Rate Borrowings and Canadian Prime Loans) on the date
specified by such Borrower, or (d) any cessation of a Eurodollar Rate to apply
to the Loans or any part thereof pursuant to Section 3.3, in each case whether
voluntary or involuntary, any loss, expense, penalty, premium or liability
actually incurred by any Lender (including but not limited to any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such United States accounting
practice as, in the opinion of independent certified public accountants of
recognized national standing regularly
retained by such Person, conforms at the time to generally accepted accounting
principles, consistently applied for all periods after the Effective Date so as
to present fairly the financial condition, and results of operations and cash
flows, of such Person. If any change in any accounting principle or practice is
required by the Financial Accounting Standards Board, all reports and financial
statements required hereunder may be prepared in accordance with such change so
long as the applicable Person provides to U.S. Agent such disclosures of the
impact of such change as U.S. Agent may reasonably require. No such change in
any accounting principle or practice shall, in itself, cause a Default or Event
of Default hereunder (but Borrowers, U.S. Agent and Lenders shall negotiate in
good faith to replace any financial covenants hereunder to the extent such
financial covenants are affected by such change in accounting principle or
practice).
Governmental Authority means any governmental authority of the United
States of America, Canada, the United Kingdom, any State of the United States,
any Province of Canada, or of any other foreign jurisdiction and any political
subdivision of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having or asserting
jurisdiction over any Agent, any Lender, any Obligor or their respective
Property.
Guaranties means, collectively, (i) the Guaranties described on Schedule
1.1A hereto and (ii) any and all other guaranties hereafter executed in favor of
any Agent, for the benefit of U.S. Lenders, Canadian Lenders or U.K. Lenders,
relating to the Obligations, as any of them may from time to time be amended,
modified, restated or supplemented.
Hazardous Substance means petroleum products, and any hazardous or toxic
waste or substance defined or regulated as such from time to time by any law,
rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Home Jurisdiction Withholding Taxes means withholding taxes imposed by
the United Kingdom.
Interest Expense means, for any period, total interest expense accruing
on Borrowed Money Indebtedness of U.S. Borrower and its Subsidiaries during such
period (including interest expense attributable to capitalized leases and net
costs under interest rate swap, collar, cap or similar agreements providing
interest rate protection), determined in accordance with GAAP.
Interest Options means the Base Rate, each Eurodollar Rate and, as to
the Canadian Dollar Revolving Notes only, the Canadian Prime Rate, and "Interest
Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings and for
Canadian Prime Loans, March 31, 2004 and the last day of each March, June,
September and December thereafter prior to the Revolving Loan Maturity Date or
the Term Loan Maturity Date, as the case may be, and the Revolving Loan Maturity
Date or the Term Loan Maturity Date, as the case may be; and (b) for LIBOR
Borrowings, the end of the applicable Interest Period (and if such Interest
Period exceeds three months' duration, quarterly, commencing on the first
quarterly anniversary of the first day of such Interest Period) and the
Revolving Loan Maturity Date or the Term Loan Maturity Date, as the case may be.
Interest Period means, for each LIBOR Borrowing, a period commencing on
the date such LIBOR Borrowing began and ending on the numerically corresponding
day which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2,
3 or 6 months thereafter, as any Borrower shall elect in accordance herewith;
provided, (1) unless U.S. Agent shall otherwise consent, no Interest Period with
respect to a LIBOR Borrowing shall commence on a date earlier than three (3)
Business Days after this Agreement shall have been fully executed; (2) any
Interest Period with respect to a LIBOR Borrowing which would otherwise end on a
day which is not a Business Day shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day; (3) any
Interest Period with respect to a LIBOR Borrowing which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the appropriate calendar month; (4) no
Interest Period for a Revolving Loan shall ever extend beyond the Revolving Loan
Maturity Date and no Interest Period for a Term Loan shall ever extend beyond
the Term Loan Maturity Date, and (5) Interest Periods shall be selected by each
Borrower in such a manner that the Interest Period with respect to any portion
of the Loans which shall become due shall not extend beyond such due date.
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by U.S. Borrower for the purpose of reducing U.S.
Borrower's and its Subsidiaries' exposure to interest rate fluctuations and not
for speculative purposes, as it may from time to time be amended, modified,
restated or supplemented. To the extent Interest Rate Risk Agreements cover
Borrowed Money Indebtedness exceeding $5,000,000, in the aggregate, the prior
written approval of U.S. Agent shall be required (such approval not to be
unreasonably withheld).
Interest Rate Risk Indebtedness means all obligations and indebtedness
of any Obligor with respect to the program for the hedging of interest rate risk
provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities or
indebtedness of, or the making of any loan, advance, transfer of Property (other
than transfers in the ordinary course of business) or capital contribution to,
or the incurring of any liability (other than trade accounts payable arising in
the ordinary course of business), contingently or otherwise, in respect of the
indebtedness of, any Person.
Investment Grade Account Debtors means account debtors which are rated
A- or better by Standard & Poor's Ratings Services and A-3 or better by Xxxxx'x
Investors Service, Inc.
Issuer means the issuer (or, where applicable, each issuer) of a Letter
of Credit under this Agreement.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Lender Affiliate means, (a) with respect to any Lender, (i) an Affiliate
of such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in a
currency other than Dollars or Canadian Dollars, such amount shall be converted
by Agent to Dollars by any reasonable method, and such converted amount shall be
conclusive and binding, absent manifest error. For purposes of calculating the
aggregate amount of Letter of Credit Liabilities, all amounts or values
expressed in Canadian Dollars shall be converted into Dollars at the Exchange
Rate in effect as of the date of calculation.
Letters of Credit means the U.S. Letters of Credit, the Canadian Letters
of Credit and the U.K. Letters of Credit.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate
per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to
the average of the offered quotations appearing on Telerate Page 3750 (or if
such Telerate Page shall not be available, any successor or similar service as
may be selected by U.S. Agent and Borrowers) as of 11:00 a.m., Houston, Texas
time (in respect of a LIBOR Borrowing relating to the U.S. Loans) or 12:00 noon,
Toronto, Ontario time (in respect of a LIBOR Borrowing relating to the Canadian
Revolving Loans) or 12:00 noon, London, United Kingdom time (in respect of a
LIBOR Borrowing relating to the U.K. Revolving Loans) (or, in any case, as soon
thereafter as practicable) on the day two Business Days prior to the first day
of such Interest Period for deposits in Dollars having a term comparable to such
Interest Period and in an amount comparable to the principal amount of the LIBOR
Borrowing to which such Interest Period relates. If none of such Telerate Page
3750 nor any successor or similar service is available, then "LIBOR" shall mean,
with respect to any Interest Period for any applicable LIBOR Borrowing, the rate
of interest per annum, rounded upwards, if necessary, to the nearest 1/16th of
1%, quoted by U.S. Agent at or before 11:00 a.m., Houston, Texas time (in
respect of a LIBOR Borrowing relating to the U.S. Loans) or by Canadian Agent at
or before 12:00 noon, Toronto, Ontario time (in respect of a LIBOR Borrowing
relating to the Canadian Revolving Loans) or by U.K. Agent at or before 12:00
noon, London, United Kingdom time (in respect of a LIBOR Borrowing relating to
the U.K. Revolving Loans) (or, in any case, as soon thereafter as practicable),
on the date two Business Days before the first day of such Interest Period, to
be the arithmetic average of the prevailing rates per annum at the time of
determination and in accordance with the then existing practice in the
applicable market, for the offering to U.S. Agent, Canadian Agent or U.K. Agent,
as the case may be, by one or more prime banks selected by such Agent in its
sole
discretion, in the London interbank market, of deposits in Dollars for
delivery on the first day of such Interest Period and having a maturity equal
(or as nearly equal as may be) to the length of such Interest Period and in an
amount equal (or as nearly equal as may be) to the LIBOR Borrowing to which such
Interest Period relates. Each determination by U.S. Agent of LIBOR shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the Loans
at any time bearing interest at a Eurodollar Rate.
Lien means any mortgage, pledge, charge, encumbrance, security interest,
collateral assignment or other lien (statutory or otherwise) or restriction of
any kind, whether based on common law, constitutional provision, statute or
contract, and shall include reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions and other title exceptions.
Loan Documents means, collectively, this Agreement, the Notes, the
Bankers' Acceptances, the Bankers' Acceptance Notices, the Collateral Agency
Agreement, Guaranties, the Contribution Agreements, all Applications, the
Security Documents, the Notice of Entire Agreement, all instruments,
certificates and agreements now or hereafter executed or delivered by any
Obligor to any Agent or any Lender pursuant to any of the foregoing or in
connection with the Obligations or any commitment regarding the Obligations, and
all amendments, modifications, renewals, extensions, increases and
rearrangements of, and substitutions for, any of the foregoing.
Loans means the U.S. Revolving Loans, the Canadian Revolving Loans, the
U.K. Revolving Loans and the Term Loans provided for by Section 2.1 hereof.
Maintenance Capital Expenditures means, without duplication for any
period, the aggregate of all expenditures for maintenance of any asset that
would be classified as a fixed or capital asset on a consolidated balance sheet
of the U.S. Borrower and its Subsidiaries prepared in accordance with GAAP.
Majority Lenders means, at any time while no Obligations are
outstanding, any three or more Lenders having greater than 50% of the aggregate
amount of U.S. Commitments, the Canadian Commitments and the U.K. Commitments,
and at any time while Obligations are outstanding, any three or more Lenders
having greater than 50% of the sum of outstanding Term Loans plus U.S.
Commitments plus Canadian Commitments plus U.K. Commitments; provided that if
all U.S. Commitments, Canadian Commitments and U.K. Commitments have terminated,
the Majority Lenders shall be any three or more Lenders having greater than 50%
of the aggregate amount of all Obligations outstanding.
Margin Percentage means (i) on any day prior to July 1, 2004, 1.75% per
annum with respect to Base Rate Borrowings and Canadian Prime Loans and 2.75%
per annum with respect to LIBOR Borrowings and (ii) on and after July 1, 2004,
the applicable per annum percentage set forth at the appropriate intersection in
the table shown below, based on the Funded Debt to EBITDA Ratio as of the last
day of the then most recently ended fiscal quarter of U.S. Borrower
calculated by U.S. Agent as soon as practicable after receipt by U.S. Agent of
all financial reports required under this Agreement with respect to such fiscal
quarter (including a Compliance Certificate) (provided, however, that if the
Margin Percentage is increased as a result of the reported Funded Debt to EBITDA
Ratio, such increase shall be retroactive to the date that U.S. Borrower was
obligated to deliver such financial reports to U.S. Agent pursuant to the terms
of this Agreement and provided further, however, that if the Margin Percentage
is decreased as a result of the reported Funded Debt to EBITDA Ratio, and such
financial reports are delivered to U.S. Agent not more than ten (10) calendar
days after the date required to be delivered pursuant to the terms of this
Agreement, such decrease shall be retroactive to the date that U.S. Borrower was
obligated to deliver such financial reports to U.S. Agent pursuant to the terms
of this Agreement):
Canadian Prime Loans &
Funded Debt to LIBOR Borrowings Base Rate Borrowings
EBITDA Ratio Margin Percentage Margin Percentage
-------------- ----------------- ----------------------
Greater than or equal to
3.00 to 1.00 2.75 1.75
Greater than or equal to
2.50 to 1.00 but less than
3.00 to 1.00 2.50 1.50
Greater than or equal to
2.00 to 1.00 but less than
2.50 to 1.00 2.25 1.25
Less than 2.00 to 1.00 2.00 1.00
Material Adverse Effect means any material and adverse effect (i) on the
validity or enforceability of any of the Loan Documents or any of the rights or
remedies of the Agents or the Lenders thereunder or (ii) on the business,
condition (financial or otherwise), results of operations, assets, liabilities
or prospects of U.S. Borrower and its Subsidiaries on a consolidated basis.
Maximum Canadian Available Amount means, at any date, an amount equal to
the lesser of (i) $5,000,000 or (ii) the then effective Canadian Borrowing Base.
In connection with the application of any provision hereof using the term
"Maximum Canadian Available Amount", any amounts denominated in Canadian Dollars
shall be converted to Dollars using the then current Exchange Rate. The Maximum
Canadian Available Amount is subject to change pursuant to Section 2.4(c)
hereof.
Maximum U.K. Available Amount means, at any date, an amount equal to the
lesser of (i) $10,000,000 or (ii) the then effective U.K. Borrowing Base. In
connection with the application of any provision hereof using the term "Maximum
U.K. Available Amount", any amounts denominated in Pounds or Euros shall be
converted to Dollars using the then current
Exchange Rate. The Maximum U.K. Available Amount is subject to change pursuant
to Section 2.4(c) hereof.
Maximum U.S. Available Amount means, at any date, an amount equal to the
lesser of (i) $20,000,000 or (ii) the then effective U.S. Borrowing Base. The
Maximum U.S. Available Amount is subject to change pursuant to Sections 2.4(c)
and (d) hereof.
Milestone Xxxxxxxx means accounts for progress payments which are under
contracts entered in the ordinary course of business and that otherwise satisfy
the criteria of Eligible Accounts. Such Milestone Xxxxxxxx shall be supported by
written contracts (including purchase orders) that fully describe that such
xxxxxxxx are authorized and eligible.
Mortgage means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any real
Property to secure all or any part of the Obligations. Each Mortgage shall be
satisfactory in form and substance to the U.S. Agent.
Non-Cash Items means any accounting expense associated with (i) the
write down of Goodwill, as provided in FASB 19, 109, 142, 143 and 144, (ii) the
non-cash portion of employee compensation such as, but not limited to restricted
stock and/or options to the extent that such expenses are deducted in the
calculation of consolidated net earnings, (iii) non-cash foreign exchange
adjustments and (iv) any other non-cash expenses as reasonably determined by the
U.S. Agent, in its sole discretion.
Notes shall have the meaning assigned to such term in Section 2.7
hereof.
Notice of Entire Agreement means a notice of entire agreement, in Proper
Form, executed by Borrowers, each other Obligor and Agents, as the same may from
time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of
the following: (i) the aggregate principal amount of Loans outstanding hereunder
on such date, plus (ii) the aggregate amount of the outstanding Letter of Credit
Liabilities on such date, plus (iii) the aggregate amount of outstanding
Bankers' Acceptance Liabilities on such date, plus (iv) all other outstanding
liabilities, obligations and indebtedness of any Obligor under any Loan Document
on such date. For purposes of calculating the aggregate amount of Obligations,
all amounts or values expressed in Canadian Dollars, Pounds or Euros shall be
converted into Dollars at the applicable Exchange Rate in effect as of the date
of determination and all amounts or values expressed in other currencies shall
be converted into Dollars using such commercially reasonable means of
determining the applicable exchange rate as the applicable Agent may elect.
Obligors means each Borrower and each Person now or hereafter a party to
a Guaranty and/or a Security Agreement.
Organizational Documents means, with respect to a corporation organized
under the laws of any State of the United States or any Province of Canada, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the
partnership agreement establishing such partnership; with respect to a trust,
the instrument establishing such trust and with respect to any other Person, the
agreements or instruments pursuant to which such Person was formed and by which
such Person is governed; in each case including any and all modifications
thereof as of the date of the Loan Document referring to such Organizational
Document and any and all future modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the lesser of
(i) the Ceiling Rate for that day or (ii) the applicable Base Rate or Canadian
Prime Rate, as the case may be, plus the Margin Percentage for Base Rate
Borrowings then in effect plus three percent (3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA and any pension commission
or similar body or fund constituted under any Applicable Canadian Pension
Legislation.
Permitted Dividends means (i) dividends or distributions by a Subsidiary
of U.S. Borrower to U.S. Borrower or any other Subsidiary (other than a Foreign
Subsidiary or an Excluded Subsidiary) of U.S. Borrower and dividends or
distributions by any Foreign Subsidiary of U.S. Borrower to any other Foreign
Subsidiary of U.S. Borrower, (ii) stock dividends, (iii) so long as no Default
or Event of Default shall have occurred and be continuing (or would result
therefrom) and so long as the payment required under Section 3.2(b)(2) hereof
for such fiscal year (based on Excess Cash Flow for the preceding fiscal year)
shall have been paid, dividends paid by U.S. Borrower to its shareholders for
the fiscal year 2004 and in each fiscal year thereafter in an aggregate amount
not to exceed $1,500,000.
Permitted Investments means: (a) readily marketable securities issued or
fully guaranteed by the full faith and credit of the United States of America or
of Canada or of the United Kingdom with maturities of not more than one year;
(b) commercial paper rated "Prime 1" by Xxxxx'x Investors Service, Inc. or "A-1"
by Standard and Poor's Ratings Services or the equivalent thereof by Dominion
Bond Rating Service Limited with maturities of not more than 180 days; (c)
certificates of deposit or repurchase obligations issued by any U.S., Canadian
or United Kingdom domestic bank having capital surplus of at least $100,000,000
or by any other financial institution acceptable to the Majority Lenders, all of
the foregoing not having a maturity of more than one year from the date of
issuance thereof; (d) existing loans to the Chief Executive Officer and
President of U.S. Borrower in the aggregate amount (inclusive of principal and
interest) not exceeding $4,000,000; (e) equipment lease financing provided to
customers which are not Affiliates of U.S. Borrower or any of its Subsidiaries
in the ordinary course of business in an aggregate amount not exceeding
$5,000,000 at any one time outstanding; (f) capital contributions by U.S.
Borrower or any of its Subsidiaries to NATCO (UK) Limited in an aggregate amount
not exceeding $750,000; (g) capital contributions by National Tank Company to
Canadian Borrower in an aggregate amount not exceeding $8,000,000 so long as the
proceeds of such capital contributions are used solely to pay indebtedness owing
by Canadian Borrower to National Tank Company; (h) loans and/or capital
contributions by U.S. Borrower or any of its Subsidiaries to any Affiliate or
agent of U.S. Borrower conducting business in Angola not to exceed $600,000 in
the aggregate at any one time outstanding; and (i) loans and/or capital
contributions by U.S. Borrower or any of its Subsidiaries to any Foreign
Subsidiary of U.S. Borrower not to exceed $1,000,000 in the aggregate at any one
time outstanding (provided, however, that the aggregate of Permitted Investments
in any fiscal year under this clause (i) plus
the aggregate amount of Capital Expenditures made by the U.S. Borrower and its
Subsidiaries in such fiscal year shall not exceed $10,000,000).
Permitted Liens means each of the following: (a) Liens for taxes, but
only to the extent that payment thereof shall not at the time be due or if due,
the payment thereof is being diligently contested in good faith and adequate
reserves computed in accordance with GAAP have been set aside therefor; (b)
Liens in effect on the Effective Date and disclosed to the Lenders in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof or in a schedule hereto; (c) normal reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions and
encumbrances which do not secure Borrowed Money Indebtedness and which do not
have a material adverse effect on the value or utility of the applicable
Property; (d) Liens in favor of any Agent or any Lender under the Loan
Documents, including without limitation, Liens securing Interest Rate Risk
Indebtedness or Currency Exchange Risk Indebtedness owed to one or more of the
U.S. Lenders (but not to any Person which is not, at such time, a U.S. Lender);
(e) Liens incurred or deposits made in the ordinary course of business (1) in
connection with workmen's compensation, unemployment insurance, social security
and other like laws, or (2) to secure insurance in the ordinary course of
business, the performance of bids, tenders, contracts, leases, licenses,
statutory obligations, surety, appeal and performance bonds and other similar
obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of Property; (f) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution and enforcement
of such Liens are effectively stayed and the claims secured thereby are being
actively contested in good faith with adequate reserves made therefor in
accordance with GAAP; (g) Liens imposed by law, such as landlords', carriers',
warehousemen's, artisans', mechanics', materialmen's and vendors' liens,
incurred in good faith in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings if adequate reserves with respect thereto are maintained
in accordance with GAAP; (h) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, and restrictions on
the use of Property, and which do not in any case singly or in the aggregate
materially impair the present value or utility of the applicable Property; (i)
Liens securing purchase money indebtedness permitted under Section 8.1 hereof
and covering the Property so purchased; (j) capital leases and sale/leaseback
transactions permitted under the other provisions of this Agreement; (k) Liens
securing the Export/Import Credit Facilities covering the "International
Collateral", as such term is defined in the Security Agreements; (l) Liens
securing the Export/Import Credit Facilities, subordinated to the Liens securing
the Obligations in a manner acceptable to U.S. Agent, covering Accounts of the
U.S. Borrower and its Subsidiaries; and (m) extensions, renewals and
replacements of Liens referred to in clauses (a) through (l) of this definition;
provided that any such extension, renewal or replacement Lien shall be limited
to the Property or assets covered by the Lien extended, renewed or replaced and
that the Borrowed Money Indebtedness secured by any such extension, renewal or
replacement Lien shall be in an amount not greater than the amount of the
indebtedness secured by the Lien extended, renewed or replaced.
Permitted Senior Indebtedness means Borrowed Money Indebtedness in an
aggregate amount not exceeding $10,000,000 with respect to which Borrower shall
have demonstrated to the satisfaction of the U.S. Agent on a pro forma basis
that no Default or Event of Default could
be reasonably expected to arise as a result of the incurrence of such Borrowed
Money Indebtedness and which (i) is unsecured, (ii) contains financial covenants
which are no more onerous than the covenants set forth herein, and (iii) does
not require for any amortization prior to the last to occur of the Term Loan
Maturity Date or the Revolving Loan Maturity Date.
Permitted Subordinated Indebtedness means Borrowed Money Indebtedness
with respect to which Borrower shall have demonstrated to the satisfaction of
the U.S. Agent on a pro forma basis that no Default or Event of Default could be
reasonably expected to arise as a result of the incurrence of such Borrowed
Money Indebtedness and which (i) is unsecured, (ii) is subordinated to the
Obligations in a manner and pursuant to documentation acceptable to the Majority
Lenders, (iii) contains financial covenants which are no more onerous than the
covenants set forth herein, (iv) does not require for any amortization prior to
the last to occur of the Term Loan Maturity Date or the Revolving Loan Maturity
Date and (v) contains other terms and conditions standard in subordinated debt
issuances.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code or any Applicable Canadian Pension Legislation and is either (a) maintained
by, or contributed to by, any Borrower or any member of the Controlled Group for
employees of any Borrower or any member of the Controlled Group or (b)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
any Borrower or any member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions.
Pounds means the lawful currency for the time being of the United
Kingdom.
Prime Rate means, on any day, (a) as to Loans made to U.S. Borrower, the
rate of interest publicly announced by Xxxxx Fargo as its prime rate in effect
at its principal office in San Francisco, California, (b) as to Loans
denominated in Dollars made to Canadian Borrower, the base rate for that day for
Loans denominated in Dollars made in Canada quoted by HSBC Canada and (c) as to
Loans made to U.K. Borrower, the rate for that day for Loans denominated in
Dollars quoted by HSBC U.K. to prime banks in the London interbank market for
the relevant amount and the relevant period or such other rate as notified by
HSBC U.K. to U.K. Borrower. The Prime Rate is, in each case, a reference rate
and does not necessarily represent the lowest or best rate or a favored rate,
and Xxxxx Fargo, HSBC Canada, HSBC U.K., each Agent and each Lender disclaims
any statement, representation or warranty to the contrary. Xxxxx Fargo, HSBC
Canada, HSBC U.K., any Agent or any Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
Principal Office means (a) as to Obligations of U.S. Borrower, the
principal office of U.S. Agent, presently located at 0000 Xxxxxxxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxx 00000, (b) as to Obligations of Canadian Borrower, the principal
office of Canadian Agent, presently located at 000 - 0xx Xxxxxx X.X., Xxxxxxx,
Xxxxxxx, X0X 0X0 Xxxxxx and (c) as to Obligations of U.K.
Borrower, the principal office of U.K. Agent, presently located at Xxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxxxx XX0 0XX Xxxxxx Xxxxxxx.
Proper Form means in form and substance reasonably satisfactory to U.S.
Agent.
Property means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Qualified Institution means (a) any bank or trust company which is
organized under the laws of any country which is a member of the Organization
for Economic Cooperation and Development or any political subdivision of any
such country, and having capital, surplus and undivided profits aggregating at
least $100,000,000.00 (or its equivalent in another currency) as of the date of
such Person's most recent financial reports, and (b) any other Person approved
in writing by U.S. Agent.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial statements
of a Person, which statements shall include a balance sheet as of the end of the
applicable fiscal quarter and an income statement and a statement of cash flows
for such fiscal quarter and for the fiscal year to date, subject to normal
year-end adjustments, all setting forth in comparative form the corresponding
figures as of the end of and for the corresponding fiscal quarter of the
preceding year, prepared in accordance with GAAP in all material respects except
that such statements are condensed and exclude detailed footnote disclosures and
certified by the chief financial officer or other authorized officer of such
Person as fairly presenting, in all material respects, the consolidated
financial condition of such person as of such date. As to U.S. Borrower only,
Quarterly Financial Statements shall also include unaudited consolidating
financial statements for U.S. Borrower and its Subsidiaries, in Proper Form,
certified by the chief financial officer or other authorized officer of U.S.
Borrower as presenting fairly in all material respects the consolidating
financial position of U.S. Borrower and its Subsidiaries.
Rate Designation Date means that Business Day which is (a) in the case
of Base Rate Borrowings by the U.S. Borrower, 11:00 a.m., Houston, Texas time,
in the case of Base Rate Borrowings by the Canadian Borrower, 12:00 noon,
Toronto, Ontario time, and in the case of Base Rate Borrowings by the U.K.
Borrower, 11:00 a.m., London, United Kingdom time, in each case on the date of
such borrowing and (b) in the case of LIBOR Borrowings by the U.S. Borrower,
11:00 a.m., Houston, Texas time, in the case of LIBOR Borrowings by the Canadian
Borrower, 12:00 noon, Toronto, Ontario time and in the case of LIBOR Borrowings
by the U.K. Borrower, 11:00 a.m., London, United Kingdom time, in each case on
the date three Business Days preceding the first day of any proposed Interest
Period.
Rate Designation Notice means a written notice substantially in the form
of Exhibit B.
Refunding Bankers' Acceptance has the meaning specified in Section
2.3(b).
Regulation D means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and includes any successor or other
regulation relating to reserve requirements applicable to member banks of the
U.S. Federal Reserve System.
Regulatory Change means with respect to any Lender, any change on or
after the Effective Date in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of lenders including
such Lender under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, (i) the obligations of
any Borrower then outstanding, or which may thereafter arise, in respect of
Letters of Credit under this Agreement, to reimburse the applicable Issuers for
the amount paid by such Issuers in respect of any drawing under such Letters of
Credit and (ii) the obligations of the Canadian Borrower then outstanding, or
which may thereafter arise, in respect of any Bankers' Acceptance purchased by
any Canadian Lender or paid by it on maturity thereof. Except for Canadian
Letters of Credit denominated in Canadian Dollars, Reimbursement Obligations in
respect of any Letter of Credit shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other than
Dollars.
Request for Extension of Credit means a request for extension of credit
duly executed by any responsible officer, which may include the president, chief
executive officer, the chief financial officer or the director of treasury of
U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case may be, or any
other Person duly authorized by one of such officers, appropriately completed
and substantially in the form of Exhibit A-1 (U.S. Borrower), Exhibit A-2
(Canadian Borrower) or Exhibit A-3 (U.K. Borrower) attached hereto, as the case
may be.
Requirements of Environmental Law means all requirements imposed by any
law (including for example and without limitation The Resource Conservation and
Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.
Reset Date has the meaning specified in Section 2.9(a).
Restricted Indebtedness means Borrowed Money Indebtedness of the
Borrowers or any of their Subsidiaries, the payment, prepayment, redemption,
repurchase or defeasance of which is restricted under Article 8 hereof.
Revolving Loan Maturity Date means the maturity of the Revolving Notes
and the other U.S. Revolving Loan Obligations, Canadian Obligations and U.K.
Obligations, March 31, 2007.
Revolving Loans means the U.S. Revolving Loans, the U.K. Revolving Loans
and the Canadian Revolving Loans.
Revolving Notes means the U.S. Revolving Notes, the U.K. Revolving
Notes, Canadian Dollar Revolving Notes and the Canadian Revolving Notes.
SACROC Contracts means (i) that certain Service Agreement for NATCO CO2
187 MMCFD Separation Facility for SACROC Unit dated as of November 27, 2003
executed by and between National Tank Company and Xxxxxx Xxxxxx CO2 Company,
L.P., (ii) that certain Service Agreement for NATCO CO2 Topping Unit Separation
Facility at SACROC dated as of March 27, 2001 executed by and between National
Tank Company and Xxxxxx Xxxxxx CO2 Company, L.P. and (iii) that certain Service
Agreement for Cynara CO2 Separation Facilities at SACROC dated as of June 1,
1997 executed by and between The Cynara Company and Pennzoil Exploration and
Production Company, as amended by Addendum dated as of Match 27, 2001 executed
by and between National Tank Company and Xxxxxx Xxxxxx CO2 Company, L.P., as the
foregoing may from time to time be amended, modified, restated or supplemented.
SACROC Facility means the totality of National Tank Company's owned and
operated CO2, 100 MMCFD gas separation facility, CO2 topping unit separation
facility and the SACROC Facility Expansion, together with all auxiliary systems
and equipment, located in Xxxxxx County, Texas, and servicing Xxxxxx Xxxxxx CO2
Company, L.P.'s SACROC unit.
SACROC Facility Expansion means National Tank Company's owned and
operated CO2, 187 MMCFD gas separation facility, commissioned effective January
1, 2004, located in Xxxxxx County, Texas, and servicing Xxxxxx Xxxxxx CO2
Company, L.P.'s SACROC unit.
Security Agreements means (i) the security agreements, each in Proper
Form, executed or to be executed in favor of U.S. Agent, securing the U.S.
Obligations, covering all material personal Property (other than the Equity
Interests described in clauses (ii) and (iv) of this definition) of U.S.
Borrower and its Subsidiaries (other than Foreign Subsidiaries or Excluded
Subsidiaries), (ii) security agreements, each in Proper Form, executed or to be
executed in favor of U.S. Agent, securing the U.S. Obligations, covering all of
the issued and outstanding Equity Interests in any Subsidiary of U.S. Borrower
(other than Foreign Subsidiaries and Excluded Subsidiaries and other than
Subsidiaries which are wholly-owned direct Subsidiaries of Foreign Subsidiaries)
and 65% of the issued and outstanding Equity Interests in U.K. Borrower and
Canadian Borrower, (iii) security agreements, each in Proper Form, executed or
to be executed in favor of Canadian Agent, securing the Canadian Obligations,
covering all material personal Property of Canadian Borrower and each of its
Subsidiaries (including all Equity Interests in any Subsidiary of Canadian
Borrower), and (iv) security agreements, each in Proper Form, executed or to be
executed in favor of U.K. Agent, securing the U.K. Obligations, covering all
material personal Property of U.K. Borrower and each of its Subsidiaries that is
not an Excluded Subsidiary (including all Equity Interests in any Subsidiary of
U.K. Borrower which is not an Excluded Subsidiary), as the same may from time to
time be amended, modified, restated or supplemented.
Security Documents means, collectively, the Mortgages, the Security
Agreements, the Financing Statements and any and all other security documents
now or hereafter executed and
delivered by any Obligor to secure all or any part of the Obligations, as any of
them may from time to time be amended, modified, restated or supplemented.
Notwithstanding anything to the contrary set forth herein, at the option of any
Agent, the Security Documents executed by U.S. Borrower and any of its
Subsidiaries which are not Foreign Subsidiaries shall be executed in favor of
the Collateral Agent under the Collateral Agency Agreement rather than in favor
of the U.S. Agent and shall secure all of the Obligations rather than the U.S.
Obligations.
Stated Rate means, with respect to any Lender, the effective weighted
per annum rate of interest applicable to the Loans made by such Lender;
provided, that if on any day such rate shall exceed the Ceiling Rate for that
day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each
day thereafter until the total amount of interest accrued at the Stated Rate on
the unpaid principal balances of the Notes plus the Additional Interest equals
the total amount of interest which would have accrued if there had been no
Ceiling Rate. If the Notes mature (or are prepaid) before such equality is
achieved, then, in addition to the unpaid principal and accrued interest then
owing pursuant to the other provisions of the Loan Documents, the applicable
Borrower promises to pay on demand to the order of the holder of the applicable
Note interest in an amount equal to the excess (if any) of (a) the lesser of (i)
the total interest which would have accrued on such Note if the Stated Rate had
been defined as equal to the Ceiling Rate from time to time in effect and (ii)
the total interest which would have accrued on such Note if the Stated Rate were
not so prohibited from exceeding the Ceiling Rate, over (b) the total interest
actually accrued on such Note to such maturity (or prepayment) date. Without
notice to any Borrower or any other Person, the Stated Rate shall automatically
fluctuate upward and downward in accordance with the provisions of this
definition.
Subsidiary means, as to a particular parent Corporation, any Corporation
of which more than 50% of the indicia of equity rights (whether outstanding
capital stock or otherwise) is at the time directly or indirectly owned by, such
parent Corporation.
Synthetic Purchase Agreement means any swap, derivative or other
agreement or combination of agreements pursuant to which any Borrower or a
Subsidiary of any Borrower is or may become obligated to make (i) any payment in
connection with a purchase by any third party from a Person other than the
applicable Borrower or a Subsidiary of the applicable Borrower of any Equity
Interest or Restricted Indebtedness or (ii) any payment (other than on account
of a permitted purchase by it of any Equity Interest or any Restricted
Indebtedness) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Restricted Indebtedness; provided
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of any Borrower or Subsidiaries of any
Borrower (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.
Tangible Net Worth means, with respect to U.S. Borrower and its
Subsidiaries, tangible net worth less other non-cash comprehensive loss or
income and less notes receivable from officers and shareholders, each as
determined under GAAP.
Taxes shall have the meaning ascribed to it in Section 4.1(d) hereof.
Termination Date means the earlier of (a) the Revolving Loan Maturity
Date or (b) the date specified by any Agent in accordance with Section 9.1
hereof.
Term Loan means a Loan made pursuant to Section 2.1(e) hereof.
Term Loan Lender means each U.S. Lender with any outstanding Term Loans.
Term Loan Maturity Date means March 31, 2007.
Term Loan Obligations means, as at any date of determination thereof,
the aggregate principal amount of Term Loans outstanding hereunder on such date.
Term Notes means the Notes of U.S. Borrower evidencing the Term Loans,
in substantially the form of Exhibit J hereto.
U.K. Borrowing Base means, as at any date, the amount of the U.K.
Borrowing Base shown on the Borrowing Base Certificate then most recently
delivered pursuant to Section 7.2(f) hereof, determined by calculating the
amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts of the U.K.
Borrower and its Subsidiaries which are Foreign Subsidiaries
(other than Excluded Subsidiaries) at said date, plus
(ii) 80% of the aggregate amount of all Milestone Billings of the U.K.
Borrower and its Subsidiaries which are Foreign Subsidiaries
(other than Excluded Subsidiaries) at said date; provided that
the amount calculated pursuant to this clause (ii) shall not
exceed 50% of the U.K. Borrowing Base, plus
(iii) 50% of the aggregate amount of all Eligible Inventory of U.K.
Borrower and its Subsidiaries which are Foreign Subsidiaries
(other than Excluded Subsidiaries) at said date (determined at
the lower of cost or market on a consistent basis and in
accordance with GAAP); provided that the amount calculated
pursuant to this clause (iii) shall not exceed 40% of the U.K.
Borrowing Base, plus
(iv) 100% of the aggregate amount of cash (or cash equivalents
acceptable to the U.S. Agent) delivered to U.K. Agent and
specifically pledged as security for the U.K. Obligations
pursuant to documentation satisfactory to the U.S. Agent.
In the absence of a current Borrowing Base Certificate, U.S. Agent shall
determine the U.K. Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the U.K. Borrowing Base from time to time so determined shall be the U.K.
Borrowing Base for all purposes of this Agreement until a current Borrowing Base
Certificate, in Proper Form, is furnished to and accepted by U.S. Agent. For
purposes of calculating the U.K. Borrowing Base, all amounts or values expressed
in Pounds or
Euros shall be converted into Dollars at the Exchange Rate in effect as of the
date of the applicable Borrowing Base Certificate.
U.K. Commitment means, as to any U.K. Lender, the obligation, if any, of
such U.K. Lender to make U.K. Revolving Loans, incur or participate in Letter of
Credit Liabilities relating to U.K. Letters of Credit in an aggregate principal
amount at any one time outstanding up to (but not exceeding) the amount, if any,
set forth opposite such U.K. Lender's name on the signature pages hereof under
the caption "U.K. Commitment", or otherwise provided for in an Assignment and
Acceptance (as the same may be increased or reduced from time to time pursuant
to Section 2.4 hereof).
U.K. Lender means each lender party hereto with any U.K. Commitment or
any outstanding U.K. Obligations.
U.K. Letters of Credit has the meaning assigned to such term in Section
2.2 hereof.
U.K. Obligations means, as at any date of determination thereof, the sum
of the following (determined without duplication): (i) the aggregate principal
amount of U.K. Revolving Loans outstanding hereunder on such date, plus (ii) the
aggregate amount of Letter of Credit Liabilities outstanding on such date
relating to U.K. Letters of Credit. For purposes of calculating the aggregate
amount of U.K. Obligations, all amounts or values expressed in Pounds or Euros
shall be converted into Dollars at the Exchange Rate in effect as of the date of
determination.
U.K. Revolving Loan means any revolving credit loan made pursuant to
Section 2.1(c) hereof.
U.K. Revolving Notes means the Notes of U.K. Borrower evidencing the
U.K. Revolving Loans, in the form of Exhibit K hereto.
Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a potential liability
of any member of the Controlled Group to the PBGC or a Plan under Title IV of
ERISA and, with respect to any Plan governed by Applicable Canadian Pension
Legislation, the amount (if any) by which the solvency liabilities under such
Plan (determined in accordance with actuarial assumptions contained in the most
recent actuarial valuation report for such Plan) exceed the fair market value of
the assets of such Plan. With respect to multi-employer Plans, the term
"Unfunded Liabilities" shall also include contingent liability for withdrawal
liability under Section 4201 of ERISA or under Applicable Canadian Pension
Legislation to all multi-employer Plans to which any Borrower or any member of a
Controlled Group for employees of any Borrower contributes in the event of
complete withdrawal from such plans.
U.S. Borrowing Base means, as at any date, the amount of the U.S.
Borrowing Base shown on the Borrowing Base Certificate then most recently
delivered pursuant to Section 7.2(f) hereof, determined by calculating the
amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts of the
U.S. Borrower and its Subsidiaries (other than Foreign
Subsidiaries and Excluded Subsidiaries) at said date, plus
(ii) 80% of the aggregate amount of all Milestone Billings of the
U.S. Borrower and its Subsidiaries (other than Foreign
Subsidiaries and Excluded Subsidiaries) at said date; provided
that the amount calculated pursuant to this clause (ii) shall
not exceed 15% of the U.S. Borrowing Base, plus
(iii) 50% of the aggregate amount of all Eligible Inventory of U.S.
Borrower and its Subsidiaries (other than Foreign Subsidiaries
and Excluded Subsidiaries) at said date (determined at the
lower of cost or market on a consistent basis and in
accordance with GAAP); provided that the amount calculated
pursuant to this clause (iii) shall not exceed 40% of the U.S.
Borrowing Base, plus
(iv) 100% of the aggregate amount of cash (or cash equivalents
acceptable to the U.S. Agent) delivered to U.S. Agent and
specifically pledged as security for the U.S. Obligations
pursuant to documentation satisfactory to the U.S. Agent.
In the absence of a current Borrowing Base Certificate, U.S. Agent shall
determine the U.S. Borrowing Base from time to time in its reasonable
discretion, taking into account all information reasonably available to it, and
the U.S. Borrowing Base from time to time so determined shall be the U.S.
Borrowing Base for all purposes of this Agreement until a current Borrowing Base
Certificate, in Proper Form, is furnished to and accepted by U.S. Agent.
U.S. Commitment means, as to any U.S. Lender, the obligation, if any, of
such U.S. Lender to make U.S. Revolving Loans and incur or participate in Letter
of Credit Liabilities relating to U.S. Letters of Credit in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the
amount, if any, set forth opposite such U.S. Lender's name on the signature
pages hereof under the caption "U.S. Commitment", or otherwise provided for in
an Assignment and Acceptance (as the same may be increased or reduced from time
to time pursuant to Section 2.4 hereof).
U.S. Lender means each lender party hereto with any U.S. Commitment or
any outstanding U.S. Obligations.
U.S. Letters of Credit shall have the meaning assigned to such term in
Section 2.2 hereof.
U.S. Loan means a U.S. Revolving Loan or a Term Loan.
U.S. Obligations means U.S. Revolving Loan Obligations and Term Loan
Obligations.
U.S. Revolving Loan means a Loan made pursuant to Section 2.1(a) hereof.
U.S. Revolving Loan Obligations means, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of U.S. Revolving Loans outstanding hereunder on such
date plus (ii) the aggregate amount of the Letter of Credit Liabilities
outstanding on such date relating to U.S. Letters of Credit.
U.S. Revolving Notes means the Notes of U.S. Borrower evidencing the
U.S. Revolving Loans, in the form of Exhibit D hereto.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement.
2. Commitments; Loans; BA's and Letters of Credit.
2.1 Loans and BA's. Each Lender severally agrees, subject to all of the
terms and conditions of this Agreement (including, without limitation, Sections
5.1 and 5.2 hereof), to make Loans and, in the case of Canadian Lenders, to
accept and purchase Bankers' Acceptances, as follows:
(a) U.S. Revolving Loans. From time to time on or after the Effective
Date and during the Availability Period, each U.S. Lender shall make loans under
this Section 2.1(a) to U.S. Borrower in an aggregate principal amount at any one
time outstanding (including its Commitment Percentage of all Letter of Credit
Liabilities relating to U.S. Letters of Credit at such time) up to but not
exceeding such U.S. Lender's Commitment Percentage of the Maximum U.S. Available
Amount. Subject to the conditions in this Agreement, any such U.S. Revolving
Loan repaid prior to the Termination Date may be reborrowed pursuant to the
terms of this Agreement; provided, that any and all such U.S. Revolving Loans
shall be due and payable in full on the Termination Date. Loans made under this
Section 2.1(a) shall be made and denominated in Dollars. The aggregate of all
U.S. Revolving Loans to be made by the U.S. Lenders in connection with a
particular borrowing shall be equal to the lesser of (i) the unutilized portion
of the U.S. Commitments or (ii) $500,000 or any integral multiple of $100,000 in
excess thereof.
(b) Canadian Revolving Loans. From time to time on or after the
Effective Date and during the Availability Period, each Canadian Lender shall
make loans under this Section 2.1(b) to Canadian Borrower in an aggregate
principal amount at any one time outstanding (including such Canadian Lender's
Commitment Percentage of all Bankers' Acceptance Liabilities and all Letter of
Credit Liabilities relating to Canadian Letters of Credit at such time) up to
but not exceeding such Canadian Lender's Commitment Percentage of the Maximum
Canadian Available Amount. Subject to the conditions in this Agreement, any such
Canadian Revolving Loan repaid prior to the Termination Date may be reborrowed
pursuant to the terms of this Agreement; provided, that any and all such
Canadian Revolving Loans shall be due and payable in full on the Termination
Date. Loans made under this Section 2.1(b) may, at the option of Canadian
Borrower, be made and denominated either in Dollars or in Canadian Dollars (but
all Loans to be made under a particular borrowing must be made and denominated
in the same currency). The aggregate of all Canadian Revolving Loans to be made
by the Canadian Lenders in connection with a particular borrowing shall be equal
to the lesser of (i) the unutilized portion
of the Canadian Commitments or (ii) $500,000 or any integral multiple of
$100,000 in excess thereof (if the Loans are denominated in Dollars) or
C$500,000 or any integral multiple of C$100,000 in excess thereof (if the Loans
are denominated in Canadian Dollars). Notwithstanding anything else contained in
Sections 3.1, 4.3 and 5.2, the Canadian Borrower may borrow Canadian Dollars by
way of overdraft and any such Borrowings shall be deemed (i) to be an advance of
and be outstanding as a Canadian Prime Loan from the date such overdraft is
honored and (ii) to be a representation and warranty by the Canadian Borrower
that at the time any such overdraft is honored all of the conditions contained
in Section 5.2 (other than paragraph (b) thereof) have been satisfied.
(c) U.K. Revolving Loans. From time to time on or after the Effective
Date and during the Availability Period, each U.K. Lender shall make loans under
this Section 2.1(c) to U.K. Borrower in an aggregate principal amount at any one
time outstanding (including its Commitment Percentage of all Letter of Credit
Liabilities relating to U.K. Letters of Credit at such time) up to but not
exceeding such U.K. Lender's Commitment Percentage of the Maximum U.K. Available
Amount. Subject to the conditions in this Agreement, any such U.K. Revolving
Loan repaid prior to the Termination Date may be reborrowed pursuant to the
terms of this Agreement; provided, that any and all such U.K. Revolving Loans
shall be due and payable in full on the Termination Date. Loans made under this
Section 2.1(c) shall be made and denominated in Dollars. The aggregate of all
U.K. Revolving Loans to be made by the U.K. Lenders in connection with a
particular borrowing shall be equal to the lesser of (i) the unutilized portion
of the U.S. Commitments or (ii) $500,000 or any integral multiple of $100,000 in
excess thereof.
(d) Bankers' Acceptances. From time to time on or after the Effective
Date and during the Availability Period, each Canadian Lender shall accept and
purchase Bankers' Acceptances drawn on it under Section 2.3 hereof by Canadian
Borrower in an aggregate principal amount at any one time outstanding (including
such Canadian Lender's Commitment Percentage of all Canadian Revolving Loans
outstanding at such time and all Letter of Credit Liabilities relating to
Canadian Letters of Credit at such time) up to but not exceeding such Canadian
Lender's Commitment Percentage of the Maximum Canadian Available Amount. No
Bankers' Acceptance may be made or accepted on or after the Termination Date and
all outstanding Bankers' Acceptances shall mature no later than the end of the
Availability Period. Bankers' Acceptances shall be made and denominated in
Canadian Dollars.
(e) Term Loans. On the Effective Date, each Term Loan Lender shall make
a loan to U.S. Borrower in the amount set forth opposite such Term Loan Lender's
name on the signature pages hereof under the caption "Term Loans".
(f) Chapter 346 Not Applicable. Borrowers, Agents and the Lenders agree
pursuant to Chapter 346 ("Chapter 346") of the Texas Finance Code, that Chapter
346 (which relates to open-end line of credit revolving loan accounts) shall not
apply to this Agreement, the Notes or any Obligation and that neither the Notes
nor any Obligation shall be governed by Chapter 346 or subject to its provisions
in any manner whatsoever.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
relating to U.S. Letters of Credit shall never exceed the aggregate amount of
the U.S. Commitments and that aggregate Letter of Credit Liabilities relating to
Canadian Letters of Credit shall never exceed the aggregate amount of the
Canadian Commitments and that aggregate Letter of Credit Liabilities relating to
U.K. Letters of Credit shall never exceed the aggregate amount of the U.K.
Commitments, (i) U.S. Borrower shall have the right, in addition to U.S.
Revolving Loans provided for in Section 2.1(a) hereof, to utilize the U.S.
Commitments from time to time during the Availability Period by obtaining the
issuance of letters of credit if U.S. Borrower shall so request in the notice
referred to in Section 2.2(b)(i) hereof (such letters of credit as any of them
may be amended, supplemented, extended or confirmed from time to time, being
herein collectively called the "U.S. Letters of Credit"), Canadian Borrower
shall have the right, in addition to Canadian Revolving Loans provided for in
Section 2.1(b) hereof and Bankers' Acceptances provided for in Section 2.1(d)
hereof, to utilize the Canadian Commitments from time to time during the
Availability Period by obtaining the issuance of letters of credit if Canadian
Borrower shall so request in the notice referred to in Section 2.2(b)(i) hereof
(such letters of credit as any of them may be amended, supplemented, extended or
confirmed from time to time, being herein collectively called the "Canadian
Letters of Credit", which term shall include, if the Canadian Lenders agree,
letters of guarantee and performance bonds) and U.K. Borrower shall have the
right, in addition to U.K. Revolving Loans provided for in Section 2.1(c)
hereof, to utilize the U.K. Commitments from time to time during the
Availability Period by obtaining the issuance of letters of credit if U.K.
Borrower shall so request in the notice referred to in Section 2.2(b)(i) hereof
(such letters of credit as any of them may be amended, supplemented, extended or
confirmed from time to time, being herein collectively called the "U.K. Letters
of Credit", which term shall include, if the U.K. Lenders agree, letters of
guarantee and performance bonds) and (ii) Xxxxx Fargo agrees to issue U.S.
Letters of Credit, HSBC Canada agrees to issue Canadian Letters of Credit and
HSBC U.K. agrees to issue U.K. Letters of Credit. The Letters of Credit will, at
the request of the applicable Borrower, be issued in currencies other than those
expressly provided for in this Agreement so long as the applicable Agent is
reasonably satisfied that such currency is readily available in the required
amounts and that such currency selection is not otherwise disadvantageous to any
Agent or any Lender. Upon the date of the issuance of a Letter of Credit, the
applicable Issuer shall be deemed, without further action by any party hereto,
to have sold to each U.S. Lender, Canadian Lender or U.K. Lender, as the case
may be, and each such U.S. Lender, Canadian Lender or U.K. Lender, as the case
may be, shall be deemed, without further action by any party hereto, to have
purchased from the applicable Issuer, a participation, to the extent of such
Lender's Commitment Percentage, in such Letter of Credit and the related Letter
of Credit Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the Termination Date. No Letter of
Credit shall have an expiration date after the date which is one year after the
Revolving Loan Maturity Date. Any Letter of Credit that shall have an expiration
date after the Revolving Loan Maturity Date shall be subject to Cover, such
Cover to be delivered to the applicable Agent on the later of the date of
issuance of such Letter of Credit or the date which is one (1) year prior to the
Revolving Loan Maturity Date. Xxxxx Fargo or, with the prior approval of U.S.
Borrower, U.S. Agent and the applicable U.S. Lender, another U.S. Lender shall
be the Issuer of each U.S. Letter of Credit; HSBC Canada or, with the prior
approval of Canadian Borrower, Canadian Agent and the applicable Canadian
Lender, another
Canadian Lender shall be the Issuer of each Canadian Letter of Credit
and HSBC U.K. or, with the prior approval of U.K. Borrower, U.K. Agent and the
applicable U.K. Lender, another U.K. Lender shall be the Issuer of each U.K.
Letter of Credit. Except as provided above, all U.S. Letters of Credit and U.K.
Letters of Credit shall be denominated in Dollars and all Canadian Letters of
Credit shall, at the option of Canadian Borrower, be denominated in either
Dollars or Canadian Dollars. Fees due in respect of a U.S. Letter of Credit or a
U.K. Letter of Credit shall be payable in Dollars and fees due in respect of a
Canadian Letter of Credit shall be payable (i) in Dollars, if such Letter of
Credit is denominated in Dollars and (ii) in Canadian Dollars if such Letter of
Credit is denominated in Canadian Dollars or any other currency.
(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case
may be, shall give the appropriate Agent notice requesting each issuance
of a Letter of Credit hereunder as provided in Section 4.3 hereof and
shall furnish such additional information regarding such transaction as
such Agent may reasonably request. Upon receipt of such notice, such
Agent shall promptly notify each U.S. Lender, Canadian Lender or U.K.
Lender, as the case may be, of the contents thereof and of such Lender's
Commitment Percentage of the amount of such proposed Letter of Credit.
(ii) No U.S. Letter of Credit may be issued if after giving effect
thereto the sum of (A) the aggregate outstanding principal amount of
U.S. Revolving Loans plus (B) the aggregate Letter of Credit Liabilities
relating to U.S. Letters of Credit would exceed the Maximum U.S.
Available Amount. No Canadian Letter of Credit may be issued if after
giving effect thereto the sum of (A) the aggregate outstanding principal
amount of Canadian Revolving Loans plus (B) the aggregate Letter of
Credit Liabilities relating to Canadian Letters of Credit plus (C) the
aggregate Bankers' Acceptance Liabilities would exceed the Maximum
Canadian Available Amount. No U.K. Letter of Credit may be issued if
after giving effect thereto the sum of (A) the aggregate outstanding
principal amount of U.K. Revolving Loans plus (B) the aggregate Letter
of Credit Liabilities relating to U.K. Letters of Credit would exceed
the Maximum U.K. Available Amount. On each day during the period
commencing with the issuance of any Letter of Credit and until such
Letter of Credit shall have expired or been terminated, the U. S.
Commitment, Canadian Commitment or U.K. Commitment, as the case may be,
of each applicable Lender shall be deemed to be utilized for all
purposes hereof, including Section 2.5(a), in an amount equal to such
Lender's Commitment Percentage of the amount then available for drawings
under such Letter of Credit (or any unreimbursed drawings under such
Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment thereunder, the applicable Issuer shall notify
the Agents and thereafter the U.S. Agent, the Canadian Agent or the U.K.
Agent, as the case may be, shall promptly notify the applicable Borrower
and each applicable Lender as to the amount to be paid as a result of
such demand and the payment date therefor. If at any time prior to the
earlier of the expiration date of a Letter of Credit or the Termination
Date any applicable Issuer shall have made a payment to a beneficiary of
a Letter of Credit in respect of a drawing
under such Letter of Credit, each applicable Lender will pay to the
U.S. Agent, the Canadian Agent or the U.K. Agent, as the case may be,
immediately upon demand by such Issuer at any time during the period
commencing after such payment until reimbursement thereof in full by the
applicable Borrower, an amount equal to such Lender's Commitment
Percentage of such payment, together with interest on such amount for
each day from the date of demand for such payment (or, if such demand is
made after 11:00 a.m. Houston, Texas time (in the case of a U.S. Letter
of Credit) or 12:00 noon Toronto, Ontario time (in the case of a
Canadian Letter of Credit) or 11:00 a.m. London, United Kingdom time (in
the case of a U.K. Letter of Credit) on such date, from the next
succeeding Business Day) to the date of payment by such Lender of such
amount at a rate of interest per annum equal to (i) in respect of U.S.
Letters of Credit or U.K. Letters of Credit, the Federal Funds Rate,
(ii) in respect of Canadian Letters of Credit which are denominated in
Dollars, the Base Rate plus two percent (2%) and (iii) in respect of
Canadian Letters of Credit which are denominated in Canadian Dollars,
the Canadian Prime Rate plus two percent (2%). To the extent that it is
ultimately determined that the applicable Borrower is relieved of its
obligation to reimburse the applicable Issuer because of such Issuer's
gross negligence or willful misconduct in determining that documents
received under any applicable Letter of Credit comply with the terms
thereof, the applicable Issuer shall be obligated to refund to the
paying Lenders all amounts paid to such Issuer to reimburse Issuer for
the applicable drawing under such Letter of Credit, together with
interest from the date of payment by such Lender to the date of
repayment by the Issuing Bank at the interest rates set forth above
applicable to such Lenders.
(iv) U.S. Borrower, the Canadian Borrower or U.K. Borrower, as the
case may be, shall be irrevocably and unconditionally obligated
forthwith to reimburse the appropriate Agent, on the date on which such
Agent notifies U.S. Borrower, the Canadian Borrower or U.K. Borrower, as
the case may be, of the date and amount of any payment by the applicable
Issuer of any drawing or payment made under a Letter of Credit, for the
amount paid by such Issuer upon such drawing or payment, without
presentment, demand, protest or other formalities of any kind, all of
which are hereby waived. Such reimbursement may, subject to satisfaction
of the conditions in Sections 5.1 and 5.2 hereof, the limitations on
size contained in Section 2.1 and to the Maximum U.S. Available Amount,
Maximum Canadian Available Amount or Maximum U.K. Available Amount, as
the case may be (after adjustment in the same to reflect the elimination
of the corresponding Letter of Credit Liability), be made by the
borrowing of Loans or, in the case of the Canadian Borrower, by the
issuance, acceptance and purchase of Bankers' Acceptances. The
applicable Agent will pay to each Lender such Lender's Commitment
Percentage of all amounts received from U.S. Borrower, the Canadian
Borrower or the U.K. Borrower, as the case may be, for application in
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 the applicable Agent in respect of such Letter of Credit
pursuant to clause (iii) above. To the extent such applicable Agent does
not pay such Lender within the timeframes which are applicable to such
Lenders in clause (iii) above, such applicable Agent shall pay interest
to such Lenders at the interest rates set forth in clause (iii) above
applicable to such Lenders for such period of delay.
(v) U.S. Borrower, the Canadian Borrower or the U.K. Borrower, as
the case may be, will pay to the appropriate Agent at the Principal
Office of such Agent for the account of each applicable Lender a letter
of credit fee with respect to each Letter of Credit equal to the greater
of (x) $500 or (y) the Margin Percentage then in effect with respect to
LIBOR Borrowings multiplied by the daily average amount available for
drawings under each Letter of Credit (and computed on the basis of the
actual number of days elapsed in a year composed of 360 days), in each
case for the period from and including the date of issuance of such
Letter of Credit to and including the date of expiration or termination
thereof, such fee to be due and payable quarterly in arrears on each
three (3) month anniversary of the issuance of the applicable Letter of
Credit and upon expiration or termination of the applicable Letter of
Credit. The applicable Agent will pay to each applicable Lender,
promptly after receiving any payment in respect of letter of credit fees
referred to in this clause (v), an amount equal to the product of such
Lender's Commitment Percentage times the amount of such fees. In
addition to and cumulative of the above described fees, U.S. Borrower,
the Canadian Borrower or the U.K. Borrower, as the case may be, shall
pay to the appropriate Agent, for the account of the applicable Issuer,
in advance on the date of the issuance of the applicable Letter of
Credit, a fronting fee in an amount equal to the greater of (x) $500 or
(y) 1/8% of the face amount of the applicable Letter of Credit (such
fronting fee to be retained by the applicable Issuer for its own
account).
(vi) The issuance by the applicable Issuer of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section 5
hereof, be subject to the conditions precedent (A) that such Letter of
Credit shall be in such form and contain such terms as shall be
reasonably satisfactory to applicable Agent, and (B) that U.S. Borrower,
the Canadian Borrower or the U.K. Borrower, as the case may be, shall
have executed and delivered such Applications and other instruments and
agreements relating to such Letter of Credit as the applicable Agent
shall have reasonably requested and are not inconsistent with the terms
of this Agreement. In the event of a conflict between the terms of this
Agreement and the terms of any Application, the terms hereof shall
control.
(vii) Each Issuer will send to U.S. Borrower, the Canadian Borrower
or the U.K. Borrower, as the case may be, and each applicable Lender,
immediately upon issuance of any Letter of Credit issued by such Issuer
or any amendment thereto, a true and correct copy of such Letter of
Credit or amendment.
(c) Indemnification; Release. U.S. Borrower, the Canadian Borrower or
the U.K. Borrower, as the case may be, hereby indemnifies and holds harmless
each Agent, each Lender and each Issuer from and against any and all claims,
damages, losses, liabilities, costs or expenses which such Agent, such Lender or
such Issuer may incur (or which may be claimed against such Agent, such Lender
or such Issuer by any Person whatsoever), REGARDLESS OF WHETHER CAUSED IN WHOLE
OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, in connection
with the execution and delivery of any Letter of Credit or transfer of or
payment or failure to pay under any Letter of Credit; provided that U.S.
Borrower, the Canadian Borrower or the U.K. Borrower, as the case may be, shall
not be required to indemnify or hold harmless any party seeking indemnification
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (i)
the willful misconduct or gross negligence of the party seeking
indemnification or exoneration, or (ii) the failure by the party seeking
indemnification to pay under any Letter of Credit after the presentation to it
of a request required to be paid under applicable law. U.S. Borrower, the
Canadian Borrower or the U.K. Borrower, as the case may be, hereby releases,
waives and discharges each Agent, each Lender and each Issuer from any claims,
causes of action, damages, losses, liabilities, reasonable costs or expenses
which may now exist or may hereafter arise, REGARDLESS OF WHETHER CAUSED IN
WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason
of or in connection with the failure of any Agent, any Issuer or any other
Lender to fulfill or comply with its obligations to such Agent, such Lender or
such Issuer, as the case may be, hereunder (but nothing herein contained shall
affect any rights U.S. Borrower, the Canadian Borrower or the U.K. Borrower, as
the case may be, may have against such defaulting party or may have in respect
of gross negligence or willful misconduct). Nothing in this Section 2.2(c) is
intended to limit the obligations of U.S. Borrower, the Canadian Borrower or the
U.K. Borrower, as the case may be, under any other provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. Subject to
Sections 11.7 and 11.17 hereof, if as a result of any Regulatory Change there
shall be imposed, modified or deemed applicable any tax (other than any tax
based on or measured by net income), reserve, special deposit or similar
requirement against or with respect to or measured by reference to Letters of
Credit issued or to be issued hereunder or participations in such Letters of
Credit, and the result shall be to increase the cost to any Lender of issuing or
maintaining any Letter of Credit or any participation therein, or materially
reduce any amount receivable by any Lender hereunder in respect of any Letter of
Credit or any participation therein (which increase in cost, or reduction in
amount receivable, shall be the result of such Lender's reasonable allocation of
the aggregate of such increases or reductions resulting from such event), then
such Lender shall notify U.S. Borrower, the Canadian Borrower or the U.K.
Borrower, as the case may be, through the appropriate Agent (which notice shall
be accompanied by a statement setting forth in reasonable detail the basis for
the determination of the amount due), and within 15 Business Days after demand
therefor by such Lender through such Agent, U.S. Borrower, the Canadian Borrower
or the U.K. Borrower, as the case may be, shall pay to such Lender, from time to
time as specified by such Lender, such additional amounts as shall be sufficient
to compensate such Lender for such increased costs or reductions in amount. Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to U.S. Borrower, the Canadian Borrower or the
U.K. Borrower, as the case may be, shall be conclusive as to the amount thereof,
absent manifest error, and may be computed using any reasonable averaging and
attribution method. Each Lender will notify U.S. Borrower, the Canadian Borrower
or the U.K. Borrower, as the case may be, through the appropriate Agent of any
event occurring after the date of this Agreement which will entitle such Lender
to compensation pursuant to this Section 2.2(d) as promptly as practicable after
any executive officer of such Lender obtains knowledge thereof and determines to
request such compensation, and (if so requested by U.S. Borrower, the Canadian
Borrower or the U.K. Borrower, as the case may be, through the appropriate
Agent) will designate a different lending office of such Lender for the issuance
or maintenance of Letters of Credit by such Lender or will take such other
action as U.S. Borrower, the Canadian Borrower or the U.K. Borrower, as the case
may be, may reasonably request if such designation or action is consistent with
the internal policy of such Lender and legal and regulatory restrictions, can be
undertaken at no additional cost, will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender (provided that no such U.S. Lender
shall have any obligation so to designate a different lending office which is
not located in the United States of America, no such Canadian Lender shall have
any obligation so to designate a different lending office which is not located
in Canada and no such U.K. Lender shall have any obligation so to designate a
different lending office which is not located in the United Kingdom).
2.3 Certain Provisions Relating to Bankers' Acceptances.
(a) Subject to the terms and conditions hereof, each Canadian Lender
severally agrees to accept and purchase Bankers' Acceptances drawn upon it by
the Canadian Borrower denominated in Canadian Dollars. The Canadian Borrower
shall notify the Canadian Agent by irrevocable written notice (each a "Bankers'
Acceptance Notice") by 12:00 noon (Toronto, Ontario time) two (2) Business Days
prior to the proposed date of any borrowing by way of Bankers' Acceptances. Each
borrowing by way of Bankers' Acceptances shall be in a minimum aggregate face
amount of C$1,000,000.00 and integral multiples of C$100,000.00 in excess
thereof. The face amount of each Bankers' Acceptance shall be C$100,000.00 or
any integral multiple thereof. Each Bankers' Acceptance Notice shall be in the
form of Exhibit G.
(1) Bankers' Acceptances shall be issued and shall mature on a
Business Day. Each Bankers' Acceptance shall have a term of
approximately 1, 2 or 3 months or, if available, 6 months excluding days
of grace and shall mature on a Business Day on or before the Revolving
Loan Maturity Date and shall be in form and substance reasonably
satisfactory to each Canadian Lender.
(2) Subject to Section 2.3(a)(3), Bankers' Acceptances shall be
signed by duly authorized officers of the Canadian Borrower or, in the
alternative, the signatures of such officers may be mechanically
reproduced in facsimile thereon and Bankers' Acceptances bearing such
facsimile signatures shall be binding on the Canadian Borrower as if
they had been manually executed and delivered by such officers on behalf
of the Canadian Borrower; notwithstanding that any person whose manual
or facsimile signature appears on any Bankers' Acceptance may no longer
be an authorized signatory for the Canadian Borrower on the date of
issuance of a Bankers' Acceptance, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained
in force at the time of such issuance and any such Bankers' Acceptance
shall be binding on the Canadian Borrower;
(3) In lieu of the Canadian Borrower signing Bankers' Acceptances
in accordance with Section 2.3(a)(2) and, for so long as the power of
attorney in Section 2.3(a)(5) is in force with respect to a given
Canadian Lender, such Canadian Lender shall execute and deliver Bankers'
Acceptances on behalf of the Canadian Borrower in accordance with the
provisions thereof and, for certainty, all references herein to drafts
drawn by the Canadian Borrower, Bankers' Acceptances executed by the
Canadian Borrower or similar expressions shall be deemed to include
Bankers' Acceptances executed in accordance with a power of attorney,
unless the context otherwise requires;
(4) If and for so long as the power of attorney referred to in
Section 2.3(a)(5) is in force with respect to each of the Canadian
Lenders, it is intended that pursuant to the DBNA, all Bankers'
Acceptances accepted by the Canadian Lenders under this Agreement will
be issued in the form of a "depository xxxx" (as defined in the DBNA),
deposited with a "clearing house" (as defined in the DBNA including The
Canadian Depository for Securities Ltd. or its nominee CDS & Co.). In
order to give effect to the foregoing, the Canadian Agent will, subject
to the approval of the Canadian Borrower and the Canadian Lenders,
establish and notify the Canadian Borrower and the Canadian Lenders of
any additional procedures, consistent with the terms of this Agreement
and the DBNA, as are reasonably necessary to accomplish such intention,
including:
(i) any instrument held by the Canadian Lenders for the purposes
of Bankers' Acceptances will have marked prominently and
legibly on its face and within its text, at or before the time
of issue, the words "This is a depository xxxx subject to the
Depository Bills and Notes Act (Canada)";
(ii) any reference to the authentication of the Bankers' Acceptance
will be removed; and
(iii) any reference to the "bearer" will be removed and such
Bankers' Acceptances will not be marked with any words
prohibiting negotiation, transfer or assignment of it or of an
interest in it.
(5) To facilitate the issuance and acceptance of Bankers'
Acceptances under this Agreement, the Canadian Borrower hereby appoints
each Canadian Lender, acting by any authorized signatory of such Lender,
as its attorney to:
(i) to sign for and on behalf and in the name of the Canadian
Borrower as drawer, drafts in such Canadian Lender's standard
form which are depository bills as defined in the DBNA,
payable to a "clearing house" (as defined in the DBNA)
including, without limitation, The Canadian Depository For
Securities Limited or its nominee, CDS & Co. (the "clearing
house");
(ii) for drafts which are not depository bills, to sign for and on
behalf and in the name of the Canadian Borrower as drawer and
to endorse on its behalf, Bankers' Acceptances drawn on the
Canadian Lender payable to the order of the undersigned or
payable to the order of such Canadian Lender;
(iii) to fill in the amount, date and maturity date of such
Bankers' Acceptances; and
(iv) to deposit and/or deliver such Bankers' Acceptances which have
been accepted by such Canadian Lender,
provided that such acts in each case are to be undertaken by the
Canadian Lender in question strictly in accordance with instructions
given to such Canadian Lender by the Canadian Borrower as provided in
this Section. For certainty, signatures of any
authorized signatory of a Canadian Lender may be mechanically
reproduced in facsimile on Bankers' Acceptances in accordance herewith
and such facsimile signatures shall be binding and effective as if they
had been manually executed by such authorized signatory of such Canadian
Lender. The communication in writing by the Canadian Borrower, or on
behalf of the Canadian Borrower by the Canadian Agent, to the Canadian
Lender of the instructions set out in the Bankers' Acceptance Notice
shall constitute (a) the authorization and instruction of the Canadian
Borrower to the Canadian Lender to sign for and on behalf and in the
name of the Canadian Borrower as drawer the requested Bankers'
Acceptances and to complete and/or endorse Bankers' Acceptances in
accordance with such information as set out above and (b) the request of
the Canadian Borrower to the Canadian Lender to accept such Bankers'
Acceptances and deposit the same with the clearing house or deliver the
same, as the case may be, in each case in accordance with this Agreement
and such instructions. The Canadian Borrower acknowledges that a
Canadian Lender shall not be obligated to accept any such Bankers'
Acceptances except in accordance with the provisions of this Agreement.
A Canadian Lender shall be and it is hereby authorized to act on behalf
of the Canadian Borrower upon and in compliance with instructions
communicated to that Canadian Lender as provided herein if the Canadian
Lender reasonably believes such instructions to be genuine. If a
Canadian Lender accepts Bankers' Acceptances pursuant to any such
instructions, that Canadian Lender shall confirm particulars of such
instructions and advise the Canadian Agent that it has complied
therewith by notice in writing addressed to the Canadian Agent and
served personally or sent by telecopier in accordance with the
provisions hereof. A Canadian Lender's actions in compliance with such
instructions, confirmed and advised to the Canadian Agent by such
notice, shall be conclusively deemed to have been in accordance with the
instructions of the Canadian Borrower. This power of attorney may be
revoked by the Canadian Borrower with respect to any particular Canadian
Lender at any time upon not less than 5 Banking Days' prior written
notice served upon the Canadian Lender in question and the Canadian
Agent, provided that no such revocation shall reduce, limit or otherwise
affect the obligations of the Canadian Borrower in respect of any
Bankers' Acceptance executed, completed, endorsed, deposited and/or
delivered in accordance herewith prior to the time at which such
revocation becomes effective.
(6) If the power of attorney in Section 2.3(a)(5) is revoked with
respect to any Canadian Lender, the Canadian Borrower shall, from time
to time as required by the applicable Canadian Lenders, provide to the
Canadian Agent for delivery to each such Canadian Lender drafts drawn in
blank by the Canadian Borrower (pre-endorsed and otherwise in fully
negotiable form, if applicable) in quantities sufficient for each such
Canadian Lender to fulfil its obligations hereunder. Any such pre-signed
drafts which are delivered by the Canadian Borrower to the Canadian
Agent or a Canadian Lender shall be held in safekeeping by the Canadian
Agent or such Canadian Lender, as the case may be, with the same degree
of care as if they were the Canadian Agent's or such Canadian Lender's
property, and shall only be dealt with by the Canadian Lenders and the
Canadian Agent in accordance herewith. No Canadian Lender shall be
responsible or liable for its failure to make its share of any Bankers'
Acceptances required hereunder if the cause of such failure is, in whole
or in part, due to the failure of the Canadian Borrower to provide
such pre-signed drafts to the Canadian Agent (for delivery to such
Canadian Lender) on a timely basis.
(7) Promptly following receipt of a Bankers' Acceptance Notice,
the Canadian Agent shall so advise the Canadian Lenders and shall advise
each Canadian Lender of the face amount of each Bankers' Acceptance to
be accepted by it and the term thereof. The aggregate face amount of
Bankers' Acceptances to be accepted by a Canadian Lender shall be
determined by the Canadian Agent by reference to the respective Canadian
Commitments of the Canadian Lenders, except that, if the face amount of
a Bankers' Acceptance, which would otherwise be accepted by a Canadian
Lender, would not be C$100,000.00 or an integral multiple thereof, such
face amount shall be increased or reduced by the Canadian Agent in its
sole and unfettered discretion to the nearest integral multiple of
C$100,000.00.
(8) Each Bankers' Acceptance to be accepted by a Canadian Lender
shall be accepted at such Canadian Lender's office shown on the
signature pages hereof or as otherwise designated by such Canadian
Lender from time to time.
(9) On the relevant borrowing date, each Canadian Lender severally
agrees to purchase from the Canadian Borrower, at the face amount
thereof discounted by the Applicable BA Discount Rate, any Bankers'
Acceptance accepted by it and provide to the Canadian Agent, for the
account of the Canadian Borrower, the BA Discount Proceeds in respect
thereof after deducting therefrom the amount of the Acceptance Fee
payable by the Canadian Borrower to such Canadian Lender under Section
2.3(c) in respect of such Bankers' Acceptance.
(10) Each Canadian Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all Bankers'
Acceptances accepted and purchased by it.
(11) The Canadian Borrower waives presentment for payment and any
other defense to payment of any amounts due to a Canadian Lender in
respect of a Bankers' Acceptance accepted by it pursuant to this
Agreement which might exist solely by reason of such Bankers' Acceptance
being held, at the maturity thereof, by such Canadian Lender in its own
right and the Canadian Borrower agrees not to claim any days of grace if
such Canadian Lender as holder sues the Canadian Borrower on the
Bankers' Acceptances for payment of the amount payable by the Canadian
Borrower thereunder.
(b) With respect to each Bankers' Acceptance, the Canadian Borrower,
prior to the occurrence and continuation of a Default, may give irrevocable
telephone or written notice (or such other method of notification as may be
agreed upon between the Canadian Agent and the Canadian Borrower) to the
Canadian Agent at or before 12:00 noon (Toronto, Ontario time) two (2) Business
Days prior to the maturity date of such Bankers' Acceptance followed by written
confirmation electronically transmitted to the Canadian Agent on the same day,
of the Canadian Borrower's intention to issue one or more Bankers' Acceptance on
such maturity date (each a "Refunding Bankers' Acceptance") to provide for the
payment of such maturing Bankers' Acceptance (it being understood that payments
by the
Canadian Borrower and fundings by the Canadian Lenders in respect of each
maturing Bankers' Acceptance and each related Refunding Bankers' Acceptance
shall be made on a net basis reflecting the difference between the face amount
of such maturing Bankers' Acceptance and the BA Discount Proceeds (net of the
applicable Acceptance Fee) of such Refunding Bankers' Acceptance). Any funding
on account of any maturing Bankers' Acceptance must be made at or before 12:00
noon (Toronto, Ontario time) on the maturity date of such Bankers' Acceptance.
If the Canadian Borrower fails to give such notice and does not otherwise pay to
the Canadian Agent all Bankers' Acceptance Liabilities on the maturity date of
any such Bankers' Acceptance, then subject to satisfaction of the conditions in
Section 5 hereof and to the Maximum Canadian Available Amount, the Canadian
Borrower shall be irrevocably deemed to have requested and to have been advanced
a Canadian Prime Loan in the face amount of such maturing Bankers' Acceptance on
the maturity date of such Bankers' Acceptance from the Canadian Lender which
accepted such maturing Bankers' Acceptance, which Canadian Prime Loan shall
thereafter bear interest as such in accordance with the provisions hereof until
paid in full.
(c) An Acceptance Fee shall be payable by the Canadian Borrower to each
Canadian Lender in advance (in the manner specified in Section 2.3(a)(6)) in
respect of, and as a condition precedent to the acceptance by such Canadian
Lender of, a Bankers' Acceptance to be accepted by such Canadian Lender
calculated at the rate per annum equal to the Margin Percentage applicable to
LIBOR Borrowings, calculated on the face amount of such Bankers' Acceptance and
computed on the basis of the number of days in the term of such Bankers'
Acceptance and a year of 365 days.
2.4 Terminations, Reductions or Reallocations of Commitments.
(a) Mandatory. On the Termination Date, all U.S. Commitments, Canadian
Commitments and U.K. Commitments shall be terminated in their entirety.
(b) Optional Termination or Reduction. U.S. Borrower, Canadian Borrower
or U.K. Borrower, as the case may be, shall have the right to terminate or
reduce the unused portion of the U.S. Commitments, the Canadian Commitments or
the U.K. Commitments, as the case may be, at any time or from time to time,
provided that (i) U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case
may be, shall give notice of each such termination or reduction to the
appropriate Agent as provided in Section 4.3 hereof and (ii) each such partial
reduction shall be in an integral multiple of $2,000,000. Notwithstanding the
foregoing, U.S. Borrower may not reduce the U.S. Commitments below the then
outstanding principal balance of the U.S. Revolving Loan Obligations, Canadian
Borrower may not reduce the Canadian Commitments below the then outstanding
principal balance of the Canadian Obligations and U.K. Borrower may not reduce
the U.K. Commitments below the then outstanding principal balance of the U.K.
Obligations. No termination or reduction of the Commitments pursuant to this
provision may be reinstated without the prior written approval of Agents and the
Lenders.
(c) Optional Increase. At any time after September 1, 2004 and so long
as no Default or Event of Default shall have occurred which is continuing, U.S.
Borrower shall have the right to increase the U.S. Commitments by an amount not
exceeding $20,000,000, in the aggregate, provided that (i) the U.S. Borrower
shall give notice of each such increase to the U.S. Agent as provided in Section
4.3 hereof, (ii) no Lender shall be required to increase its U.S. Commitment
unless it shall have expressly agreed to such increase in writing (but
otherwise, no notice to or consent by any Lender shall be required,
notwithstanding anything to the contrary set forth in Section 11.5 hereof),
(iii) the addition of new U.S. Lenders shall be subject to the terms and
provisions of Section 11.6 hereof as if such new U.S. Lenders were acquiring an
interest in the U.S. Loans by assignment from an existing U.S. Lenders (to the
extent applicable, i.e. required approvals, minimum amounts, execution of new
U.S. Revolving Notes and the like), (iv) the U.S. Borrower shall execute and
deliver such additional or replacement U.S. Revolving Notes and such other
documentation (including evidence of proper authorization) as may be reasonably
requested by the U.S. Agent, any new U.S. Lenders or any U.S. Lenders which is
increasing its Commitment and (v) each such increase shall be in an aggregate
amount of at least $5,000,000. If the U.S. Borrower shall terminate or reduce
the U.S. Commitments pursuant to Section 2.4(b) hereof, it shall have no further
right to increase the U.S. Commitments pursuant to this Section. U.S. Borrower
shall be required to pay (or to reimburse each applicable U.S. Lender for) any
breakage costs incurred by any U.S. Lender in connection with the need to
reallocate existing U.S. Loans among the U.S. Lenders following any increase in
the U.S. Commitments pursuant to this provision.
(d) Reallocations. Subject to agreement by the Borrowers, any Dual
Lender may reallocate its existing U.S. Commitment and Canadian Commitment or
U.K. Commitment, as the case may be, so long as the sum of such U.S. Commitment
and Canadian Commitment or U.K. Commitment, as the case may be, remains
unchanged. In addition, with the prior written consent of all of the Dual
Lenders, any U.S. Lender may agree with Borrowers to convert a portion of its
U.S. Commitment into a Canadian Commitment or a U.K. Commitment, thereby
becoming a Dual Lender, any Canadian Lender may agree with Borrowers to convert
a portion of its Canadian Commitment into a U.S. Commitment and any U.K. Lender
may agree with Borrowers to convert a portion of its U.K Commitment into a U.S.
Commitment, in each case so long as (i) each Lender continues to be a U.S.
Lender with a U.S. Commitment of at least $1,000,000 and (ii) the sum of such
Lender's U.S. Commitment and Canadian Commitment or U.K. Commitment, as the case
may be, remains equal to the aggregate amount of such Lender's U.S. Commitment
and Canadian Commitment or U.K. Commitment, as the case may be, prior to such
reallocation. Borrowers shall give written notice to the Agents of any
reallocation pursuant to this provision at least ten (10) Business Days prior to
the effective date of any such reallocation. No Lender shall be required to
agree to any such reallocation, but may do so at its option, in its sole
discretion. The following conditions precedent must be satisfied prior to any
such reallocation becoming effective:
(1) no Default or Event of Default shall have occurred and be
continuing;
(2) if, as a result of any such reallocation, the aggregate U.S.
Revolving Loan Obligations would exceed the aggregate of all of the U.S.
Commitments, then the U.S. Borrower shall, on the effective date of such
reallocation, repay or prepay U.S. Revolving Loans (or provide Cover for
Letter of Credit Liabilities relating to U.S. Letters of Credit) in
accordance with this Agreement in an aggregate principal amount such
that, after giving effect thereto, the aggregate U.S. Revolving Loan
Obligations shall not exceed the aggregate of all of the U.S.
Commitments;
(3) if, as a result of any such reallocation, the Canadian
Obligations would exceed the aggregate of all of the Canadian
Commitments, then the Canadian Borrower shall, on the effective date of
such reallocation, repay or prepay Canadian Revolving Loans (or provide
Cover for Letter of Credit Liabilities relating to Canadian Letters of
Credit or for Bankers' Acceptance Liabilities) in accordance with this
Agreement in an aggregate principal amount such that, after giving
effect thereto, the Canadian Obligations shall not exceed the aggregate
of all of the Canadian Commitments;
(4) if, as a result of any such reallocation, the U.K. Obligations
would exceed the aggregate of all of the U.K. Commitments, then the U.K.
Borrower shall, on the effective date of such reallocation, repay or
prepay U.K. Revolving Loans (or provide Cover for Letter of Credit
Liabilities relating to U.K. Letters of Credit) in accordance with this
Agreement in an aggregate principal amount such that, after giving
effect thereto, the U.K. Obligations shall not exceed the aggregate of
all of the U.K. Commitments;
(5) Borrowers shall have paid any amounts (or shall have provided
Cover) due under Sections 2.9(c) or (d) hereof on the date of
such reallocation;
(6) the Maximum Canadian Available Amount shall be adjusted to
equal the sum of all of the Canadian Commitments after giving effect to
such reallocation, the Maximum U.K. Available Amount shall be adjusted
to equal the sum of all of the U.K. Commitments after giving effect to
such reallocation and the Maximum U.S. Available Amount shall be
adjusted to equal the sum of all of the U.S. Commitments after giving
effect to such reallocation;
(7) participations by the Lenders in the outstanding Letters of
Credit and the Letter of Credit Liabilities and the outstanding Loans of
the Lenders shall be adjusted to give effect to such reallocation;
provided, however, that in lieu of requiring any prepayment of any
Bankers' Acceptances in order to make appropriate adjustments to give
effect to such reallocations, Canadian Borrower shall be required to
provide additional Cover for any applicable portion of the Bankers'
Acceptance Liabilities;
(8) each Lender whose U.S. Commitment, Canadian Commitment or U.K.
Commitment shall be the subject of any reallocation shall have received
from the Borrowers a fee equal to the greater of $3,000.00 or 1/16% of
the amount of the increase or decrease, as the case be, in its Canadian
Commitment or U.K. Commitment, as the case may be.
2.5 Commitment Fees.
(a) U.S. Borrower shall pay to U.S. Agent for the account of each U.S.
Lender, Canadian Borrower shall pay to Canadian Agent for the account of each
Canadian Lender and U.K. Borrower shall pay to U.K. Agent for the account of
each U.K. Lender, commitment fees for the Availability Period at a rate per
annum equal to the Commitment Fee Percentage. Such commitment fees shall be
computed (on the basis of the actual number of days elapsed in a year composed
of 360 days) on each day and shall be based on the excess of (x) the aggregate
amount
of each Lender's U.S. Commitment, Canadian Commitment or U.K. Commitment,
as the case may be, for such day over (y) the sum of (i) the aggregate unpaid
principal balance (in Dollars) of such Lender's applicable Note or Notes on such
day plus (ii) the aggregate applicable Letter of Credit Liabilities as to such
Lender for such day plus, in the case of Canadian Lenders only, (iii) the
aggregate Bankers' Acceptance Liabilities outstanding on such day. Accrued
commitment fees shall be payable in arrears on the Quarterly Dates prior to the
Termination Date and on the Termination Date, with any Canadian Obligations
converted to Dollars at the Exchange Rate on each such date for the purposes of
each such calculation.
(b) All past due fees payable under this Section shall bear interest at
the Past Due Rate.
2.6 Several Obligations. The failure of any Lender to make any Loan to
be made by it or to accept and purchase any Bankers' Acceptance required to be
so accepted and purchased by it on the date specified therefor shall not relieve
any other Lender of its obligation to make its Loan or to accept and purchase
its Bankers' Acceptance on such date, but neither any Agent nor any Lender shall
be responsible or liable for the failure of any other Lender to make a Loan or
to accept and purchase any Bankers' Acceptance or to participate in, or
co-issue, any Letter of Credit. Notwithstanding anything contained herein to the
contrary, (i) if a U.S. Lender fails to make a U.S. Revolving Loan as and when
required hereunder, then upon each subsequent event which would otherwise result
in payments of principal being made to the defaulting U.S. Lender, the amount
which would have been paid to the defaulting U.S. Lender shall be divided among
the non-defaulting U.S. Lenders ratably according to their respective Commitment
Percentages until the Obligations of each U.S. Lender (including the defaulting
U.S. Lender) are equal to such U.S. Lender's Commitment Percentage of the total
U.S. Revolving Loan Obligations, (ii) if a Canadian Lender fails to make a
Canadian Revolving Loan or accept and purchase any Bankers' Acceptance as and
when required hereunder, then upon each subsequent event which would otherwise
result in payments of principal being made to the defaulting Canadian Lender,
the amount which would have been paid to the defaulting Canadian Lender shall be
divided among the non-defaulting Canadian Lenders ratably according to their
respective Commitment Percentages until the Obligations of each Canadian Lender
(including the defaulting Canadian Lender) are equal to such Canadian Lender's
Commitment Percentage of the total Canadian Obligations and (iii) if a U.K.
Lender fails to make a U.K. Revolving Loan as and when required hereunder, then
upon each subsequent event which would otherwise result in payments of principal
being made to the defaulting U.K. Lender, the amount which would have been paid
to the defaulting U.K. Lender shall be divided among the non-defaulting U.K.
Lenders ratably according to their respective Commitment Percentages until the
Obligations of each U.K. Lender (including the defaulting U.K. Lender) are equal
to such U.K. Lender's Commitment Percentage of the total U.K. Obligations.
2.7 Notes. The U.S. Revolving Loans made by each U.S. Lender shall be
evidenced by a single U.S. Revolving Note of U.S. Borrower in substantially the
form of Exhibit D hereto payable to the order of such U.S. Lender in a principal
amount equal to the U.S. Commitment of such U.S. Lender, and otherwise duly
completed. The Canadian Revolving Loans made by each Canadian Lender which are
denominated in Dollars shall be evidenced by a single Canadian Revolving Note of
Canadian Borrower in substantially the form of Exhibit C hereto payable to the
order of such Canadian Lender in a principal amount equal to the Canadian
Commitment of such Canadian Lender, and otherwise duly completed. The Canadian
Prime Loans made by each Canadian Lender shall be evidenced by a single Canadian
Dollar Revolving Note of Canadian Borrower in substantially the form of Exhibit
H hereto payable to the order of such Canadian Lender in a principal amount
equal to two times the Canadian Commitment of
such Canadian Lender, and otherwise duly completed. The U.K. Revolving
Loans made by each U.K. Lender shall be evidenced by a single U.K. Revolving
Note of U.K. Borrower in substantially the form of Exhibit K hereto payable to
the order of such U.K. Lender in a principal amount equal to the U.K. Commitment
of such U.K. Lender, and otherwise duly completed. The Term Loans made by each
Lender shall be evidenced by a single Term Note of U.S. Borrower in
substantially the form of Exhibit J hereto payable to the order of such Lender
in a principal amount equal to the sum of the outstanding principal balance of
the Term Loans made by such Lender, and otherwise duly completed. The promissory
notes described in this Section are each, together with all renewals,
extensions, modifications and replacements thereof and substitutions therefor,
called a "Note" and collectively called the "Notes". Each Lender is hereby
authorized by each Borrower to endorse on the schedule (or a continuation
thereof) that may be attached to each Note of such Lender, to the extent
applicable, the date, amount, type of and the applicable period of interest for
each Loan made by such Lender to the applicable Borrower hereunder, and the
amount of each payment or prepayment of principal of such Loan received by such
Lender, provided, that any failure by such Lender to make any such endorsement
shall not affect the obligations of any Borrower under such Note or hereunder in
respect of such Loan.
2.8 Use of Proceeds. The proceeds of the Loans, of the Letters of
Credit and of the acceptance and purchase of Bankers' Acceptances shall be used
by the Borrowers to refinance existing Borrowed Money Indebtedness of the
Borrowers and for acquisitions and for other working capital and general
corporate purposes. Neither any Agent nor any Lender shall have any
responsibility as to the use of any proceeds of the Loans or of the acceptance
and purchase of Bankers' Acceptances.
2.9 Currency Fluctuations.
(a) Not later than 1:00 p.m. (Houston, Texas time) on each Calculation
Date, the U.S. Agent shall determine the Exchange Rate applicable to Canadian
Dollars as of such Calculation Date. For purposes of this Section and Section
3.2(b)(4) hereof, the Exchange Rate so determined shall become effective on the
first Business Day immediately following the relevant Calculation Date (a "Reset
Date").
(b) Not later than 4:00 p.m. (Houston, Texas time) on each Reset Date,
the U.S. Agent shall consult with the Canadian Agent and the Agents shall
determine the aggregate Canadian Obligations, the aggregate U.S. Revolving Loan
Obligations and the aggregate U.K. Obligations.
(c) If, on any Reset Date or on the date of any reallocation of the
U.S. Commitments, the Canadian Commitments and the U.K. Commitments pursuant to
Section 2.4(c) hereof, the sum of the aggregate U.S. Revolving Loan Obligations,
the U.K. Obligations and the Canadian Obligations exceeds the aggregate of all
of the U.S. Commitments, the Canadian Commitments and the U.K. Commitments, then
(i) the Agents shall give notice thereof to the Lenders and Borrowers and (ii)
the Borrowers shall within two (2) Business Days thereafter, repay or prepay
Loans (or provide Cover for Letter of Credit Liabilities or Bankers' Acceptance
Liabilities) in accordance with this Agreement in an aggregate principal amount
sufficient to reduce the sum of the aggregate U.S. Revolving Loan Obligations,
the U.K. Obligations and the Canadian Obligations to the aggregate of all of the
U.S. Commitments, the Canadian Commitments and the U.K. Commitments.
(d) If, on any day prior to the Termination Date, the Canadian
Obligations exceed the aggregate of all of the Canadian Commitments, then (i)
the Canadian Agent shall give notice thereof to the Canadian Borrower and the
Canadian Lenders and (ii) within two (2) Business Days thereafter, the Canadian
Borrower shall repay or prepay Canadian Revolving Loans (or provide Cover for
Letter of Credit Liabilities relating to Canadian Letters of Credit or Bankers'
Acceptance Liabilities) in accordance with this Agreement in an aggregate
principal amount such that, after giving effect thereto, the Canadian
Obligations shall not exceed the aggregate of all of the Canadian Commitments.
3. Borrowings, Prepayments and Interest Options.
3.1 Borrowings. The applicable Borrower shall give the applicable Agent
notice of each borrowing to be made hereunder as provided in Section 4.3 hereof
and the applicable Agent shall promptly notify each applicable Lender of such
request. Not later than 2:00 p.m. Houston, Texas time (in the case of U.S.
Revolving Loans which are same day fundings), 11:00 a.m. Houston, Texas time (in
the case of U.S. Revolving Loans which are not same day fundings), 11:00 a.m.
Toronto, Ontario time (in the case of Canadian Revolving Loans which are not
same day fundings and Bankers' Acceptances), 1:00 p.m. Toronto, Ontario time (in
the case of Canadian Revolving Loans which are same day fundings), 11:00 a.m.
London, United Kingdom time (in the case of U.K. Revolving Loans which are not
same day fundings) or 1:00 p.m. London, United Kingdom time (in the case of U.K.
Revolving Loans which are same day fundings) on the date specified for each such
borrowing hereunder, each applicable Lender shall make available the amount of
the Loan, if any, to be made by it on such date and/or the proceeds of the
acceptance and purchase of any Bankers' Acceptances, if any, to be so accepted
and purchased by it on such date to the applicable Agent at its Principal
Office, in immediately available funds, for the account of the applicable
Borrower. Such amounts received by the applicable Agent will be held in an
account maintained by the applicable Borrower with the applicable Agent. The
amounts so received by the applicable Agent shall, subject to the terms and
conditions of this Agreement, be made available to the applicable Borrower by
wiring or otherwise transferring, in immediately available funds, such amount to
an account designated by the applicable Borrower and approved by the applicable
Agent.
3.2 Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3 hereof, each
Borrower shall have the right to prepay, on any Business Day, in whole or in
part, without the payment of any premium, penalty or fee, any of the Obligations
(other than Obligations relating to Bankers' Acceptances) at any time or from
time to time, provided that the applicable Borrower shall give the applicable
Agent notice of each such prepayment as provided in Section 4.3 hereof. Each
optional prepayment shall be in an amount equal to $1,000,000 (in respect of
Loans denominated in Dollars) or C$1,000,000 (in respect of Loans denominated in
Canadian Dollars) or an integral
multiple of $500,000 (in respect of Loans denominated in Dollars) or
C$500,000 (in respect of Loans denominated in Canadian Dollars) in excess
thereof. Bankers' Acceptances may not be prepaid. Such optional prepayments of
Term Loans shall be applied ratably (based on outstanding principal balances) to
all Term Notes and shall be applied to scheduled principal installments in
inverse order of their maturities.
(b) Mandatory Prepayments and Cover. Except, in each case, as provided
in Section 3.3 hereof,
(1) Insurance Proceeds and Condemnation Awards.
(i) Promptly following the receipt thereof by U.S.
Borrower or any of its Subsidiaries (other than a Borrower or
a Subsidiary of Canadian Borrower or U.K. Borrower which is a
Foreign Subsidiary), U.S. Borrower shall deposit or cause to
be deposited with U.S. Agent in an interest bearing account
(but without any obligation to maximize such interest) all of
the net cash proceeds of any payment or award in excess of
$1,000,000 made to any such Person under any policy of
Property insurance with respect to any Property owned by such
Person or pursuant to any condemnation award with respect to
any such Property; provided such amounts have not theretofore
been reasonably expended for the restoration or replacement of
the asset in respect of which such payment or award was made.
Such amounts shall be collaterally assigned to U.S. Agent as
security for the U.S. Obligations in a manner reasonably
acceptable to U.S. Agent. Upon delivery to U.S. Agent of
written certification by U.S. Borrower that the applicable
Obligor has reasonably expended amounts or committed in
writing to expend amounts for the restoration or replacement
of the asset in respect of which such payment or award was
made, specifying the amount expended or committed, so long as
no Default or Event of Default shall have occurred and be
continuing any such amount deposited with U.S. Agent shall be
released by U.S. Agent to U.S. Borrower; provided, however,
that, in the event that within 180 days of receipt of such
payment or award by U.S. Borrower, to the extent U.S. Borrower
shall not have actually spent or certified to U.S. Agent its
intention to expend a substantially equivalent amount for the
restoration or replacement of the asset in respect of which
such payment or award was made or to purchase other assets
that may be productively used in the business of the U.S.
Borrower or the applicable Subsidiary, U.S. Borrower shall
make a prepayment on the Term Loans (using any funds deposited
with U.S. Agent pursuant to this Section 3.2(b)(1) or other
funds) in the amount of the excess of the amount of such
payment or award over the amount of such expenditures and/or
commitment on such 180th day. Such prepayment shall be applied
to the Term Notes secured by the applicable Collateral and
shall be applied to scheduled principal installments in
inverse order of their maturities.
(ii) In cases where the amount of the net cash proceeds
of any payment or award is equal to or less than $1,000,000
and no Default or Event of Default has occurred and is
continuing, such proceeds may be paid to any Obligor, and if
received by U.S. Agent shall be paid by U.S. Agent to U.S.
Borrower, for use in
paying for replacements or repairs of or substitutes for the
damaged, destroyed or taken assets or in a manner otherwise
consistent with this Agreement.
(2) Excess Cash Flow. Within fifteen (15) Business Days after the
delivery of the Annual Financial Statements pursuant to Section 7.2
hereof with respect to the fiscal year of U.S. Borrower (commencing with
the fiscal year ending on December 31, 2004), U.S. Borrower shall make a
prepayment on the Term Loans in an amount equal to fifty percent (50%)
of Excess Cash Flow for such fiscal year less (ii) optional prepayments
made on the Term Loans during such fiscal year. Such prepayment shall be
applied ratably to the Term Notes (based on outstanding principal
balances) and shall be applied to scheduled principal installments in
inverse order of their maturities. Notwithstanding the foregoing, the
obligations to make payments under this Section 3.2(b)(2) shall cease at
such time as the Funded Debt to EBITDA Ratio shall have been less than
1.25 to 1.00 for two (2) consecutive fiscal quarters.
(3) U.S. Borrowing Base. U.S. Borrower shall from time to time on
demand by U.S. Agent prepay the U.S. Revolving Loans (or provide Cover
for Letter of Credit Liabilities relating to U.S. Letters of Credit) in
such amounts as shall be necessary so that at all times the aggregate
outstanding amount of all U.S. Revolving Loan Obligations shall be less
than or equal to the Maximum U.S. Available Amount.
(4) Canadian Borrowing Base. Canadian Borrower shall from time to
time on demand by Canadian Agent prepay the Canadian Revolving Loans (or
provide Cover for Letter of Credit Liabilities relating to Canadian
Letters of Credit) in such amounts as shall be necessary so that at all
times the aggregate outstanding amount of all Canadian Obligations shall
be less than or equal to the Maximum Canadian Available Amount
(provided, however, that for purposes of this clause (4), the Exchange
Rate used for conversion of Canadian Dollars into Dollars shall be the
Exchange Rate as of the most recently occurring Calculation Date).
(5) U.K. Borrowing Base. U.K. Borrower shall from time to time on
demand by U.K. Agent prepay the U.K. Revolving Loans (or provide Cover
for Letter of Credit Liabilities relating to U.K. Letters of Credit) in
such amounts as shall be necessary so that at all times the aggregate
outstanding amount of all U.K. Obligations shall be less than or equal
to the Maximum U.K. Available Amount (provided, however, that for
purposes of this clause (5), the Exchange Rate used for conversion of
Pounds or Euros (as the case may be) into Dollars shall be the Exchange
Rate as of the most recently occurring Calculation Date).
(6) Sale of Certain Assets. An amount equal to the net proceeds in
excess of $2,000,000 (in any fiscal year) realized from the sale of
assets (other than real Property acquired after the date hereof and
other than the Covington, Louisiana plant of a Subsidiary of U.S.
Borrower which is held for sale as of the date hereof) outside of the
ordinary course of business by U.S. Borrower or any of its Subsidiaries
shall be applied as a prepayment on the Term Loans within forty-five
(45) days after the receipt of such proceeds by U.S. Borrower or its
applicable Subsidiary. An amount equal to the net proceeds in excess of
$3,000,000 (in any fiscal year) realized from the sale of real
Property acquired after the date hereof (other than the Covington,
Louisiana plant of a Subsidiary of U.S. Borrower which is held for sale
as of the date hereof) by U.S. Borrower or any of its Subsidiaries shall
be applied as a prepayment on the Term Loans within forty-five (45) days
after the receipt of such proceeds by U.S. Borrower or its applicable
Subsidiary. Each such prepayment shall be applied ratably to the Term
Notes (based on outstanding principal balances) and shall be applied to
scheduled principal installments in inverse order of their maturities.
(7) Equity Proceeds. An amount equal to one hundred percent (100%)
of the net proceeds realized from the issuance of any equity securities
by U.S. Borrower in connection with any public offering of equity
securities shall be applied as a prepayment on the Term Loans within
forty-five (45) days after the receipt of such proceeds by U.S.
Borrower. Such prepayment shall be applied ratably to the Term Notes
(based on outstanding principal balances) and shall be applied to
scheduled principal installments in inverse order of their maturities.
(8) SACROC Facility. If (x) any material part of the SACROC
Contracts shall for any reason be terminated, or shall cease to be in
full force and effect, and shall not be replaced or reinstated in a
manner acceptable to U.S. Agent within three (3) months or (y) Xxxxxx
Xxxxxx shall, for any reason, fail to pay any amounts coming due and
payable to U.S. Borrower or any of its Subsidiaries under any of the
SACROC Contracts (exclusive of billing disputes being contested in good
faith by Xxxxxx Xxxxxx in accordance with good industry practice) and
such failure shall not be cured by Xxxxxx Xxxxxx within twenty (20) days
after written notice thereof (exclusive of any cure by means of a waiver
by U.S. Borrower or any of its Subsidiaries or by payment by U.S.
Borrower or any of its Subsidiaries or any of their respective
Affiliates) or (z) the aggregate trailing twelve (12) month payments to
U.S. Borrower and its Subsidiaries under the SACROC Contracts shall be
less than the aggregate annual debt service on the Term Notes for such
twelve (12) month period for any reason, the entire unpaid principal
balance of the Term Notes and all accrued and unpaid interest on the
unpaid principal balance of the Term Notes shall be due and payable.
(c) Term Loan Amortization. The principal of the Term Notes shall be
due and payable in quarterly installments, each due on a Quarterly Date,
beginning on June 30, 2004, equal to $1,607,142.86 (in the aggregate for all
Term Notes) and allocated among the Term Loan Lenders pro rata in accordance
with the unpaid principal balances of the Term Notes held by the Term Loan
Lenders. On the Term Loan Maturity Date, the entire unpaid principal balance of
each Term Note and all accrued and unpaid interest on the unpaid principal
balance of each Term Note shall be finally due and payable.
(d) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Loans shall be due and payable on the Interest Payment
Dates.
(e) Payments and Interest on Reimbursement Obligations. Each Borrower
will pay to the applicable Agent for the account of each applicable Lender the
amount of each Reimbursement Obligation owed by such Borrower. Such payment
shall be due on the date on which the applicable Agent notifies the applicable
Borrower of the date and amount of the
applicable payment by an Issuer of any drawing under a Letter of Credit
or on the date of maturity of any Bankers' Acceptance. The amount of any
Reimbursement Obligation may, if the applicable conditions precedent specified
in Sections 5.1 and 5.2 hereof have been satisfied, be paid with the proceeds of
Loans or, in the case of Canadian Obligations, of the acceptance and purchase or
Bankers' Acceptances. Subject to Section 11.7 hereof, each Borrower will pay to
the applicable Agent for the account of each applicable Lender interest on any
Reimbursement Obligation at (i) at the applicable Base Rate (with respect to
Reimbursement Obligations denominated in Dollars) or at the Canadian Prime Rate
(with respect to Reimbursement Obligations denominated in Canadian Dollars) plus
the applicable Margin Percentage from the date such Reimbursement Obligation
arises until the date five (5) Business Days thereafter and (ii) at the
applicable Past Due Rate thereafter until the same is paid in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the
Canadian Dollar Revolving Notes shall bear interest at the Canadian Prime Rate
plus the applicable Margin Percentage and the outstanding principal balance of
the other Notes shall bear interest at the applicable Base Rate; provided, that
(1) all past due amounts, both principal and accrued interest, shall bear
interest at the Past Due Rate, and (2) subject to the provisions hereof, each
Borrower shall have the option of having all or any portion of the principal
balances of its Notes (other than the Canadian Dollar Revolving Notes) from
time to time outstanding bear interest at a Eurodollar Rate. The records of
Agents and each of the Lenders with respect to Interest Options, Interest
Periods and the amounts of Loans to which they are applicable shall be binding
and conclusive, absent manifest error. Interest on the amount of each advance
against the Notes shall be computed on the amount of that advance and from the
date it is made. Notwithstanding anything in this Agreement to the contrary,
for the full term of the Notes the interest rate produced by the aggregate of
all sums paid or agreed to be paid to the holders of the Notes for the use,
forbearance or detention of the debt evidenced thereby (including all interest
on the Notes at the Stated Rate plus the Additional Interest) shall not exceed
the Ceiling Rate.
(b) Designation and Conversion. Each Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and subject
to the last sentence of Section 3.3(a) and the provisions of Section 3.3(c),
each Borrower may elect to have a Eurodollar Rate apply or continue to apply to
all or any portion of the principal balance of its Notes (other than the
Canadian Dollar Revolving Notes). Each change in Interest Options shall be a
conversion of the rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective outstanding principal
balances of the applicable Notes. The Interest Options shall be designated or
converted in the manner provided below:
(i) The applicable Borrower shall give the applicable Agent telephonic
notice, promptly confirmed by a Rate Designation Notice (and the
applicable Agent shall promptly inform each applicable Lender
thereof). Each such telephonic and written notice shall specify the
amount of the Loan and type (i.e. U.S. Revolving Loan, Canadian
Revolving Loan, U.K. Revolving Loan or Term Loan) which is the
subject of the designation, if any; the amount of borrowings which
are to be converted or for which an Interest Option is designated;
the proposed date for the
designation or conversion and the Interest Period or Periods, if
any, selected by the applicable Borrower. Such telephonic notice
shall be irrevocable and shall be given to the applicable Agent no
later than the applicable Rate Designation Date.
(ii) No more than four (4) LIBOR Borrowings shall be in effect with
respect to the U.S. Revolving Loans at any time, no more than four
(4) LIBOR Borrowings shall be in effect with respect to the
Canadian Revolving Loans at any time and no more than four (4)
LIBOR Borrowings shall be in effect with respect to the U.K.
Revolving Loans at any time. No more than four (4) LIBOR Borrowings
shall be in effect with respect to the Term Loans at any time. No
single LIBOR Borrowing may include any combination of any two or
more of U.S. Revolving Loans, Canadian Revolving Loans, U.K.
Revolving Loans and Term Loans.
(iii) Each designation or conversion of a LIBOR Borrowing shall occur on
a Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR Borrowing may
be converted to a Base Rate Borrowing or another LIBOR Borrowing on
any day other than the last day of the applicable Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount equal to
$1,000,000 or an integral multiple of $500,000 in excess thereof.
(vi) Each designation of an Interest Option with respect to the U.S.
Revolving Notes shall apply to all of the U.S. Revolving Notes
ratably in accordance with their respective outstanding principal
balances. Each designation of an Interest Option with respect to
the Canadian Revolving Notes shall apply to all of the Canadian
Revolving Notes ratably in accordance with their respective
outstanding principal balances. Each designation of an Interest
Option with respect to the U.K. Revolving Notes shall apply to all
of the U.K. Revolving Notes ratably in accordance with their
respective outstanding principal balances. Each designation of an
Interest Option with respect to the Term Notes shall apply to all
of the Term Notes ratably in accordance with their respective
outstanding principal balances. If any Lender assigns an interest
in any of its Notes when any LIBOR Borrowing is outstanding with
respect thereto, then such assignee shall have its ratable interest
in such LIBOR Borrowing.
(vii) The entire outstanding principal balance of the Canadian Dollar
Revolving Notes shall bear interest at the Canadian Prime Rate.
(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at any
time make it
unlawful or impossible for any Lender to permit the establishment of or
to maintain any LIBOR Borrowing, the commitment of such Lender to establish such
LIBOR Borrowing shall forthwith be canceled and the applicable Borrower shall
forthwith, shall on the last day of the Interest Period relating to any
outstanding LIBOR Borrowing (or within such earlier period as may be required by
applicable law) (1) convert the LIBOR Borrowing of such Lender with respect to
which such demand was made to a Base Rate Borrowing; (2) pay all accrued and
unpaid interest to date on the amount so converted; and (3) pay any amounts
required to compensate each Lender for any additional cost or expense which any
Lender may incur as a result of such adoption of or change in such Legal
Requirement or in the interpretation or administration thereof and any Funding
Loss which any Lender may incur as a result of such conversion. If, when any
Agent so notifies any Borrower, such Borrower has given a Rate Designation
Notice specifying a LIBOR Borrowing but the selected Interest Period has not yet
begun, as to the applicable Lender such Rate Designation Notice shall be deemed
to be of no force and effect, as if never made, and the balance of the Loans
made by such Lender specified in such Rate Designation Notice shall bear
interest at the Base Rate until a different available Interest Option shall be
designated in accordance herewith.
(ii) Increased Cost of Borrowings. Subject to Section 11.17, if the
adoption after the Effective Date of any applicable Legal Requirement or any
change after the Effective Date in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive (whether or not having
the force of law) issued after the Effective Date by any central bank or
Governmental Authority shall at any time as a result of any portion of the
principal balances of the Notes being maintained on the basis of a Eurodollar
Rate:
(1) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due under
any LIBOR Borrowing or other amount due hereunder, other than
income and franchise taxes of the United States or its
political subdivisions or such other jurisdiction in which the
applicable Lender has its principal office or applicable
lending office; or
(2) change the basis of taxation of payments due from any Borrower
to any Lender under any LIBOR Borrowing (otherwise than by a
change in the rate of taxation of the overall net income of
such Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement
included in the calculation of the applicable Eurodollar
Rate), special deposit requirement or similar requirement
(including, but not limited to, state law requirements)
against assets of any Lender, or against deposits with any
Lender, or against loans made by any Lender, or against any
other funds, obligations or other Property owned or held by
any Lender; or
(4) impose on any Lender any other condition regarding any LIBOR
Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by any Agent (accompanied by a statement setting
forth in reasonable detail the applicable Lender's basis therefor), the
applicable Borrower shall pay to the applicable Agent additional amounts which
shall compensate each Lender for such increased cost or reduced amount. The
reasonable, good faith determination by any Lender of the amount of any such
increased cost, increased reserve requirement or reduced amount shall be
conclusive and binding, absent manifest error. Each Borrower shall have the
right, if it receives from any Agent any notice referred to in this paragraph,
upon three Business Days' notice to the applicable Agent (which shall notify
each affected Lender), either (i) to repay in full (but not in part) any
borrowing with respect to which such notice was given, together with any accrued
interest thereon, or (ii) to convert the LIBOR Borrowing which is the subject of
the notice to a Base Rate Borrowing; provided, that any such repayment or
conversion shall be accompanied by payment of (x) the amount required to
compensate each Lender for the increased cost or reduced amount referred to in
the preceding paragraph; (y) all accrued and unpaid interest to date on the
amount so repaid or converted, and (z) any Funding Loss which any Lender may
incur as a result of such repayment or conversion. Each Lender will notify the
applicable Borrower through the applicable Agent of any event occurring after
the date of this Agreement which will entitle such Lender to compensation
pursuant to this Section as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation, and (if so requested by the
applicable Borrower through the applicable Agent) will designate a different
lending office of such Lender for the applicable LIBOR Borrowing or will take
such other action as the applicable Borrower may reasonable request if such
designation or action is consistent with the internal policy of such Lender and
legal and regulatory restrictions, will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender.
(iii)Inadequacy of Pricing and Rate Determination. If, for any reason
with respect to any Interest Period, the applicable Agent (or, in the case of
clause 3 below, the applicable Lender) shall have reasonably and in good faith
determined (which determination shall be conclusive and binding upon the
applicable Borrower, absent manifest error) that:
(1) such Agent is unable through its customary general practices
to determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market,
generally, such Agent is not being offered deposits in United
States dollars in such market, for the applicable Interest
Period and in an amount equal to the amount of any applicable
LIBOR Borrowing requested by the applicable Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to any Lender of making and maintaining such
LIBOR Borrowing hereunder for any proposed Interest Period,
then the applicable Agent shall give the applicable Borrower notice thereof and
thereupon, (A) any Rate Designation Notice previously given by such Borrower
designating the applicable LIBOR Borrowing which has not commenced as of the
date of such notice from such Agent shall be deemed for all purposes hereof to
be of no force and effect, as if never given, and (B) until the applicable Agent
shall notify such Borrower that the circumstances giving rise to such notice
from such Agent no longer exist, each Rate Designation Notice requesting the
applicable Eurodollar Rate shall be deemed a request for a Base Rate Borrowing,
and any applicable LIBOR Borrowing then outstanding shall be converted, without
any notice to or from the applicable Borrower, upon the termination of the
Interest Period then in effect with respect to it, to a Base Rate Borrowing.
(iv) Funding Losses. Each Borrower shall indemnify each applicable
Lender against and hold each applicable Lender harmless from any Funding Loss
relating to Loans to such Borrower or relating to Bankers' Acceptances requested
by such Borrower. Subject to Section 11.17, this indemnity shall survive the
payment of the Notes. Within 15 Business Days after demand by any Agent
(accompanied by a certificate of the applicable Lender setting forth in
reasonable detail the amount and calculation of the amount claimed as to any
Funding Losses, which shall be conclusive and binding upon the applicable
Borrower, absent manifest error), the applicable Borrower shall pay to such
Agent, for the account of such Lender, the amount of such Funding Losses.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing by
causing a branch or affiliate of such Lender to make such Loan and may transfer
and carry such Loan at, to or for the account of any branch office or affiliate
of such Lender; provided, that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by such Lender and the obligation of
the applicable Borrower to repay such Loan shall nevertheless be to such Lender
and shall be deemed held by it for the account of such branch or affiliate.
Without notice to any Borrower or any other Person, each rate required to be
calculated or determined under this Agreement shall automatically fluctuate
upward and downward in accordance with the provisions of this Agreement.
Interest at the Canadian Prime Rate or any applicable Prime Rate shall be
computed on the basis of the actual number of days elapsed in a year consisting
of 365 or 366 days, as the case may be. All other interest required to be
calculated or determined under this Agreement shall be computed on the basis of
the actual number of days elapsed in a year consisting of 360 days, unless the
Ceiling Rate would thereby be exceeded, in which event, to the extent necessary
to avoid exceeding the Ceiling Rate, the applicable interest shall be computed
on the basis of the actual number of days elapsed in the applicable calendar
year in which accrued.
(e) Funding Sources. Notwithstanding any provision of this Agreement to
the contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
any Borrower hereunder, under the Notes and under the other Loan Documents shall
be made, without set-off or counterclaim, in (i) with respect to Bankers'
Acceptance Liabilities and Canadian Prime Loans, Canadian Dollars and (ii) in
all other cases, in Dollars, in immediately available funds, to the applicable
Agent at its Principal Office (or in the case of a successor U.S. Agent, at the
principal office of such successor U.S. Agent in the United States, in the case
of a successor Canadian Agent, at the principal office of such successor
Canadian Agent in Canada and in the case of a successor U.K. Agent, at the
principal office of such successor U.K. Agent in the United Kingdom), not later
than 11:00 a.m. Houston, Texas time (in the case of any payment by the U.S.
Borrower), 12:00 noon Toronto, Ontario time (in the case of any payment by the
Canadian Borrower) or 11:00 a.m. London, United Kingdom time (in the case of any
payment by the U.K. Borrower) on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day).
(b) Each Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to the applicable Agent
the Obligations payable by such Borrower hereunder or thereunder to which such
payment is to be applied. Each payment received by any Agent hereunder, under
any Note or under any other Loan Document for the account of a Lender shall be
paid promptly to such Lender, in immediately available funds. If any Agent fails
to send to any Lender the applicable amount by the close of business on the date
any such payment is received by such Agent if such payment is received prior to
11:00 a.m. Houston, Texas time (in the case of any payment to a U.S. Lender) or
12:00 noon Toronto, Ontario time (in the case of any payment to a Canadian
Lender) or 11:00 a.m. London, United Kingdom time (in the case of any payment to
a U.K. Lender) (or on the next succeeding Business Day with respect to payments
which are received after such time), such Agent shall pay to the applicable
Lender interest on such amount from such date at a rate of interest per annum
equal to (i) in respect of Obligations which are denominated in Dollars, the
Federal Funds Rate and (ii) in respect of Canadian Obligations which are
denominated in Canadian Dollars, the CDOR Rate. Borrowers, Lenders and Agents
acknowledge and agree that this provision and each other provision of this
Agreement or any of the other Loan Documents relating to the application of
amounts in payment of the Obligations shall be subject to the provisions of
Section 4.2(d) regarding pro rata application of amounts after an Event of
Default shall have occurred and be continuing.
(c) If the due date of any payment hereunder or under any other Loan
Document falls on a day which is not a Business Day, the due date for such
payments (except as otherwise provided in clause (2) of the definition of
"Interest Period") shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period of such
extension.
(d) All payments by any Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on account
of any present or future
income, stamp, or other taxes, fees, duties, withholding or other charges
of any nature whatsoever imposed by any taxing authority excluding in
the case of each Agent, each Issuer and each Lender taxes imposed on or measured
by its net income or franchise taxes imposed by the jurisdiction in which it is
organized or through which it acts for purposes of this Agreement (such
non-excluded items being hereinafter referred to as "Taxes"). If any withholding
or deduction from any payment to be made to, or for the account of, any Agent,
any Issuer or any Lender by any Borrower hereunder or under any other Loan
Document is required in respect of any Taxes pursuant to any applicable law,
rule, or regulation, then such Borrower will (i) pay to the relevant authority
the full amount required to be so withheld or deducted; (ii) to the extent
available, promptly forward to the applicable Agent an official receipt or other
documentation reasonably satisfactory to such Agent evidencing such payment to
such authority; and (iii) pay to the applicable Agent, for the account of each
affected Person, such additional amount or amounts as are necessary to ensure
that the net amount actually received by such Person will equal the full amount
such Lender would have received had no such withholding or deduction been
required. Each such Person shall reasonably and in good faith determine such
additional amount or amounts payable to it (which determination shall, in the
absence of manifest error, be conclusive and binding on each Borrower). If any
Agent, any Issuer or any Lender becomes aware that any such withholding or
deduction from any payment to be made by any Borrower hereunder or under any
other Loan Document is required, then such Person shall promptly notify the
applicable Agent and the applicable Borrower thereof stating the reasons
therefor and the additional amount required to be paid under this Section. Each
Lender shall execute and deliver to the applicable Agent and the applicable
Borrower such forms as it may be required to execute and deliver pursuant to
Section 11.13 hereof. To the extent that any such withholding or deduction
results from a breach of a representation by a Lender set forth herein or from
the failure of a Lender to provide a form required by Section 11.13 hereof
(unless such failure is due to some prohibition under applicable Legal
Requirements), the applicable Borrower shall have no obligation to pay the
additional amount required by clause (iii) above. Anything in this Section
notwithstanding, if any Lender elects to require payment by any Borrower of any
material amount under this Section, the applicable Borrower may, within 60 days
after the date of receiving notice thereof and so long as no Default shall have
occurred and be continuing, elect to terminate such Lender as a party to this
Agreement; provided that, concurrently with such termination the applicable
Borrower shall (i) if the Agents and each of the other Lenders shall consent,
pay that Lender all principal, interest and fees and other amounts owed to such
Lender through such date of termination or (ii) have arranged for another
financial institution approved by the Agents (such approval not to be
unreasonably withheld or delayed) as of such date, to become a substitute Lender
for all purposes under this Agreement in the manner provided in Section 11.6;
provided further that, prior to substitution for any Lender, the applicable
Borrower shall have given written notice to the Agents of such intention and the
Lenders shall have the option, but no obligation, for a period of 60 days after
receipt of such notice, to increase their U.S. Commitments, Canadian Commitments
or U.K. Commitments, as the case may be, in order to replace the affected Lender
in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under Section 2.1 hereof shall be made (w)
in the case of Canadian Revolving Loans, ratably from the Canadian Lenders in
accordance with their respective Canadian Commitments, (x) in the case of U.K.
Revolving Loans, ratably from the U.K. Lenders in accordance with their
respective U.K. Commitments, (y) in the case of U.S. Revolving Loans,
ratably from the U.S. Lenders in accordance with their respective U.S.
Commitments and (z) in the case of Term Loans, ratably from the Term Loan
Lenders in accordance with the amounts set forth opposite their signature lines
hereto under the heading "Term Loans"; (b) each payment of commitment fees shall
be made for the account of the Lenders, and each termination or reduction of the
U.S. Commitments, Canadian Commitments or U.K. Commitments of the Lenders under
Section 2.3 hereof shall be applied, pro rata, according to the Lenders'
respective U.S. Commitments, Canadian Commitments or U.K. Commitments, as the
case may be; (c) each payment by any Borrower of principal of or interest on the
Term Loans, Canadian Revolving Loans, U.K. Revolving Loans, U.S. Revolving Loans
or any Bankers' Acceptance, as the case may be, prior to the occurrence of an
Event of Default (or after the applicable Event of Default shall have been fully
cured or waived) shall be made to the applicable Agent for the account of the
applicable Lenders pro rata in accordance with the respective unpaid principal
amounts of the Term Loans, Canadian Revolving Loans, U.K. Revolving Loans or
U.S. Revolving Loans (as the case may be) held by or Bankers' Acceptances
accepted by such Lenders; (d) each payment by any Borrower of principal of or
interest on the Term Loans, Canadian Revolving Loans, U.K. Revolving Loans, U.S.
Revolving Loans or any Bankers' Acceptance, as the case may be, while an Event
of Default shall have occurred and be continuing, shall be made to the
applicable Agent for the account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Obligations held by the Lenders (i.e.
such payments shall be shared by all of the Lenders and not restricted to the
holders of U.S. Revolving Notes, Canadian Revolving Notes, Canadian Dollar
Revolving Notes, U.K. Revolving Notes or Term Notes, or Lenders having accepted
Bankers' Acceptances, as the case may be, regardless of any attempted contrary
designation by any Borrower), and (e) the applicable Lenders (other than the
applicable Issuer) shall purchase from the applicable Issuer participations in
each Letter of Credit to the extent of their respective Commitment Percentages.
4.3 Certain Actions, Notices, Etc. Notices to the applicable Agent of
any termination or reduction of U.S. Commitments, Canadian Commitments or U.K.
Commitments, as the case may be, and of borrowings and optional prepayments of
Loans and requests for issuances of Letters of Credit shall be irrevocable and
shall be effective only if received by the applicable Agent not later than noon
Houston, Texas time (in the case of U.S. Revolving Loans which are same day
fundings), 11:00 a.m. Houston, Texas time (in the case of U.S. Revolving Loans
which are not same day fundings and U.S. Letters of Credit), 12:00 noon Toronto,
Ontario time (in the case of Canadian Revolving Loans which are not same day
fundings, Bankers' Acceptances and Canadian Letters of Credit), 10:00 a.m.
Toronto, Ontario time (in the case of Canadian Revolving Loans which are same
day fundings), 11:00 a.m. London, United Kingdom time (in the case of U.K.
Revolving Loans which are not same day fundings and U.K. Letters of Credit) or
10:00 a.m. London, United Kingdom time (in the case of U.K. Revolving Loans
which are same day fundings) on the number of Business Days prior to the date of
the relevant termination, reduction, borrowing and/or prepayment specified
below:
Number of Business
Days Prior Notice
------------------
Section 2.4(d) Reallocations 10
Termination or Reduction of U.S.
Commitments, Canadian Commitments
or U.K. Commitments 5
Increase of U.S. Commitments (pursuant
to Section 2.4(c) hereof) 10
U.S. Revolving Loan, Canadian
Revolving Loan or U.K. Revolving
Loan repayment same day
Base Rate Borrowings same day
and Canadian Prime Loans
Letter of Credit issuance 2
Prepayments required pursuant to
Section 3.2(b) same day
Optional prepayment of
Term Loan 5
Selection of a Eurodollar Rate 3 LIBOR
Business Days
Bankers' Acceptances 2
Each such notice of termination or reduction shall specify the amount of the
applicable U.S. Commitment, Canadian Commitment or U.K. Commitment to be
terminated or reduced. Each such notice of borrowing or prepayment shall specify
the amount of the Loans to be borrowed or prepaid and the date of borrowing or
prepayment (which shall be a Business Day). The applicable Agent shall promptly
notify the affected Lenders of the contents of each such notice.
4.4 Non-Receipt of Funds by Any Agent. Unless the applicable Agent shall
have been notified by a Lender or a Borrower (the "Payor") prior to the date on
which such Lender is to make payment to such Agent of the proceeds of a Loan (or
funding of a drawing under a Letter of Credit or reimbursement with respect to
any drawing under a Letter of Credit or funding of a payment under a Bankers'
Acceptance or reimbursement with respect to any payment under a Bankers'
Acceptance) to be made by it hereunder or the applicable Borrower is to make a
payment to such Agent for the account of one or more of the Lenders, as the case
may be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to such Agent, the applicable Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to such Agent, the recipient of such payment (or, if such recipient is
the beneficiary of a Letter of Credit, the applicable Borrower and, if such
Borrower fails to pay the amount thereof to the applicable Agent forthwith upon
demand, the applicable Lenders ratably in proportion to their
respective Commitment Percentages) shall, on demand, pay to such Agent
the amount made available by such Agent, together with interest thereon in
respect of the period commencing on the date such amount was so made available
by such Agent until the date Agent recovers such amount at a rate per annum for
such period equal to (i) in respect of Obligations which are denominated in
Dollars, the Federal Funds Rate and (ii) in respect of Canadian Obligations
which are denominated in Canadian Dollars, the CDOR Rate.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of any
principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or Lien granted under Section 9.2 hereof),
banker's lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. Each Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender so purchasing a participation in the Loans made, or
Reimbursement Obligations or other Obligations held, by other Lenders may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans, Reimbursement Obligations or other Obligations in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Borrower.
5. Conditions Precedent.
5.1 Initial Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender or each Issuer to make its initial Loans or issue or
participate in the initial Letter of Credit hereunder or to accept and purchase
its initial Bankers' Acceptance hereunder (whichever shall first occur) is
subject to the following conditions precedent, each of which shall have been
fulfilled or waived to the satisfaction of the Majority Lenders (or by all of
the Lenders to the extent that such waiver requires unanimous consent under
Section 11.5 hereof):
(a) Authorization and Status. Agents shall have received (i) copies of
the Organizational Documents of each Obligor certified as true and correct by
its secretary, assistant secretary or other equivalent officer, (ii) evidence
reasonably satisfactory to Agents of all action taken by each Obligor
authorizing the execution, delivery and performance of the Loan Documents and
all other documents related to this Agreement to which it is a party (including,
without limitation, a certificate of the secretary, assistant secretary or other
equivalent officer of each such party which is a corporation setting forth the
resolutions of its Board of Directors authorizing the transactions contemplated
thereby), and (iii) such certificates as may be appropriate to demonstrate the
qualification and good standing of each Obligor in the jurisdiction
of its organization and in each other jurisdiction where the failure in
which to qualify could reasonably be expected to have a Material Adverse Effect.
(b) Incumbency. Each Obligor shall have delivered to Agents a
certificate in respect of the name and signature of each of the officers or
other authorized individual (i) who is authorized to sign on its behalf the
applicable Loan Documents to which it is a party related to any Loan, the
issuance of any Letter of Credit or the acceptance of any Bankers' Acceptance
and (ii) who will, until replaced by other officer(s) or other authorized
individual(s) duly authorized for that purpose, act as its representative for
the purposes of signing documents and giving notices and other communications in
connection with any Loan, the issuance of any Letter of Credit or the acceptance
of any Bankers' Acceptance. Each Agent and each Lender may conclusively rely on
such certificates until they receive notice in writing from the applicable
Obligor to the contrary.
(c) Notes. Agents shall have received the appropriate Notes of
Borrowers for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and delivered
the Loan Documents to which it is a party (in such number of copies as Agents
shall have requested). Each such Loan Document shall be in substantially the
form furnished to the Lenders prior to their execution of this Agreement,
together with such changes therein as Agents may approve.
(e) Security Matters. All such action as Agents shall have requested to
perfect the Liens created pursuant to the Security Documents which are in effect
as of the Effective Date shall have been taken, including, without limitation,
where applicable, the filing and recording of the Security Documents with the
appropriate Governmental Authorities. Agent shall also have received evidence
satisfactory to it that the Liens created by the Security Documents constitute
first priority Liens, except as expressly provided herein or therein, including,
without limitation, delivery of all applicable stock certificates (with stock
powers executed in blank), Uniform Commercial Code search reports and other
applicable personal property registry reports, satisfactory title evidence in
form and substance acceptable to Agent, and executed releases or assignments (as
U.S. Agent may require) of any prior Liens which are not permitted hereunder.
(f) Fees and Expenses. Borrowers shall have paid to Agents all unpaid
fees in the amounts previously agreed upon in writing between any Borrower and
any Agent.
(g) Insurance. Borrowers shall have delivered to Agents certificates of
insurance satisfactory to Agents evidencing the existence of all insurance
required to be maintained by each Obligor by this Agreement and the Security
Documents.
(h) Opinions of Counsel. Agents shall have received such opinions of
counsel to Obligors as Agents shall reasonably request with respect to Obligors
and the Loan Documents.
(i) Consents. Agents shall have received evidence satisfactory to the
Majority Lenders that all material consents of each Governmental Authority and
of each other Person, if any, reasonably required in connection with (a) the
Loans, Letters of Credit and Bankers'
Acceptances and (b) the execution, delivery and performance of this Agreement
and the other Loan Documents have been satisfactorily obtained.
(j) Export/Import Credit Facilities. Agents shall have received copies
of the material documentation relating to the Export/Import Credit Facilities,
in Proper Form. Upon request of Agents or the Majority Lenders, such copies
shall be certified as true, correct and complete by the U.S. Borrower.
(k) Real Property Items. U.S. Agent shall have received brokers'
valuations of the Property covered by the Mortgages, together with evidence
reasonably satisfactory to the U.S. Agent that none of the Property covered by
the Mortgages lies in an area requiring special notices of flood hazard issues
or the purchase of flood hazard insurance and, to the extent reasonably required
by U.S. Agent with respect to Property covered by any Mortgage a policy or
policies of title insurance issued by a nationally recognized title insurance
company, insuring the Lien of each such Mortgage as a valid first Lien on the
Property described therein, free of any other Liens except as permitted
hereunder, together with such endorsements, coinsurance and reinsurance as the
U.S. Agent may reasonably request, and such surveys, abstracts and appraisals as
may be required pursuant to such Mortgages or as the U.S. Agent may reasonably
request.
(l) Field Exam. Agents shall have received satisfactory results from a
field exam of the Accounts and Inventory of U.S. Borrower, Canadian Borrower and
each applicable Obligor in respect of the U.S. Obligations and the Canadian
Obligations.
(m) Appraisals. U.S. Agent shall have received satisfactory results of
appraisals of the plant, property and equipment of U.S. Borrower each applicable
Obligor in respect of the U.S. Obligations, including an update of the 0000
Xxxxxx & Click report with respect to the SACROC Facility.
(n) Environmental. To the extent required by Agents, Agents shall have
received satisfactory independent environmental engineers' environmental
reports, including a Phase 1 on the Calgary manufacturing facility and the
Electra, Texas facility, reporting on the existence of existing and potential
environmental risks along with an estimate of any applicable costs for clean up.
(o) SACROC Facility. U.S. Agent shall have received satisfactory
Security Agreements providing for a collateral assignment to U.S. Agent of all
rights, titles and interests of National Tank Company in and to the SACROC
Contracts.
(p) Other Documents. Agents shall have received such other documents
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agents may reasonably request.
5.2 All Loans, Letters of Credit and Bankers' Acceptances. The
obligation of each Lender to make any Loan to be made by it hereunder or to
issue or participate in any Letter of Credit or to accept and purchase any
Bankers' Acceptance is subject to (a) the accuracy, in all material respects, on
the date of such Loan or such issuance or such acceptance and purchase of all
representations and warranties of each Obligor contained in this Agreement and
the other
Loan Documents; (b) the applicable Agent shall have received the following, all
of which shall be duly executed and in Proper Form: (1) a Request for Extension
of Credit as to the Loan, Letter of Credit or Bankers' Acceptance, as the case
may be, by the time and on the Business Day specified under Section 4.3 hereof,
(2) in the case of a Letter of Credit, an Application, and (3) such other
documents as the applicable Agent may reasonably require; (c) prior to the
making of such Loan or the issuance of such Letter of Credit or the acceptance
and purchase of such Bankers' Acceptance, there shall have occurred no event
which could reasonably be expected to have a Material Adverse Effect; (d) no
Default or Event of Default shall have occurred and be continuing; and (e) the
making of such Loan or the issuance of such Letter of Credit or the acceptance
and purchase of such Bankers' Acceptance shall not be illegal or prohibited by
any applicable Legal Requirement. The submission by any Borrower of a Request
for Extension of Credit shall be deemed to be a representation and warranty that
the conditions precedent to the applicable Loan or Letter of Credit or Bankers'
Acceptance have been satisfied.
6. Representations and Warranties.
To induce Agents, the Issuers and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit and accept and purchase Bankers' Acceptances, U.S. Borrower, Canadian
Borrower and U.K. Borrower each represents and warrants (such representations
and warranties to survive any investigation and the making of the Loans and the
issuance of any Letters of Credit and the acceptance and purchase of any
Bankers' Acceptances) to the Lenders, Issuers and Agents as follows:
6.1 Organization. Each Obligor (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization; (b)
has all necessary power and authority to conduct its business as presently
conducted; and (c) is duly qualified to do business and in good standing in the
jurisdiction of its organization and in all jurisdictions in which the failure
to so qualify could reasonably be expected to have a Material Adverse Effect.
6.2 Financial Statements. Borrowers have furnished to Agents (a)
audited consolidated financial statements (including a balance sheet) as to U.S.
Borrower that fairly present in all material respects, in accordance with GAAP,
the consolidated financial condition and the results of operations of U.S.
Borrower as at the end of the fiscal years ended December 31, 2001 and December
31, 2002; (b) unaudited consolidating financial statements (including a balance
sheet) as to U.S. Borrower and its Subsidiaries which fairly present in all
material respects, in accordance with GAAP, the consolidating financial
condition and the results of operations of U.S. Borrower and its Subsidiaries,
on a consolidating basis, as at the end of the fiscal years ended December 31,
2001 and December 31, 2002; and (c) unaudited consolidated and consolidating
financial statements (including a balance sheet) as to U.S. Borrower and its
Subsidiaries which fairly present in all material respects, in accordance with
GAAP, the consolidated and consolidating financial condition and the results of
operations of U.S. Borrower and its Subsidiaries as at the end of the fiscal
quarters ended March 31, 2003, June 30, 2003, September 30, 2003 and December
31, 2003. No events, conditions or circumstances have occurred from the date
that the financial statements were delivered to Agent through the Effective Date
which would cause said financial statements to be misleading in any material
respect. Except for the Loan Documents, there are no material instruments or
liabilities which should be reflected in such financial statements provided to
Agent which are not so reflected.
6.3 Enforceable Obligations; Authorization. The Loan Documents to which
the applicable Obligors are parties are legal, valid and binding obligations of
each applicable Obligor, enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency and other similar laws and
judicial decisions affecting creditors' rights generally and by general
equitable principles. The execution, delivery and performance of the Loan
Documents by the respective Obligors (a) have all been duly authorized by all
necessary corporate action; (b) are within the corporate power and authority of
each applicable Obligor; (c) do not and will not contravene or violate any Legal
Requirement applicable to any applicable Obligor or the Organizational Documents
of any applicable Obligor, the contravention or violation of which could
reasonably be expected to have a Material Adverse Effect; (d) do not and will
not result in the breach of, or constitute a default under, any material
agreement or instrument by which any Obligor or any of its Property may be
bound, and (e) do not and will not result in the creation of any Lien upon any
Property of any Obligor, except in favor of Agents as expressly contemplated
herein or therein. All necessary permits, registrations and consents for such
making and performance have been obtained. Except as otherwise expressly stated
in the Security Documents, the Liens of the Loan Documents will constitute valid
and perfected first and prior Liens on the Property described therein, subject
to no other Liens whatsoever except Permitted Liens.
6.4 Other Debt. No Obligor is in default in the payment of any other
Borrowed Money Indebtedness or under any agreement, mortgage, deed of trust,
security agreement or lease to which it is a party and which default could
reasonably be expected to have a Material Adverse Effect.
6.5 Litigation. Except as set forth on Schedule 6.5 hereto, there is no
material litigation or administrative proceeding, to the knowledge of any
executive officer of any Borrower, pending or threatened against, nor any
material outstanding judgment, order or decree against, any Obligor before or by
any Governmental Authority. No Obligor is in default with respect to any
judgment, order or decree of any Governmental Authority where such default could
reasonably be expected to have a Material Adverse Effect.
6.6 Title. Each Obligor has good and defensible title to the
Collateral, if any, pledged (or purported to be pledged) by such Obligor
pursuant to the Security Documents, free and clear of all Liens (except Liens
permitted under Section 8.2 hereof).
6.7 Taxes. Each Obligor has filed all tax returns required to have been
filed by it and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith
or where the failure to make required filings or pay required taxes could not
reasonably be expected to have a Material Adverse Effect.
6.8 Regulations U and X. None of the proceeds of any Loan or proceeds
from the acceptance and purchase of Bankers' Acceptances will be used for the
purpose of purchasing or carrying directly or indirectly any margin stock or for
any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulations U and X of the Board of Governors of the
Federal Reserve System, as any of them may be amended from time to time.
6.9 Subsidiaries. As of the Effective Date, U.S. Borrower has no
Subsidiaries other than as set forth on Schedule 6.9 hereto. The percentage of
the issued and outstanding Equity Interests in each applicable Subsidiary which
is owned by U.S. Borrower or one or more of its Subsidiaries is set forth on
Schedule 6.9 hereto.
6.10 No Untrue or Misleading Statements. No document, instrument or
other writing furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated in any Loan Document contains any
untrue statement of material fact or omits to state any such fact necessary to
make the representations, warranties and other statements contained herein or in
such other document, instrument or writing not misleading in any material
respect.
6.11 ERISA. With respect to each Plan, each Borrower and each member of
the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in compliance
in all material respects with the provisions of ERISA and the Code. No event has
occurred which could result in a liability of any Borrower or any member of the
Controlled Group to the PBGC or a Plan (other than to make contributions in the
ordinary course) that could reasonably be expected to have a Material Adverse
Effect. There have not been any nor are there now existing any events or
conditions that would cause the Lien provided under Section 4068 of ERISA to
attach to any Property of any Borrower or any member of the Controlled Group.
Except as described on Schedule 6.11 hereto, the aggregate Unfunded Liabilities
in respect of all Plans as of the date hereof do not exceed $1,000,000. No
"prohibited transaction" has occurred with respect to any Plan.
6.12 Investment Company Act. No Obligor is an investment company within
the meaning of the Investment Company Act of 1940, as amended, or, directly or
indirectly, controlled by or acting on behalf of any Person which is an
investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an "affiliate" or
a "subsidiary company" of a "public utility company," or a "holding company," or
an "affiliate" or a "subsidiary company" of a "holding company," as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended.
6.14 Solvency. None of U.S. Borrower, Canadian Borrower, U.K. Borrower,
any other Obligor, U.S. Borrower and its Subsidiaries, on a consolidated basis,
Canadian Borrower and its Subsidiaries, on a consolidated basis, or U.K.
Borrower and its Subsidiaries, on a consolidated basis, is "insolvent," as such
term is used and defined in (i) the Bankruptcy Code and (ii) the fraudulent
conveyance statutes of the State of Texas or of any jurisdiction in which any of
the Collateral may be located or unable to pay its debts within the meaning of
Section 123 of the Insolvency Xxx 0000 (England and Wales).
6.15 Fiscal Year. The fiscal year of each Obligor ends on December 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.17 Environmental Matters. Each Obligor has, to the best knowledge of
their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain such
permits), the failure to obtain which could reasonably be expected to have a
Material Adverse Effect. Each Obligor and its Properties, business and
operations have been and are, to the best knowledge of their respective
executive officers, in compliance with all applicable Requirements of
Environmental Law and Environmental Permits the failure to comply with which
could reasonably be expected to have a Material Adverse Effect. Each Obligor and
its Properties, business and operations are not subject to any (A) Environmental
Claims or (B), to the best knowledge of their respective executive officers
(after making reasonable inquiry of the personnel and records of their
respective Corporations), Environmental Liabilities, in either case direct or
contingent, arising from or based upon any act, omission, event, condition or
circumstance occurring or existing on or prior to the date hereof which could
reasonably be expected to have a Material Adverse Effect. None of the officers
of any Obligor has received any notice of any violation or alleged violation of
any Requirements of Environmental Law or Environmental Permit or any
Environmental Claim in connection with its Properties, liabilities, condition
(financial or otherwise), business or operations which could reasonably be
expected to have a Material Adverse Effect. None of U.S. Borrower, Canadian
Borrower or U.K. Borrower knows of any event or condition with respect to
currently enacted Requirements of Environmental Laws presently scheduled to
become effective in the future with respect to any of the Properties of any
Obligor which could reasonably be expected to have a Material Adverse Effect,
for which the applicable Obligor has not made good faith provisions in its
business plan and projections of financial performance.
6.18 Collateral Covered. As of the Effective Date, the Collateral
covered by the Security Documents constitutes substantially all real Property
(other than the Excluded Real Property) and substantially all material personal
Property owned by U.S. Borrower and its Subsidiaries (other than Excluded
Subsidiaries and Foreign Subsidiaries which are not Subsidiaries of Canadian
Borrower or U.K. Borrower) and all of the issued and outstanding Equity
Interests in all of the Subsidiaries of U.S. Borrower (other than Excluded
Subsidiaries and Foreign Subsidiaries which are not Subsidiaries of Canadian
Borrower or U.K. Borrower) owned by U.S. Borrower or any of its Subsidiaries
(with the Collateral being allocated among Canadian Obligations, U.K.
Obligations and U.S. Obligations as herein provided).
6.19 Property of Excluded Subsidiaries and Certain Foreign Subsidiaries.
The aggregate value (based on the greater of book or market value) of the
Property owned by Excluded Subsidiaries or by Foreign Subsidiaries of U.S.
Borrower (other than Canadian Borrower, U.K. Borrower or their Subsidiaries) as
of the Effective Date is no greater than $7,000,000.
7. Affirmative Covenants.
U.S. Borrower, Canadian Borrower and U.K. Borrower each covenants and
agrees with Agents and the Lenders that prior to the payment of all Obligations
and the termination of all U.S. Commitments, Canadian Commitments and U.K.
Commitments it will do or cause to be
done, and cause each other Obligor (unless limited by the language of the
applicable provision to less than all of the Obligors) to do or cause to be
done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times, except
where failure or noncompliance could not reasonably be expected to have a
Material Adverse Effect: (a) pay when due all taxes and governmental charges of
every kind upon it or against its income, profits or Property, unless and only
to the extent that the same shall be contested diligently in good faith and
adequate reserves in accordance with GAAP have been established therefor; (b) do
all things necessary to preserve its existence, qualifications, rights and
franchises; (c) comply with all applicable Legal Requirements (including without
limitation Requirements of Environmental Law) in respect of the conduct of its
business and the ownership of its Property; and (d) cause its Property to be
protected, maintained and kept in good repair, ordinary wear and tear excepted,
and make all replacements and additions to such Property as may be reasonably
necessary to conduct its business properly and efficiently in accordance with
past practices.
7.2 Financial Statements and Information. Furnish to Agents and each
Lender each of the following: (a) as soon as available and in any event within
90 days after the end of the fiscal year 2003 and within 60 days after the end
of each fiscal year thereafter, Annual Financial Statements of U.S. Borrower;
(b) as soon as available and in any event within 45 days after the end of each
fiscal quarter during the fiscal year 2004 and within 35 days after the end of
each fiscal quarter of each fiscal year thereafter, Quarterly Financial
Statements of U.S. Borrower; (c) concurrently with the financial statements
provided for in Subsections 7.2(a) and (b) hereof, such schedules, computations
and other information, in reasonable detail, as may be reasonably required by
Agents to demonstrate compliance with the covenants set forth herein or
reflecting any non-compliance therewith as of the applicable date, all certified
and signed by a duly authorized officer of U.S. Borrower as true and correct in
all material respects to the best knowledge of such officer and, commencing with
the quarterly financial statement prepared as of March 31, 2004, a compliance
certificate ("Compliance Certificate") substantially in the form of Exhibit F
hereto, duly executed by such authorized officer; (d) by March 31 of each fiscal
year, U.S. Borrower's annual business plan for the then current fiscal year
(including their proforma balance sheets and income and cash flow projections
for such fiscal year); (e) promptly upon their becoming publicly available, each
financial statement, report, notice or definitive proxy statements sent by U.S.
Borrower to shareholders generally and each regular or periodic report and each
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by U.S. Borrower with, or received
by U.S. Borrower in connection therewith from, any securities exchange or the
Securities and Exchange Commission or any successor agency; (f) (1) as of the
Effective Date and (2) within 30 days after the end of each calendar month, a
Borrowing Base Certificate as at the Effective Date or the last day of such
calendar month, together with such supporting information as U.S. Agent may
reasonably request; (g) within 30 days after (i) the end of each calendar
quarter or (ii) receipt of a request therefor (which may be given from time to
time) from U.S. Agent, (1) a listing and aging of the Accounts of (x)
U.S. Borrower and its Subsidiaries (other than Foreign Subsidiaries or Excluded
Subsidiaries), (y) the Subsidiaries of Canadian Borrower and (z) the
Subsidiaries of U.K. Borrower which are Foreign Subsidiaries (other than
Excluded Subsidiaries) as of the end of the most recently ended calendar month,
prepared in reasonable detail and containing such other information as U.S.
Agent may reasonably request (including information supporting the progress
payments included in the Eligible Accounts) and (2) a summary of the Inventory
of (x)
U.S. Borrower and its Subsidiaries (other than Foreign Subsidiaries or Excluded
Subsidiaries) and (y) the Subsidiaries of Canadian Borrower as of the end of the
most recently ended calendar month, prepared in reasonable detail and containing
such other information as U.S. Agent may reasonably request; (h) from time to
time, at any time upon the request of U.S. Agent, but at the cost of the
applicable Borrower, a report of an independent collateral field examiner
approved by U.S. Agent in writing and reasonably acceptable to the applicable
Borrower (which may be, or be affiliated with, any Agent or one of the Lenders)
with respect to the Accounts and Inventory components included in the U.S.
Borrowing Base, the Canadian Borrowing Base and the U.K. Borrowing Base
(provided, however, that so long as no Event of Default has occurred and is
continuing, U.S. Agent shall not require such a report more than once per
calendar year and during the continuance of an Event of Default, U.S. Agent
shall not require such a report more than once per calendar quarter), and (i)
such other information relating to the condition (financial or otherwise),
operations, prospects or business of any Obligor as from time to time may be
reasonably requested by any Agent or any Lender. Each delivery of a financial
statement pursuant to this Section 7.2 shall constitute a restatement of the
representations contained in the last two sentences of Section 6.2.
7.3 Financial Tests. Have and maintain:
(a) Tangible Net Worth - Tangible Net Worth of not less than (1) at all
times during the period commencing on the Effective Date through and including
March 31, 2004, an amount equal to $14,566,000 and (2) at all times during each
fiscal quarter thereafter, the minimum Tangible Net Worth required as of the end
of the immediately preceding fiscal quarter plus 50% of the net income of U.S.
Borrower and its Subsidiaries, on a consolidated basis (if positive), for the
period from December 31, 2003 through the last day of the fiscal quarter ending
immediately prior to the date of such calculation plus 100% of the net proceeds
realized from the issuance of any equity securities by U.S. Borrower during that
period.
(b) Funded Debt to EBITDA Ratio - a Funded Debt to EBITDA Ratio of not
greater than (1) 3.50 to 1.00 at all times during the period commencing on the
date hereof through and including June 30, 2004, (2) 3.00 to 1.00 at all times
during the period commencing on July 1, 2004 through and including September 30,
2004, and (3) 2.75 to 1.00 at all times thereafter.
(c) Fixed Charge Coverage Ratio - a Fixed Charge Coverage Ratio of not
less than (1) 1.10 to 1.00 at all times during the period commencing on the date
hereof through and including September 30, 2004 and (2) 1.25 at all times
thereafter.
7.4 Inspection. Permit each Agent and each Lender upon 3 Business Days'
prior notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its Property
in a manner consistent with applicable safety requirements and policies of
insurance, to examine its files, books and records, except classified
governmental material, legally privileged material and material subject to a
confidentiality obligation, and make and take away copies thereof, and to
discuss its affairs with its officers and accountants, all during normal
business hours and at such intervals and to such extent as any Agent may
reasonably desire; provided that such inspection does not unreasonably interfere
with such Obligor's operations.
7.5 Further Assurances. Promptly execute and deliver, at the expense of
U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case may be, any and
all other and further instruments which may be reasonably requested by any Agent
to cure any defect in the execution and delivery of any Loan Document in order
to effectuate the transactions contemplated by the Loan Documents, and in order
to grant, preserve, protect and perfect the validity and priority of the Liens
created by the Security Documents.
7.6 Books and Records. Maintain books of record and account which
permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. Maintain insurance on its Property with responsible
companies in such amounts, with such deductibles and against such risks as are
usually carried by owners of similar businesses and Properties in the same
general areas in which the applicable Obligor operates, and furnish each Agent
satisfactory evidence thereof promptly upon request. These insurance provisions
are cumulative of the insurance provisions of the Security Documents. Each Agent
shall be provided with a certificate showing coverages provided under the
policies of insurance and such policies shall be endorsed to the effect that
they will not be canceled for nonpayment of premium, reduced or affected in any
material manner without thirty (30) days' prior written notice to Agents.
7.8 Notice of Certain Matters. Give Agents written notice of the
following promptly after any executive officer of U.S. Borrower, Canadian
Borrower or U.K. Borrower shall become aware of the same:
(a) the issuance by any applicable Governmental Authority having
jurisdiction in the matter of any injunction, order or other restraint
prohibiting, or having the effect of prohibiting, the performance of this
Agreement, any other Loan Document, or the making of the Loans or the acceptance
and purchase of Bankers' Acceptances or the initiation of any litigation, or any
claim or controversy which would reasonably be expected to result in the
initiation of any such litigation, seeking any such injunction, order or other
restraint;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims in excess of $1,000,000 or which could reasonably be
expected to result in a Default hereunder; and
(c) any Event of Default or Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with the respect
thereto.
Borrowers will also notify Agents in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and
records. After the Effective Date, Borrowers will notify Agents in writing at
least 45 days prior to any Borrower's or any of their Subsidiaries' (other than
Excluded Subsidiaries and other than Foreign Subsidiaries which are not
Subsidiaries of Canadian Borrower or U.K. Borrower) acquisition of any real
Property or any material personal Property having aggregate fair market value in
excess of $2,500,000, wherever located, other than the Collateral covered by the
Security Documents (such acquisition or ownership being
herein called an "Additional Collateral Event" and the Property so acquired or
owned being herein called "Additional Collateral").
7.9 Capital Adequacy. If any Lender shall have determined that the
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable Legal Requirement
regarding capital adequacy, or any change therein after the Effective Date, or
any change in the interpretation or administration thereof after the Effective
Date by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section, after demand by such Lender
(with a copy to the appropriate Agent) as provided below, pay (subject to
Sections 11.7 and 11.17 hereof) to such Lender such additional amount or amounts
as will compensate such Lender for such reduction. The certificate of any Lender
setting forth such amount or amounts as shall be necessary to compensate it and
the basis thereof and reasons therefor shall be delivered as soon as practicable
to U.S. Borrower, Canadian Borrower or U.K. Borrower, as the case may be, and
shall be conclusive and binding, absent manifest error. U.S. Borrower, Canadian
Borrower or U.K. Borrower, as the case may be, shall pay the amount shown as due
on any such certificate within fifteen (15) Business Days after the delivery of
such certificate. In preparing such certificate, a Lender may employ such
assumptions and allocations of costs and expenses as it shall in good xxxxx xxxx
reasonable and may use any reasonable averaging and attribution method.
7.10 ERISA Information and Compliance. Promptly furnish to Agents: (i)
immediately upon receipt, a copy of any notice of complete or partial withdrawal
liability under Title IV of ERISA and any notice from the PBGC under Title IV of
ERISA of an intent to terminate or appoint a trustee to administer any Plan,
(ii) if requested by any Agent, promptly after the filing thereof with the
United States Secretary of Labor or the PBGC or the Internal Revenue Service or
any Governmental Authority having jurisdiction under Applicable Canadian Pension
Legislation, copies of each annual and other report or other information return
with respect to each Plan or any trust created thereunder, (iii) immediately
upon becoming aware of the occurrence of any "reportable event," as such term is
defined in Section 4043 of ERISA, for which the disclosure requirements of
Regulation Section 2615.3 promulgated by the PBGC have not been waived, or of
any "prohibited transaction," as such term is defined in Section 4975 of the
Code, in connection with any Plan or any trust created thereunder, a written
notice signed by an authorized officer of the applicable Borrower or the
applicable member of the Controlled Group specifying the nature thereof, what
action the applicable Borrower or the applicable member of the Controlled Group
is taking or proposes to take with respect thereto, and, when known, any action
taken by the PBGC, the Internal Revenue Service, the Department of Labor or any
other applicable Governmental Authority with respect thereto, (iv) promptly
after the filing or receiving thereof by any Borrower or any member of the
Controlled Group of any notice of
the institution of any proceedings or other actions which may result in the
termination of any Plan, in whole or in part, and (v) each request for waiver of
the funding standards or extension of the amortization periods required by
Sections 303 and 304 of ERISA or Section 412 of the Code promptly after the
request is submitted by any Borrower or any member of the Controlled Group to
the Secretary of the Treasury, the Department of Labor, the Internal Revenue
Service or any other applicable Governmental Authority. To the extent required
under applicable statutory funding requirements, each Borrower will fund, or
will cause the applicable member of the Controlled Group to fund, all current
service pension liabilities as they are incurred under the provisions of all
Plans from time to time in effect and, in addition, with respect to Plans
governed by Applicable Canadian Pension Legislation, all special payments in
connection with solvency deficiencies or going concern Unfunded Liabilities, and
comply with all applicable provisions of ERISA, in each case, except to the
extent that failure to do the same could not reasonably be expected to have a
Material Adverse Effect. Each Borrower covenants that it shall and shall cause
each member of the Controlled Group to (1) make contributions to each Plan in a
timely manner and in an amount sufficient to comply with the contribution
obligations under such Plan and the minimum funding standards requirements of
ERISA; (2) prepare and file in a timely manner all notices and reports required
under the terms of ERISA including but not limited to annual reports; and (3)
pay in a timely manner all required PBGC premiums, in each case, except to the
extent that failure to do the same could not reasonably be expected to have a
Material Adverse Effect.
7.11 Additional Security Documents. As soon as practicable and in any
event within 30 days after an Additional Collateral Event, Borrowers shall (a)
execute and deliver or cause to be executed and delivered Security Documents, in
Proper Form, in favor of the applicable Agent and duly executed by the
applicable Obligor, granting a first-priority Lien (except for Permitted Liens)
upon the applicable Additional Collateral securing all of the Canadian
Obligations (in the case of Canadian Borrower or any of its Subsidiaries), the
U.K. Obligations (in the case of U.K. Borrower or any of its Subsidiaries which
are Foreign Subsidiaries but which are not Excluded Subsidiaries) or the U.S.
Obligations (in the case of U.S. Borrower or any of its Subsidiaries which are
not Foreign Subsidiaries or Excluded Subsidiaries), except as U.S. Agent may
otherwise agree in order to limit recording taxes or similar charges based upon
the amount secured, and such other documents (including, without limitation, all
items reasonably required by Agents in connection with the applicable Security
Documents previously executed hereunder, all in Proper Form) as may be
reasonably required by Agents in connection with the execution and delivery of
such Security Documents; (b) deliver or cause to be delivered such other
documents or certificates consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as Agents may reasonably
request, and (c) pay in full all documentary stamps, filing and recording fees,
taxes and other fees and charges payable in connection with the filing and
recording of any such Security Document.
8. Negative Covenants.
U.S. Borrower, Canadian Borrower and U.K. Borrower each covenants and
agrees with Agents and the Lenders that prior to the payment of all Obligations
and the termination of all U.S. Commitments, Canadian Commitments and U.K.
Commitments it will not, and will not suffer or permit any of its Subsidiaries
to, do any of the following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit to
exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a) Borrowed
Money Indebtedness under this Agreement and the other Loan Documents and
Borrowed Money Indebtedness secured by Liens permitted by Section 8.2 hereof;
(b) the liabilities existing on the date of this Agreement and disclosed in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof, and subject to Section 8.10 hereof, all renewals, extensions
and replacements (but not increases) of any of the foregoing; (c) the Interest
Rate Risk Indebtedness; (d) purchase money indebtedness to acquire Equipment
obtained by U.S. Borrower or any of its Subsidiaries in the ordinary course of
business (or financing under leases which, in accordance with GAAP have been
recorded or should be recorded as capital leases) not exceeding $5,000,000 at
any one time outstanding, in the aggregate for all such indebtedness; (e)
purchase money indebtedness to acquire real Property obtained by U.S. Borrower
or any of its Subsidiaries (or financing under leases which, in accordance with
GAAP have been recorded or should be recorded as capital leases) not exceeding
$4,000,000 at any one time outstanding, in the aggregate for all such
indebtedness; (f) Borrowed Money Indebtedness of U.S. Borrower and its
Subsidiaries under the Export/Import Credit Facilities not exceeding $25,000,000
in the aggregate at any one time outstanding; (g) Permitted Subordinated
Indebtedness, and (h) Permitted Senior Indebtedness.
8.2 Liens. Create or suffer to exist any Lien upon any of its Property
now owned or hereafter acquired, or acquire any Property upon any conditional
sale or other title retention device or arrangement or any purchase money
security agreement; or in any manner directly or indirectly sell, assign, pledge
or otherwise transfer any of its Accounts or General Intangibles; except: (a)
Liens created pursuant to any Loan Document; (b) Permitted Liens; (c) Liens
securing Borrowed Money Indebtedness permitted under Section 8.1(d) hereof which
does not cover any Property other than the applicable purchased Equipment and
(d) Liens securing Borrowed Money Indebtedness permitted under Section 8.1(e)
hereof which does not cover any Property other than the applicable real
Property.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agents in the financial statements delivered on or
prior to the Effective Date pursuant to Section 6.2 hereof (and all renewals,
extensions and replacements--but not increases--of such obligations after the
Effective Date); (c) those liabilities permitted under Sections 8.1 or 8.2
hereof; (d) accounts payable incurred in the ordinary course of business; (e)
performance and warranty guaranties of any Borrower or any of their Subsidiaries
entered into in the ordinary course of business; and (f) other contingent
liabilities which do not relate to Borrowed Money Indebtedness not exceeding
$2,000,000 at any one time outstanding.
8.4 Mergers, Consolidations and Dispositions of Assets. In any single
transaction or series of transactions, directly or indirectly:
(a) liquidate or dissolve; provided that any Excluded Subsidiary
may liquidate, dissolve or take action to wind-up its operations
without any necessity for notice
to or consent by any Lender or any Agent and any other Subsidiary
of U.S. Borrower may liquidate, dissolve or take action to wind-up
its operations if (i) U.S. Borrower determines such action to be in
the best interests of U.S. Borrower and its Subsidiaries; (ii)
liquidating dividends are paid to U.S. Borrower or to a
wholly-owned Subsidiary of U.S. Borrower; and (iii) U.S. Borrower
gives Agents written notice of such action at least ten (10) days
prior to taking such action;
(b) be a party to any merger or consolidation unless and so long as
(i) no Default or Event of Default has occurred that is then
continuing; (ii) immediately thereafter and giving effect thereto,
no event will occur and be continuing which constitutes a Default,
(iii) if an Obligor is a party to such transaction, an Obligor is
the surviving Person; (iv) the surviving Person ratifies and
assumes each Loan Document to which any party to such merger was a
party; and (v) Agents are given at least 10 days' prior written
notice of such merger or consolidation;
(c) sell, convey or lease all or any part of its assets, except for
(i) sales of Inventory in the ordinary course of business; (ii)
sales of other Property in the ordinary course of business; (iii)
sales or other dispositions of Property outside the ordinary course
of business having a fair market value in an aggregate amount not
to exceed $5,000,000; (iv) sales or other dispositions of Property
(whether or not Collateral) expressly permitted by the other terms
of this Agreement or any Loan Document; (v) conveyances
constituting investments in Subsidiaries permitted by Section 8.8;
(vi) transfers of assets from any Subsidiary of U.K. Borrower to
U.K. Borrower or to another Subsidiary of U.K. Borrower so long as
the Liens of the Security Documents are not affected thereby and
(vii) subject to the Borrowers' compliance with Section 3.2(b),
dispositions occurring as the result of a casualty event or
condemnation, or
(d) except for Liens in favor of Agents, pledge, transfer or
otherwise dispose of any Equity Interest in any of U.S. Borrower's
Subsidiaries or any Borrowed Money Indebtedness of any of U.S.
Borrower's Subsidiaries or issue or permit any Subsidiary of U.S.
Borrower to issue any additional Equity Interest other than stock
evidencing a Permitted Investment or stock dividends (in each case,
subject to a Lien in favor of Agents to the extent required
hereby).
8.5 Redemption, Dividends and Distributions. Except as set forth on
Schedule 8.5 hereof, at any time: (a) redeem, retire or otherwise acquire,
directly or indirectly, any Equity Interest other than Equity Interests in
wholly-owned Subsidiaries or (b) make any distributions of any Property or cash
to the owner of any of the Equity Interests in any Obligor, other than, in
either case, Permitted Dividends and Permitted Investments (and the payment of
loans owing by the Chief Executive Officer and President of the U.S. Borrower
which constitute Permitted Investments by means of transfer to U.S. Borrower of
Equity Interests in and to U.S. Borrower).
8.6 Nature of Business. Change the nature of its business or enter into
any business which is substantially different from the business in which it is
presently engaged.
8.7 Transactions with Related Parties. Enter into any transaction or
agreement with any officer, director or holder of any Equity Interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources (to the
best knowledge of Borrowers, after making reasonable inquiry).
8.8 Loans and Investments. Make any loan, advance, extension of credit
or capital contribution to, or make or, except as permitted by Sections 8.4 or
8.9 hereof, have any Investment in, any Person, or make any commitment to make
any such extension of credit or Investment, except (a) Permitted Investments;
(b) normal and reasonable advances in the ordinary course of business to
officers and employees; (c) accounts receivable and accounts payable arising in
the ordinary course of business; (d) deposits in money market funds investing
exclusively in Permitted Investments; (e) Investments disclosed in the financial
statements delivered pursuant to Section 6.2; (f) Investments by any Obligor in
any other Obligor which is not a Foreign Subsidiary or an Excluded Subsidiary,
and (g) other Investments not to exceed $500,000 in the aggregate at any time.
8.9 Subsidiaries. Form, create or acquire any Subsidiary, except that
U.S. Borrower (or any of its Subsidiaries) may form, create or acquire a
wholly-owned Subsidiary so long as (a) immediately thereafter and giving effect
thereto, no event will occur and be continuing which constitutes a Default; (b)
if such Subsidiary is not a Foreign Subsidiary, (1) such Subsidiary shall
execute and deliver to each Agent a Guaranty in substantially the same form as
the Guaranties executed concurrently herewith, (2) such Subsidiary shall execute
and deliver to U.S. Agent such Security Documents as U.S. Agent may reasonably
require in order to create a valid, perfected, first priority Lien upon all of
the real and material personal Property of such Subsidiary (subject to
exceptions set forth in this Agreement) securing the U.S. Obligations and (3)
the applicable owner(s) of the Equity Interests in such Subsidiary shall execute
and deliver to U.S. Agent such Security Documents as U.S. Agent may reasonably
require in order to create a valid, perfected, first priority Lien upon all of
the issued and outstanding Equity Interests in such Subsidiary; (c) if such
Subsidiary is a Subsidiary of Canadian Borrower, (1) such Subsidiary shall
execute and deliver to Canadian Agent a Guaranty in substantially the same form
as the Guaranties executed concurrently herewith in favor of Canadian Agent, (2)
such Subsidiary shall execute and deliver to Canadian Agent such Security
Documents as Canadian Agent may reasonably require in order to create a valid,
perfected, first priority Lien upon all of the real and material personal
Property of such Subsidiary (subject to exceptions set forth in this Agreement)
securing the Canadian Obligations and (3) the applicable owner(s) of the Equity
Interests in such Subsidiary shall execute and deliver to Canadian Agent such
Security Documents as Canadian Agent may reasonably require in order to create a
valid, perfected, first priority Lien upon all of the issued and outstanding
Equity Interests in such Subsidiary securing the Canadian Obligations; (d) if
such Subsidiary is a Subsidiary of U.K. Borrower and is not an Excluded
Subsidiary, (1) such Subsidiary shall execute and deliver to U.K. Agent a
Guaranty in substantially the same form as the Guaranties executed concurrently
herewith in favor of U.K. Agent, (2) such Subsidiary shall execute and deliver
to U.K. Agent such Security Documents as U.K. Agent may reasonably require in
order to create a valid, perfected, first priority Lien upon all of the real and
material personal Property of such Subsidiary (subject to exceptions set forth
in this Agreement) securing the U.K. Obligations and (3) the applicable owner(s)
of the Equity Interests in such Subsidiary shall execute and deliver to U.K.
Agent such Security Documents as U.K. Agent may reasonably require in order to
create a valid, perfected, first priority Lien upon all of the issued and
outstanding Equity Interests in such Subsidiary securing the U.K. Obligations;
and (f) Agents are given at least 10 days' prior written notice of such
formation, creation or acquisition. Notwithstanding the foregoing, no Foreign
Subsidiary may form, create or acquire a Subsidiary which is not a Foreign
Subsidiary.
8.10 Export/Import Credit Facilities. Terminate or agree to the
termination of any Export/Import Credit Facility or amend, modify or obtain or
grant a waiver of any provision of any of any Export/Import Credit Facility if
such action could reasonably be expected to have a Material Adverse Effect
(provided that no consent of any Agent or any Bank shall be required with
respect to an amendment of the Export/Import Credit Facilities which has the
sole effect of increasing the Export/Import Credit Facilities to an aggregate
amount not greater than $25,000,000).
8.11 Organizational Documents. Amend, modify, restate or supplement any
of its Organizational Documents if such action could reasonably be expected to
have a Material Adverse Effect.
8.12 Unfunded Liabilities. Except as described on Schedule 6.11 hereto,
incur any Unfunded Liabilities after the Effective Date or allow any Unfunded
Liabilities in excess of $1,000,000, in the aggregate, to arise or exist.
8.13 Sale/Leasebacks. Enter into sale/leaseback transactions relating to
assets with a fair market value in excess of $4,000,000 in the aggregate or
enter into any sale/leaseback transaction relating to assets with a fair market
value in excess of $500,000 in any single transaction unless Borrowers shall
have demonstrated to the satisfaction of the U.S. Agent that no Default or Event
of Default could be reasonably expected to arise as a result of such
sale/leaseback transaction.
8.14 Acquisitions. Acquire (a) any real Property or any material
personal Property after the Effective Date (other than acquisitions of real or
personal Property in the ordinary course of business) unless Borrowers shall
have demonstrated to the satisfaction of the U.S. Agent on a pro forma basis
that no Default or Event of Default could be reasonably expected to arise as a
result of such sale/leaseback transaction and that, after giving effect to the
applicable acquisition, at least $5,000,000 capacity shall be available for
borrowings under the U.S. Commitments or (b) any real Property or any material
personal Property after the Effective Date (other than acquisitions of real or
personal Property in the ordinary course of business) with respect to which the
aggregate consideration in any fiscal year exceeds $5,000,000.
8.15 Negative Pledges. Except for (a) any of the Loan Documents, (b) the
Export/Import Credit Facilities, (c) customary provisions in leases, licenses,
asset sale agreements and other customary agreements not related to the Borrowed
Money Indebtedness and entered into in the ordinary course of business, and (d)
restrictions imposed by agreements governing Permitted Liens, enter into any
agreement or contract which limits or restricts in any way the granting of Liens
by U.S. Borrower or any of its Subsidiaries securing any of the Obligations.
8.16 Synthetic Repurchases of Equity or Debt. Enter into or be party
to, or make any payment under, any Synthetic Purchase Agreement unless (i) in
the case of any Synthetic Purchase Agreement related to any Equity Interest, the
payments required to be made by the Borrower or its Subsidiaries are limited to
amounts permitted to be paid under Section 8.5 hereof and (ii) in the case of
any Synthetic Purchase Agreement, the obligations of the U.S. Borrower and its
Subsidiaries thereunder are subordinated to the Obligations on terms
satisfactory to the Majority Lenders.
8.17 Property of Excluded Subsidiaries and Certain Foreign
Subsidiaries. Permit the aggregate value (based on the greater of book or market
value) of the Property owned by Excluded Subsidiaries or by Foreign Subsidiaries
of U.S. Borrower (other than Canadian Borrower, U.K. Borrower or their
Subsidiaries) to exceed $7,000,000.
8.18 Limitation on Capital Expenditures. Permit aggregate Capital
Expenditures of the U.S. Borrower and its Subsidiaries to exceed $10,000,000 in
any fiscal year.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then any Agent may (and at the
direction of the Majority Lenders, shall) do any or all of the following: (1)
without notice to U.S. Borrower, Canadian Borrower, U.K. Borrower or any other
Person, declare the U.S. Commitments, the Canadian Commitments and the U.K.
Commitments terminated (whereupon the Commitments shall be terminated) and/or
accelerate the Termination Date to a date as early as the date of termination of
the U.S. Commitments, the Canadian Commitments and the U.K. Commitments; (2)
terminate any Letter of Credit allowing for such termination, by sending a
notice of termination as provided therein and require the applicable Borrower to
provide Cover for outstanding Letters of Credit; (3) declare the principal
amount then outstanding of and the unpaid accrued interest on the Loans and
Reimbursement Obligations and all fees and all other amounts payable hereunder,
under the Notes and under the other Loan Documents to be forthwith due and
payable, whereupon such amounts shall be and become immediately due and payable,
without notice (including, without limitation, notice of acceleration and notice
of intent to accelerate), presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by U.S. Borrower, Canadian
Borrower and U.K. Borrower; provided that in the case of the occurrence of an
Event of Default with respect to any Obligor referred to in clause (f), (g) or
(h) of this Section 9.1, the U.S. Commitments, the Canadian Commitments and the
U.K. Commitments shall be automatically terminated and the principal amount then
outstanding of and unpaid accrued interest on the Loans and the Reimbursement
Obligations and all fees and all other amounts payable hereunder, under the
Notes and under the other Loan Documents shall be and become automatically and
immediately due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate), presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by U.S. Borrower, Canadian Borrower and U.K. Borrower, and (4) exercise
any or all other rights and remedies available to any Agent or any Lenders under
the Loan Documents, at law or in equity:
(a) Payments - (i) any Obligor shall fail to make any payment or
required prepayment of any installment of principal on the Loans or any
Reimbursement Obligation payable under the
Notes, this Agreement or the other Loan Documents when due or (ii) any Obligor
fails to make any payment or required payment of interest with respect to the
Loans, any Reimbursement Obligation or any other fee or amount under the Notes,
this Agreement or the other Loan Documents when due and, in the case of clause
(ii) only, such failure to pay continues unremedied for a period of two Business
Days after invoice; or
(b) Other Obligations - any Obligor shall default in the payment when
due of any principal of or interest on any Borrowed Money Indebtedness having an
outstanding principal amount of at least $3,000,000 in the aggregate (other than
the Loans and Reimbursement Obligations) and such default shall continue beyond
any applicable period of grace and shall give rise to a right on the part of the
holder of such Borrowed Money Indebtedness to accelerate such Borrowed Money
Indebtedness; or any event or condition shall occur which results in the
acceleration of the maturity of any such Borrowed Money Indebtedness or enables
(or, with the giving of notice or lapse of time or both, would enable) the
holder of any such Borrowed Money Indebtedness or any Person acting on such
holder's behalf to accelerate the maturity thereof and such event or condition
shall not be cured within any applicable period of grace; or
(c) Representations and Warranties - any representation or warranty
made or deemed made by or on behalf of any Obligor in this Agreement or any
other Loan Document or in any certificate furnished or made by any Obligor to
Agents or the Lenders in connection herewith or therewith shall prove to have
been incorrect, false or misleading in any material respect as of the date
thereof or as of the date as of which the facts therein set forth were stated or
certified or deemed stated or certified; or
(d) Affirmative Covenants - (i) default shall be made in the due
observance or performance of any of the covenants or agreements contained in
Section 7.3 hereof or (ii) default is made in the due observance or performance
of any of the other covenants and agreements contained in Section 7 hereof or
any other affirmative covenant of any Obligor contained in this Agreement or any
other Loan Document and such default continues unremedied for a period of 30
days after (x) notice thereof is given by any Agent to U.S. Borrower, to
Canadian Borrower or to U.K. Borrower or (y) such default otherwise becomes
known to any executive officer of U.S. Borrower, to Canadian Borrower or to U.K.
Borrower, whichever is earlier; or
(e) Negative Covenants - default is made in the due observance or
performance by U.S. Borrower, Canadian Borrower or U.K. Borrower of any of the
covenants or agreements contained in Section 8 of this Agreement or of any other
negative covenant of any Obligor contained in this Agreement or any other Loan
Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a receiver,
receiver-manager, interim receiver, monitor, conservator, liquidator or trustee
of any Obligor or of any of its Property is appointed by the order or decree of
any court or agency or supervisory authority having jurisdiction, and such
decree or order remains in effect for more than 90 days; or any Obligor is
adjudicated bankrupt or insolvent; or any of such Person's Property is
sequestered by court order and such order remains in effect for more than 90
days; or a petition is filed against any Obligor under any state or federal
bankruptcy, reorganization, arrangement, insolvency, readjustment or debt,
dissolution, liquidation or receivership law or any jurisdiction, whether now or
hereafter in effect, and is not dismissed within 90 days after such filing; or
(g) Voluntary Petitions or Consents - any Obligor commences a
voluntary case or other proceeding or order seeking liquidation, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or other
relief with respect to itself or its debts or other liabilities under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its Property, or consents to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
fails generally to, or cannot, pay its debts generally as they become due or
takes any corporate action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of Insolvency -
any Obligor makes an assignment for the benefit of its creditors, or admits in
writing its insolvency (including any admission of its inability to pay its
debts generally as they become due), or consents to the appointment of a
receiver, receiver-manager, interim receiver, monitor, trustee, or liquidator of
such Obligor or of all or any substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable judgment or
judgments for the payment of money exceeding, in the aggregate, $1,000,000
(exclusive of amounts covered by insurance) is rendered by any court or other
Governmental Authority against any Obligor and such Obligor does not discharge
the same or provide for its discharge in accordance with its terms, or procure a
stay of execution thereof within 30 days from the date of entry thereof; or
(j) Security Documents - any Security Document after delivery thereof,
shall cease for any reason, except to the extent permitted by the terms of this
Agreement or such Security Document, to create a valid and perfected Lien of the
first priority (subject to the Permitted Liens), required thereby on any of the
Collateral individually or in the aggregate having a fair market value in excess
of $1,000,000 purported to be covered thereby and securing that portion of the
Obligations which is therein designated as being secured, or any Obligor (or any
other Person who may have granted or purported to grant such Lien) will so state
in writing or, after the creation thereof as herein provided, Agents shall cease
to have valid, perfected, first priority Liens upon the issued and outstanding
Equity Interests in and to all Subsidiaries of U.S. Borrower to the extent
required by the terms of this Agreement; or
(k) Change of Control; Ownership of Subsidiaries - (i) any Person
other than U.S. Borrower or its Subsidiaries shall own any Equity Interest in
any Subsidiary of U.S. Borrower (other than directors' qualifying shares and
other than a 15% Equity Interest in NATCO Japan Co., Ltd. currently owned by
Persons other than U.S. Borrower or its Subsidiaries) or any Person other than
an Agent shall acquire any Lien on any Equity Interest in any Subsidiary of U.S.
Borrower; or (ii) any Change of Control shall occur; or
(l) Uninsured Loss - any Obligor shall be the subject of any uninsured
or unindemnified casualty losses exceeding, in the aggregate, $1,000,000 in any
fiscal year.
(m) Material Adverse Change - any event shall occur which could
reasonably be expected to have a Material Adverse Effect.
9.2 Right of Setoff. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, without notice to any Obligor (any such notice being expressly waived
by U.S. Borrower, Canadian Borrower, U.K. Borrower and the other Obligors), to
setoff and apply any and all deposits, whether general or special, time or
demand, provisional or final (but excluding the funds held in accounts clearly
designated as escrow or trust accounts held by U.S. Borrower, Canadian Borrower,
U.K. Borrower or any other Obligor for the benefit of Persons which are not
Affiliates of any Obligor), whether or not such setoff results in any loss of
interest or other penalty, and including without limitation all certificates of
deposit, at any time held, and any other funds or Property at any time held, and
other Borrowed Money Indebtedness at any time owing by such Lender to or for the
credit or the account of U.S. Borrower, Canadian Borrower, U.K. Borrower or any
other Obligor against any and all of the Obligations irrespective of whether or
not such Lender or any Agent will have made any demand under this Agreement, the
Notes or any other Loan Document. Should the right of any Lender to realize
funds in any manner set forth hereinabove be challenged and any application of
such funds be reversed, whether by court order or otherwise, the Lenders shall
make restitution or refund to U.S. Borrower, Canadian Borrower or U.K. Borrower
or the applicable other Obligor, as the case may be, pro rata in accordance with
their U.S. Commitments, Canadian Commitments or U.K. Commitments, as the case
may be. Each Lender agrees to promptly notify U.S. Borrower, Canadian Borrower,
U.K. Borrower and Agents after any such setoff and application, provided that
the failure to give such notice will not affect the validity of such setoff and
application. The rights of Agents and the Lenders under this Section are in
addition to other rights and remedies (including without limitation other rights
of setoff) which Agents or the Lenders may have. This Section is subject to the
terms and provisions of Sections 4.5 and 11.7 hereof. Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, any
amounts realized under this Section which constitute an asset of any Foreign
Subsidiary shall only be applied to the payment of Canadian Obligations or U.K.
Obligations.
9.3 Collateral Account. U.S. Borrower hereby agrees, in addition to
the provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to U.S. Agent an amount in
immediately available funds equal to the then aggregate amount available for
drawings under all outstanding U.S. Letters of Credit, which funds shall be held
by U.S. Agent as Cover. Canadian Borrower hereby agrees, in addition to the
provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by any Agent or by
the Majority Lenders (through any Agent), pay to Canadian Agent an amount in
immediately available funds equal to the sum of the then aggregate amount
available for drawings under all outstanding Canadian Letters of Credit plus the
unpaid principal balance of all outstanding Bankers' Acceptances, which funds
shall be held by Canadian Agent as Cover. U.K. Borrower hereby agrees, in
addition to the provisions of Section 9.1 hereof, that upon the occurrence and
during the continuance of any Event of Default, it shall, if requested by any
Agent or by the Majority Lenders (through any Agent), pay to U.K. Agent an
amount in immediately available funds equal to the then aggregate amount
available for drawings under all outstanding U.K. Letters of Credit, which funds
shall be held by U.K. Agent as Cover.
9.4 Preservation of Security for Letter of Credit Liabilities. In the
event that, following (i) the occurrence of an Event of Default and the exercise
of any rights available to any
Agent or any Lender under the Loan Documents, and (ii) payment in full of the
principal amount then outstanding of and the accrued interest on the Loans and
Reimbursement Obligations and fees and all other amounts payable hereunder and
under the Loan Documents and all other amounts secured by the Security
Documents, any Letters of Credit or Bankers' Acceptances shall remain
outstanding and undrawn upon, the applicable Agent shall be entitled to hold
(and each Borrower and each other Obligor hereby grants and conveys to Agent a
security interest in and to) all cash or other Property ("Proceeds of Remedies")
realized or arising out of the exercise of any rights available under the Loan
Documents, at law or in equity, including, without limitation, the proceeds of
any foreclosure, as collateral for the payment of any amounts due or to become
due under or in respect of such Letters of Credit and/or such Bankers'
Acceptances. Such Proceeds of Remedies shall be held for the ratable benefit of
the U.S. Lenders, the Canadian Lenders or U.K. Lenders, as the case may be. The
rights, titles, benefits, privileges, duties and obligations of the applicable
Agent with respect thereto shall be governed by the terms and provisions of this
Agreement and, to the extent not inconsistent with this Agreement, the
applicable Security Documents. The applicable Agent may, but shall have no
obligation to, invest any such Proceeds of Remedies in such manner as such
Agent, in the exercise of its sole discretion, deems appropriate. Such Proceeds
of Remedies shall be applied to Reimbursement Obligations arising in respect of
any such Letters of Credit, the payment of any Lender's obligations under any
such Letter of Credit and/or the Obligations relating to any such Bankers'
Acceptance when such Letter of Credit is drawn upon or such Bankers' Acceptance
matures, as the case may be. Nothing in this Section shall cause or permit an
increase in the maximum amount of the Obligations permitted to be outstanding
from time to time under this Agreement. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, any amounts realized
under this Section which constitute an asset of any Foreign Subsidiary shall
only be applied to the payment of Canadian Obligations or U.K. Obligations.
9.5 Currency Conversion After Maturity. At any time following the
occurrence of an Event of Default and the acceleration of the maturity of the
Obligations owed to the Canadian Lenders hereunder, the Canadian Lenders shall
be entitled to convert, with two (2) Business Days' prior notice to Canadian
Borrower, any and all or any part of the then unpaid and outstanding LIBOR
Borrowings and Base Rate Borrowings of the Canadian Borrower to Canadian Prime
Loans. Any such conversion shall be calculated so that the resulting Canadian
Prime Loans shall be the equivalent on the date of conversion of the amount of
Dollars so converted. Any accrued and unpaid interest denominated in Dollars at
the time of any such conversion shall be similarly converted to Canadian
Dollars, and such Canadian Prime Loans and accrued and unpaid interest thereon
shall thereafter bear interest in accordance with the terms hereof.
9.6 Remedies Cumulative. No remedy, right or power conferred upon any
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
10. Agents.
10.1 Appointment, Powers and Immunities. Each U.S. Lender hereby
irrevocably appoints and authorizes U.S. Agent to act as its agent hereunder,
under the U.S. Letters of Credit
and under the other Loan Documents with such powers as are specifically
delegated to U.S. Agent by the terms hereof and thereof, together with such
other powers as are reasonably incidental thereto. Each Canadian Lender hereby
irrevocably appoints and authorizes Canadian Agent to act as its agent
hereunder, under the Canadian Letters of Credit and under the other Loan
Documents with such powers as are specifically delegated to Canadian Agent by
the terms hereof and thereof, together with such other powers as are reasonably
incidental thereto. Each U.K. Lender hereby irrevocably appoints and authorizes
U.K. Agent to act as its agent hereunder, under the U.K. Letters of Credit and
under the other Loan Documents with such powers as are specifically delegated to
U.K. Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. Any Loan Documents executed in favor of any
Agent shall be held by such Agent for the ratable benefit of the applicable
Lenders. None of the Agents ("Agents" as used in this Section 10 shall include
reference to their Affiliates and their own and their Affiliates' respective
officers, shareholders, directors, employees and agents) (a) shall have any
duties or responsibilities except those expressly set forth in this Agreement,
the Letters of Credit, and the other Loan Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee or fiduciary for any
Lender; (b) shall be responsible to any Lender for any recitals, statements,
representations or warranties contained in this Agreement, the Letters of Credit
or any other Loan Document, or in any certificate or other document referred to
or provided for in, or received by any of them under, this Agreement, the
Letters of Credit or any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing, registration,
collectibility, recording, perfection, existence or sufficiency of this
Agreement, the Letters of Credit, or any other Loan Document or any other
document referred to or provided for herein or therein or any Property covered
thereby or for any failure by any Obligor or any other Person to perform any of
its obligations hereunder or thereunder, or shall have any duty to inquire into
or pass upon any of the foregoing matters; (c) shall be required to initiate or
conduct any litigation or collection proceedings hereunder or under the Letters
of Credit or any other Loan Document except to the extent requested and
adequately indemnified by the Majority Lenders; (d) shall be responsible for any
mistake of law or fact or any action taken or omitted to be taken by it
hereunder or under the Letters or Credit or any other Loan Document or any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, including, without limitation, pursuant to its
own negligence, except for its own gross negligence or willful misconduct; (e)
shall be bound by or obliged to recognize any agreement among or between any
Borrower and any Lender to which such Agent is not a party, regardless of
whether such Agent has knowledge of the existence of any such agreement or the
terms and provisions thereof; (f) shall be charged with notice or knowledge of
any fact or information not herein set out or provided to such Agent in
accordance with the terms of this Agreement or any other Loan Document; (g)
shall be responsible for any delay, error, omission or default of any mail,
telegraph, cable or wireless agency or operator, and (h) shall be responsible
for the acts or edicts of any Governmental Authority. Any Agent may employ
agents and attorneys-in-fact and none of the Agents shall be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Without in any way limiting any of the foregoing, each
Lender acknowledges that none of the Agents (nor any Issuer) shall have greater
responsibility in the operation of the Letters of Credit than is specified in
the Uniform Customs and Practice for Documentary Credits (1993 Revision,
International Chamber of Commerce Publication No. 500). In any foreclosure
proceeding concerning any Collateral, each holder of an Obligation if bidding
for its own account or for its own account and the accounts of other Lenders is
prohibited from including in
the amount of its bid an amount to be applied as a credit against the
Obligations held by it or the Obligations held by the other Lenders; instead,
such holder must bid in cash only. However, in any such foreclosure proceeding,
(i) U.S. Agent may (but shall not be obligated to) submit a bid for all U.S.
Lenders (including itself) in the form of a credit against the U.S. Obligations,
and U.S. Agent or its designee may (but shall not be obligated to) accept title
to such collateral for and on behalf of all U.S. Lenders, (ii) Canadian Agent
may (but shall not be obligated to) submit a bid for all Canadian Lenders
(including itself) in the form of a credit against the Canadian Obligations, and
Canadian Agent or its designee may (but shall not be obligated to) accept title
to such collateral for and on behalf of all Canadian Lenders and (iii) U.K.
Agent may (but shall not be obligated to) submit a bid for all U.K. Lenders
(including itself) in the form of a credit against the U.K. Obligations, and
U.K. Agent or its designee may (but shall not be obligated to) accept title to
such collateral for and on behalf of all U.K. Lenders.
10.2 Reliance. Each Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for any
Borrower), independent accountants and other experts selected by such Agent.
None of the Agents shall be required in any way to determine the identity or
authority of any Person delivering or executing the same. As to any matters not
expressly provided for by this Agreement, the Letters of Credit, or any other
Loan Document, each Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with instructions
of the Majority Lenders, and any action taken or failure to act by U.S. Agent
pursuant thereto shall be binding on all of the U.S. Lenders, any action taken
or failure to act by Canadian Agent pursuant thereto shall be binding on all of
the Canadian Lenders and any action taken or failure to act by U.K. Agent
pursuant thereto shall be binding on all of the U.K. Lenders. Pursuant to
written instructions of the Majority Lenders, the Agents shall have the
authority to execute releases of the Security Documents on behalf of the Lenders
without the joinder of any Lender. If any order, writ, judgment or decree shall
be made or entered by any court affecting the rights, duties and obligations of
any Agent under this Agreement or any other Loan Document, then and in any of
such events such Agent is authorized, in its sole discretion, to rely upon and
comply with such order, writ, judgment or decree which it is advised by legal
counsel of its own choosing is binding upon it under the terms of this
Agreement, the relevant Loan Document or otherwise; and if such Agent complies
with any such order, writ, judgment or decree, then it shall not be liable to
any Lender or to any other Person by reason of such compliance even though such
order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
10.3 Defaults. None of the Agents shall be deemed to have knowledge of
the occurrence of a Default (other than the non-payment of principal of or
interest on Loans or Reimbursement Obligations) unless such Agent has received
notice from a Lender or a Borrower specifying such Default and stating that such
notice is a "Notice of Default." In the event that any Agent receives such a
Notice of Default, such Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). Each Agent
shall (subject to Section 10.7 hereof) take such action with respect to such
Notice of Default as shall be directed by the Majority Lenders and within its
rights under the Loan Documents and at law or in equity, provided that, unless
and until an Agent shall have received such directions,
such Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, permitted hereby with respect to such Notice of
Default as it shall deem advisable in the best interests of the Lenders and
within its rights under the Loan Documents, at law or in equity.
10.4 Material Written Notices. In the event that any Agent receives any
written notice of a material nature from any Borrower or any Obligor under the
Loan Documents, such Agent shall promptly inform each of the Lenders thereof.
10.5 Rights as a Lender. With respect to their U.S. Commitments,
Canadian Commitments or U.K. Commitments, as the case may be, and the
Obligations, each of Xxxxx Fargo, HSBC Canada and HSBC U.K., in its capacity as
a Lender hereunder, shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting in its agency
capacity, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include each Agent in its individual capacity. Each Agent may
(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust, letter of credit,
agency or other business with any Borrower (and any of their Affiliates) as if
it were not acting as an Agent, and each Agent may accept fees and other
consideration from any Borrower (in addition to the fees heretofore agreed to
between any Borrower and any Agent) for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
10.6 Indemnification. The Canadian Lenders, the U.S. Lenders and U.K.
Lenders, respectively, agree to indemnify Canadian Agent, U.S. Agent and U.K.
Agent, respectively (to the extent not reimbursed under Section 2.2(c), Section
11.3 or Section 11.4 hereof, but without limiting the obligations of any
Borrower under said Sections 2.2(c), 11.3 and 11.4), ratably in accordance with
the sum of the applicable Lenders' respective U.S. Commitments, Canadian
Commitments, U.K. Commitments and Term Loans, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever, REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES,
which may be imposed on, incurred by or asserted against the applicable Agent in
any way relating to or arising out of this Agreement, the Letters of Credit or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses which any Borrower is obligated to
pay under Sections 2.2(c), 11.3 and 11.4 hereof, interest, penalties, attorneys'
fees and amounts paid in settlement, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified. The obligations
of the Lenders under this Section 10.6 shall survive the termination of this
Agreement and the repayment of the Obligations.
10.7 Non-Reliance on Agents and Other Lenders. Each Lender agrees that
it has received current financial information with respect to each Borrower and
each other Obligor and that it has, independently and without reliance on any
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis of
each Borrower and each other Obligor and decision to enter into this
Agreement and that it will, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. None of the Agents shall be required to keep itself informed as to
the performance or observance by any Obligor of this Agreement, the Letters of
Credit or any of the other Loan Documents or any other document referred to or
provided for herein or therein or to inspect the properties or books of any
Obligor. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by an Agent hereunder, under
the Letters of Credit or the other Loan Documents, none of the Agents shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of any
Obligor (or any of their affiliates) which may come into the possession of any
Agent.
10.8 Failure to Act. Except for action expressly required of an Agent
hereunder, under the Letters of Credit or under the other Loan Documents, each
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations under Section
10.6 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor U.S. Agent, Canadian Agent or U.K. Agent, as the case
may be, as provided below, U.S. Agent, Canadian Agent and U.K. Agent,
respectively, may resign at any time by giving notice thereof to the U.S.
Lenders, the Canadian Lenders and U.K. Lenders, respectively, and to U.S.
Borrower, Canadian Borrower and U.K. Borrower, respectively. Any Agent may be
removed at any time with or without cause by the Majority Lenders; provided,
that such Agent shall continue as U.S. Agent, Canadian Agent or U.K. Agent, as
the case may be, until such time as any successor shall have accepted
appointment hereunder as U.S. Agent, Canadian Agent or U.K. Agent, as the case
may be. Upon any such resignation or removal, (i) the Majority Lenders without
the consent of any Borrower shall have the right to appoint a successor U.S.
Agent, Canadian Agent or U.K. Agent, as the case may be, so long as such
successor U.S. Agent , Canadian Agent or U.K. Agent, as the case may be, is also
a Lender at the time of such appointment and (ii) the Majority Lenders shall
have the right to appoint a successor U.S. Agent, Canadian Agent or U.K. Agent,
as the case may be, that is not a Lender at the time of such appointment so long
as Borrowers consent to such appointment (which consent shall not be
unreasonably withheld). If no successor U.S. Agent, Canadian Agent or U.K.
Agent, as the case may be, shall have been so appointed by the Majority Lenders
and accepted such appointment within 30 days after the retiring U.S. Agent's,
Canadian Agent's or U.K. Agent's, as the case may be, giving of notice of
resignation or the Majority Lenders' removal of the retiring U.S. Agent,
Canadian Agent or U.K. Agent, as the case may be, then the retiring Agent may,
on behalf of the applicable Lenders, appoint a successor U.S. Agent, Canadian
Agent or U.K. Agent, as the case may be, without the necessity of any consent on
the part of any Borrower or any Lender. Any successor U.S. Agent shall be a bank
which has an office in the United States and a combined capital and surplus of
at least $250,000,000, any successor Canadian Agent shall be a bank which has an
office in Canada and a combined capital and surplus of at least C$250,000,000
and any successor U.K. Agent shall be a bank which has an office in the United
Kingdom and a combined capital and surplus of at least (pound)100,000,000. Upon
the acceptance of any appointment as U.S. Agent, Canadian Agent or U.K. Agent,
as the case may be, hereunder by a successor Agent, such successor Agent shall
thereupon 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 and under any other Loan Documents. Such
successor Agent shall promptly specify by notice to Borrowers its Principal
Office referred to in Section 3.1 and Section 4 hereof. After any retiring
Agent's resignation or removal hereunder as an Agent, the provisions of this
Section 10 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agents or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
any Agent. The relationship between the Lenders, on the one hand, and any Agent,
on the other, is and shall be that of principals and agent only, and nothing in
this Agreement or any of the other Loan Documents shall be construed to
constitute any Agent as trustee or other fiduciary for any Lender or to impose
on any Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.
10.11 Authority of Agent. Each Lender acknowledges that the rights and
responsibilities of each Agent under this Agreement and the Loan Documents with
respect to any action taken by such Agent or the exercise or non-exercise by any
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement and/or the other Loan
Documents shall, as between such Agent and the Lenders, be governed by this
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between such Agent and the Obligors, such Agent
shall be conclusively presumed to be acting as agent for the applicable Lenders
with full and valid authority so to act or refrain from acting; and each Obligor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
10.12 Syndications Agent. Comerica Bank, in its capacity as Syndications
Agent, shall have no rights, powers, duties, obligations or liabilities under
this Agreement or any of the other Loan Documents, but to the extent that for
any reason any Person makes a claim against Comerica Bank in its capacity as
Syndications Agent and not as a Lender the indemnification provisions in
Sections 10.6 and 11.4 shall apply in connection with such claim as if Comerica
Bank was an Agent under this Agreement.
11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default shall be a
waiver of any other Default or Event of Default. No failure on the part of any
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
11.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telegraph, telecopy (confirmed
by mail), cable or other writing and telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (or provided for in an Assignment and
Acceptance); or, as to any party hereto, at such other address as shall be
designated by such party in a notice (given in accordance with this Section) (i)
as to any Borrower, to Agents, (ii) as to U.S. Agent, to U.S. Borrower and to
each U.S. Lender, (iii) as to Canadian Agent, to Canadian Borrower and to each
Canadian Lender, (iv) as to U.K. Agent, to U.K. Borrower and to each U.K.
Lender, (v) as to any U.S. Lender, to U.S. Borrower and Agents, (vi) as to any
Canadian Lender, to Canadian Borrower and Agents and (vii) as to any U.K.
Lender, to U.K. Borrower and Agents. Except as otherwise provided in this
Agreement, all such notices or communications shall be deemed to have been duly
given when (a) transmitted by telecopier or delivered to the telegraph or cable
office, (b) personally delivered (c) one Business Day after deposit with an
overnight mail or delivery service, postage prepaid or (d) three Business Days'
after deposit in a receptacle maintained by the United States Postal Service or
Canada Post or the official postal service of the United Kingdom, as the case
may be, postage prepaid, registered or certified mail, return receipt requested,
in each case given or addressed as aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Bankers' Acceptances ever accepted and purchased or any Letter of Credit ever
issued, Borrowers shall pay or reimburse within 10 Business Days after written
demand (a) (i) U.S. Agent for paying the reasonable fees and expenses of legal
counsel to U.S. Agent in the United States, in Canada and in the United Kingdom,
(ii) Canadian Agent for paying the reasonable fees and expenses of legal counsel
to Canadian Agent in Canada and (iii) U.K. Agent for paying the reasonable fees
and expenses of legal counsel to U.K. Agent in the United Kingdom, in connection
with the preparation, negotiation, execution and delivery of this Agreement
(including the exhibits and schedules hereto), the Security Documents and the
other Loan Documents and the making of the Loans and the acceptance and purchase
of Bankers' Acceptances and the issuance of Letters of Credit hereunder, and any
modification, supplement or waiver of any of the terms of this Agreement, the
Letters of Credit or any other Loan Document; (b) any Agent for any reasonable
and customary search fees, collateral audit fees and appraisal fees; (c) any
Agent for reasonable out-of-pocket expenses incurred in connection with the
preparation, documentation, administration and syndication of the Loans or any
of the Loan Documents (including, without limitation, the advertising,
marketing, printing, publicity, duplicating, mailing and similar expenses) of
the Loans and Letter of Credit Liabilities; (d) Agent for paying all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or
revenue authority in respect of this Agreement, any Letter of Credit or any
other Loan Document or any other document referred to herein or therein; (e)
any Agent for paying all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection of
any Lien contemplated by this Agreement, any Security Document or any document
referred to herein or therein; and (f) following the occurrence and during the
continuation of an Event of Default, any Lender or any Agent for paying all
amounts reasonably expended, advanced or incurred by such Lender or such Agent
to satisfy any obligation of any Obligor under this Agreement or any other Loan
Document, to protect the Collateral, to collect the Obligations or to enforce,
protect, preserve or defend the rights of the Lenders or Agents under this
Agreement or any other Loan Document, including, without limitation, fees and
expenses incurred in connection with such Lender's or such Agent's participation
as a member of a creditor's committee in a case commenced under the Bankruptcy
Code or the Insolvency Xxx 0000 (England and Wales) or other similar law, fees
and expenses incurred in connection with lifting the automatic stay prescribed
in Section 362 of the Bankruptcy Code or the Insolvency Xxx 0000 (England and
Wales) and fees and expenses incurred in connection with any action pursuant to
Section 1129 of the Bankruptcy Code or the Insolvency Act 1986 (England and
Wales) and all other reasonable and customary out-of-pocket expenses incurred by
such Lender or such Agent in connection with such matters, together with
interest thereon at the Past Due Rate applicable to U.S. Loans on each such
amount from the due date until the date of reimbursement to such Lender or such
Agent.
11.4 Indemnification. Borrowers, jointly and severally, shall indemnify
each Agent, each Lender and each affiliate thereof and their respective
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages to which any of them
may become subject, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
NEGLIGENCE OF ANY INDEMNIFIED PARTIES, insofar as such losses, liabilities,
claims or damages arise out of or result from any (i) actual or proposed use by
any Borrower of the proceeds of any extension of credit (whether a Loan, a
Bankers' Acceptance or a Letter of Credit) by any Lender hereunder; (ii) breach
by any Obligor of this Agreement or any other Loan Document; (iii) violation by
any Obligor of any Legal Requirement; or (iv) investigation, litigation or other
proceeding relating to any of the foregoing, and Borrowers, jointly and
severally, shall reimburse each Agent, each Lender, and each Affiliate thereof
and their respective directors, officers, employees and agents, upon demand for
any reasonable and customary expenses (including reasonable and customary legal
fees) incurred in connection with any such investigation or proceeding;
provided, however, that none of the Borrowers shall have any obligations
pursuant to this Section with respect to any losses, liabilities, claims,
damages or expenses incurred by the Person seeking indemnification by reason of
the gross negligence or willful misconduct of that Person or with respect to any
disputes between or among any of Agents, Lenders and Issuers. Nothing in this
Section is intended to limit the obligations of any Borrower under any other
provision of this Agreement. Each Agent and each Lender, respectively, shall
indemnify Borrowers and hold Borrowers harmless from and against the gross
negligence or willful misconduct of such Agent or such Lender, as the case may
be. Nothing in this Section shall render Canadian Borrower or U.K. Borrower
liable in respect of the U.S. Obligations. In the case of any indemnification
hereunder, the applicable Agent or the respective Lender, as appropriate, shall
give written notice to the applicable Borrower of any such claim or demand being
made against an indemnified person and the applicable Borrower shall have the
non-exclusive right to join in the defense against any such
claim or demand, provided that if such Borrower provides a defense, the
indemnified person shall bear its own cost of defense unless there is a conflict
of interests between such Borrower and such indemnified person. No indemnified
person may settle any claim to be indemnified without the consent of the
applicable Borrower, such consent not to be unreasonably withheld or delayed.
11.5 Amendments, Etc. No amendment or modification of this Agreement,
the Notes or any other Loan Document shall in any event be effective against any
Borrower or any other Obligor party thereto unless the same shall be agreed or
consented to in writing by such Person. No amendment, modification or waiver of
any provision of this Agreement, the Notes or any other Loan Document, nor any
consent to any departure by any Obligor therefrom, shall in any event be
effective against the Lenders unless the same shall be agreed or consented to in
writing by the Majority Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, modification, waiver or consent shall,
unless in writing and signed by each Lender affected thereby, do any of the
following: (a) increase any U.S. Commitments, Canadian Commitments or U.K.
Commitments of any of the Lenders (or reinstate any termination or reduction of
the U.S. Commitments, Canadian Commitments or U.K. Commitments), or subject any
of the Lenders to any additional obligations; (b) reduce the principal of, or
interest on, any Loan, Reimbursement Obligation, fee or other amount due
hereunder; (c) postpone or extend the Revolving Loan Maturity Date, the Term
Loan Maturity Date, the Termination Date, the Availability Period or any
scheduled date fixed for any payment of principal of, or interest on, any Loan,
Reimbursement Obligation, fee or other sum to be paid hereunder or waive any
Event of Default described in Section 9.1(a) hereof; (d) change the percentage
of any of the U.S. Commitments, Canadian Commitments or U.K. Commitments, as the
case may be, or of the aggregate unpaid principal amount of Obligations, or the
percentage of Lenders, which shall be required for the Lenders or any of them to
take any action under this Agreement; (e) change any provision contained in
Sections 2.2(c), 7.9, 11.3 or 11.4 hereof or this Section 11.5; (f) release any
Person from liability under a Guaranty or release all or substantially all of
the security for the Obligations or release Collateral (exclusive of Collateral
with respect to which any Agent is obligated to provide a release pursuant to
this Agreement or any of the other Loan Documents or by law) in any one (1)
calendar year ascribed an aggregate value on the most recent financial
statements of the applicable Borrower delivered to Agents in excess of
$1,000,000; (g) increase any of the fixed percentages to be multiplied by the
aggregate amounts of the components comprising the U.S. Borrowing Base, the
Canadian Borrowing Base or U.K. Borrowing Base that are described in (i) and
(ii) of the definition of the U.S. Borrowing Base, the Canadian Borrowing Base
or U.K. Borrowing Base herein, and (h) modify the provisions of Sections 4.1(b)
or 4.2 hereof regarding pro rata application of amounts after an Event of
Default shall have occurred and be continuing. Notwithstanding anything in this
Section 11.5 to the contrary, no amendment, modification, waiver or consent
shall be made with respect to Section 10 without the consent of U.S. Agent to
the extent it affects U.S. Agent, as U.S. Agent or Canadian Agent to the extent
it affects Canadian Agent, as Canadian Agent or U.K. Agent to the extent it
affects U.K. Agent, as U.K. Agent.
11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agents and the Lenders and their respective successors and assigns;
provided, however, that, except as permitted by Section 8.4 hereof, no Borrower
may assign or transfer any of its rights or obligations hereunder without the
prior written consent of all of the Lenders, and any such assignment or transfer
without such consent shall be null and void. Each Lender may sell participations
to any Person in all or part of any Loan or Bankers' Acceptance, or all or part
of its Notes, U.S. Commitments, Canadian Commitments or U.K. Commitments, as the
case may be, or interests in Letters of Credit or Bankers' Acceptances, in which
event, without limiting the foregoing, the provisions of the Loan Documents
shall inure to the benefit of each purchaser of a participation; provided,
however, the pro rata treatment of payments, as described in Section 4.2 hereof
and rights to compensation under Section 3.3 hereof, shall be determined as if
such Lender had not sold such participation. No Lender that sells one or more
participations to any Person shall be relieved by virtue of such participation
from any of its obligations to Borrowers under this Agreement. In the event any
Lender shall sell any participation, such Lender shall retain the sole right and
responsibility to enforce the obligations of Borrowers hereunder, including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement other than amendments, modifications or
waivers with respect to (i) any fees payable hereunder to the Lenders, (ii) the
amount of principal or the rate of interest payable on, or the dates fixed for
the scheduled repayment of principal of, any of the Obligations and (iii) the
release of the Liens on all or substantially all of the Collateral.
(b) Each U.S. Lender may assign to one or more U.S. Lenders or any
other Person all or a portion of its interests, rights and obligations under
this Agreement; provided, however, that (i) the aggregate amount of the U.S.
Commitments and Term Loans of the assigning U.S. Lender subject to each such
assignment shall in no event be less than $3,000,000 and (ii) other than in the
case of an assignment to another U.S. Lender (that is, at the time of the
assignment, a party hereto) or to a Lender Affiliate of such U.S. Lender or to a
Federal Reserve Bank, Agents and, so long as no Event of Default shall have
occurred and be continuing, U.S. Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld. Each Canadian Lender
may assign to one or more Canadian Lenders or any other Person all or a portion
of its interests, rights and obligations under this Agreement; provided,
however, that (i) the aggregate amount of the Canadian Commitments of the
assigning Canadian Lender subject to each such assignment shall in no event be
less than $3,000,000 and (ii) other than in the case of an assignment to another
Canadian Lender (that is, at the time of the assignment, a party hereto) or to a
Lender Affiliate of such Canadian Lender, Agents and, so long as no Event of
Default shall have occurred and be continuing, Canadian Borrower must each give
its prior written consent, which consents shall not be unreasonably withheld.
Each U.K. Lender may assign to one or more U.K. Lenders or any other Person all
or a portion of its interests, rights and obligations under this Agreement;
provided, however, that (x) the aggregate amount of the U.K. Commitments of the
assigning U.K. Lender subject to each such assignment shall in no event be less
than $3,000,000 and (y) other than in the case of an assignment to another U.K.
Lender (that is, at the time of the assignment, a party hereto) or to a Lender
Affiliate of such U.K. Lender, Agents and, so long as no Event of Default shall
have occurred and be continuing, U.K. Borrower must each give its prior written
consent, which consents shall not be unreasonably withheld. After giving effect
to any assignment (other than an assignment of all of the
commitments and Loans of the assigning Lender), the assigning Lender shall
have commitments and Loans aggregating at least $3,000,000 unless otherwise
agreed to by the U.S. Borrower and the U.S. Agent. As a condition precedent
to any such assignment, the parties to each such assignment shall execute and
deliver to the applicable Agent, for its acceptance an Assignment and Acceptance
in substantially the form of Exhibit E hereto (each an "Assignment and
Acceptance") with blanks appropriately completed, together with any Note or
Notes subject to such assignment and a processing and recording fee of $3,000
paid by the assignee (for which Borrowers will have no liability). Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (B) the Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto except in respect of provisions of this Agreement which survive payment
of the Obligations and termination of the U.S. Commitments, Canadian Commitments
or U.K. Commitments, as the case may be). Notwithstanding anything contained in
this Agreement to the contrary, any Lender may at any time assign all or any
portion of its rights under this Agreement and the other Loan Documents as
collateral to a Federal Reserve Bank; provided that no such assignment shall
release such Lender from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant thereto; (ii) such Lender assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any Obligor or the performance or
observance by any Borrower or any Obligor of any of its obligations under this
Agreement or any of the other Loan Documents to which it is a party or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements most recently delivered under either Section 6.2 or Section
7.2 hereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon any
Agent, such Lender assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents; (v) such assignee appoints and authorizes U.S. Agent,
Canadian Agent or U.K. Agent, as the case may be, to take such action as agent
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all obligations that by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(d) The entries in the records of each applicable Agent as to each
Assignment and Acceptance delivered to it and the names and addresses of the
Lenders and the U.S. Commitments, Canadian Commitments or U.K. Commitments of,
and principal amount of the Obligations owing to, each Lender from time to time
shall be conclusive, in the absence of manifest error, and Obligors, Agents and
the Lenders may treat each Person the name of which is recorded in the books and
records of the applicable Agent as a Lender hereunder for all purposes of this
Agreement and the other Loan Documents.
(e) Upon the applicable Agent's receipt of an Assignment and
Acceptance executed by an assigning Lender and the assignee thereunder, together
with any Note or Notes subject to such assignment and the written consent to
such assignment (to the extent consent is required), such Agent shall, if such
Assignment and Acceptance has been completed with blanks appropriately filled,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in its records and (iii) give prompt notice thereof to the applicable
Borrower. Within five Business Days after receipt of notice, the applicable
Borrower, at its own expense, shall execute and deliver to the applicable Agent
new Notes payable to the order of such assignee in the appropriate amounts and,
if the assigning Lender has retained U.S. Commitments, Canadian Commitments or
U.K. Commitments, as the case may be, or Term Loans hereunder, new Notes to the
order of the assigning Lender in the appropriate amounts. Such new Notes shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in the forms required hereunder. Thereafter, the replaced Notes
shall be surrendered to the applicable Agent by the applicable Lender or
Lenders, marked renewed and substituted and the originals thereof delivered to
the applicable Borrower (with copies to be retained by the applicable Agent).
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.6, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to any Borrower furnished to such Lender by or on behalf of
any Borrower; provided such Person agrees to maintain the confidentiality of
such information in accordance with Section 11.19.
11.7 Limitation of Interest. U.S. Borrower, U.K. Borrower, U.S. Lenders
and U.K. Lenders intend to strictly comply with all applicable usury laws of the
United States and Texas (or the usury laws of any jurisdiction, including Canada
and the United Kingdom, whose usury laws are deemed to apply to the Notes or any
other Loan Documents despite the intention and desire of the parties to apply
the usury laws of the State of Texas). Canadian Borrower and the Canadian
Lenders intend to strictly comply with all applicable usury laws in effect in
Canada (or the usury laws of any jurisdiction, including the State of Texas,
whose usury laws are deemed to apply to the Notes or any other Loan Documents
despite the intention and desire of the parties to apply the usury laws in
effect in Canada). Accordingly, the provisions of this Section 11.7 shall govern
and control over every other provision of this Agreement or any other Loan
Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls. As used in this Section, the term
"interest" includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread during the full term of the
Obligations. In no event shall Borrowers or any other Person be obligated to
pay, or any Agent, any Issuer or any Lender have any right or privilege to
reserve, receive or retain, (a) any interest in excess of the maximum amount of
nonusurious interest permitted under applicable laws or (b) total interest in
excess of the amount which such Person could lawfully have contracted for,
reserved, received, retained or charged had the interest been calculated for the
full term of the Obligations at the Ceiling Rate. None of the terms and
provisions contained in this Agreement or in any other Loan Document (including,
without limitation, Section 9.1 hereof) which directly or indirectly relate to
interest shall ever be construed without reference to this Section 11.7, or be
construed to create a contract to pay for the use, forbearance or detention of
money at an interest rate in excess of the Ceiling Rate. If the term of any
Obligation is shortened by reason of acceleration of maturity as a result of any
Default or by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason any Agent, any Issuer or any
Lender at any time, including but not limited to, the stated maturity, is owed
or receives (and/or has received) interest in excess of interest calculated at
the Ceiling Rate, then and in any such event all of any such excess interest
shall be canceled automatically as of the date of such acceleration, prepayment
or other event which produces the excess, and, if such excess interest has been
paid to such Person, it shall be credited pro tanto against the then-outstanding
principal balance of the applicable Borrower's obligations to such Person,
effective as of the date or dates when the event occurs which causes it to be
excess interest, until such excess is exhausted or all of such principal has
been fully paid and satisfied, whichever occurs first, and any remaining balance
of such excess shall be promptly refunded to its payor.
11.8 Survival. The obligations of Borrowers under Sections 2.2(c),
2.2(d), 7.9, 11.3 and 11.4 hereof and all other obligations of Borrowers in any
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of the
Lenders under Sections 4.1(d), 10.6, 11.7, 11.13, 11.18 and 11.19 hereof, shall,
notwithstanding anything herein to the contrary, survive the repayment of the
Loans and Reimbursement Obligations and the termination of the U.S. Commitments,
the Canadian Commitments, the U.K. Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED) THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME
TO TIME IN EFFECT; PROVIDED, HOWEVER, THAT, EXCEPT AS MAY BE REQUIRED UNDER
APPLICABLE
LAWS, THE USURY LAWS OF THE STATE OF TEXAS OR THE UNITED STATES OF AMERICA
SHALL NOT APPLY TO LOANS MADE TO AND BANKERS ACCEPTANCES ACCEPTED IN CANADA
BY CANADIAN LENDERS DRAWN BY CANADIAN BORROWER, BUT RATHER THE USURY LAWS IN
EFFECT IN CANADA SHALL GOVERN IN SUCH CONTEXT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Loan Document shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan Document shall not
be affected or impaired thereby.
11.13 Tax Forms; Net Payments.
(a) Each U.S. Lender which is organized under the laws of a
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such U.S. Lender hereunder and from time to time thereafter
if requested by U.S. Borrower or U.S. Agent, provide U.S. Agent and U.S.
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying as to such U.S. Lender's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to such U.S. Lender hereunder or other documents satisfactory to such
U.S. Lender, U.S. Borrower and U.S. Agent indicating that all payments to be
made to such U.S. Lender hereunder are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an applicable tax treaty.
Unless U.S. Borrower and U.S. Agent shall have received such forms or such
documents indicating that payments to such U.S. Lender hereunder are not subject
to United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, U.S. Borrower and U.S. Agent shall be entitled to
withhold taxes from such payments at the applicable statutory rate.
(b) Each Canadian Lender is not a non-resident of Canada for purposes
of the Income Tax Act (Canada).
(c) Each U.K. Lender is a Qualifying Lender. In this Section 11.13(c),
"Qualifying Lender" means (a) a Lender which is within the charge to U.K.
corporation tax in respect of, and beneficially entitled to, a payment of
interest on a loan made by a person that was a bank for the purposes of section
349 of the Income and Corporation Taxes Act 1988 (as currently defined in
section 840A of the Income and Corporation Taxes Act) at the time the loan was
made, or (b) a Lender which is, on the date a payment of interest falls due
hereunder, resident (as defined in the appropriate double taxation agreement) in
a country with which the U.K. has a double taxation agreement giving residents
of that country exemption from U.K. taxation on interest and does not carry on a
business in the U.K. through a permanent establishment with which the payment is
effectively connected.
(d) Each U.K. Lender shall (i) promptly after the date hereof or
promptly after the date of an Assignment and Acceptance pursuant to which it
became a Lender and (ii) from time to time thereafter upon the obsolescence or
expiration of any previously delivered form or certificate (but only so long as
such Lender remains lawfully able to do so) provide the
Borrowers and the Agents with any form or certificate that is required by any
taxing authority, or other such forms as shall be appropriate to establish,
that such Lender is (y) exempt from Home Jurisdiction Withholding Taxes on
payments pursuant to this Agreement or any other Loan Document. Each U.K. Lender
represents and warrants that such information is true and complete in all
material respects as of the date it is delivered. Each such Lender shall
promptly notify the Borrowers and the Agents if, because of any change in the
jurisdiction of organization or the principle office of such Lender, (A) it is
required to withdraw or cancel any form or certificate previously submitted by
it or any form or certificate has otherwise become ineffective or inaccurate or
(B) payments to it are or will be subject to withholding of any Home
Jurisdiction Withholding Tax to a greater or lesser extent than the extent to
which payments to it pursuant to this Agreement, the Notes or any other Loan
Document were previously subject.
(e) If a Lender shall receive a refund of any Taxes paid by a Borrower
pursuant to this Agreement by reason of the fact that such Taxes were not
correctly or legally asserted, such Lender shall within 90 days after receipt of
such refund pay to such Borrower the amount of such refund along with any
interest actually received by such Lender thereon, if any; provided, however,
that such payments shall be required only to the extent any Lender can
determine, in its good faith judgment, that such refunds are attributable to
payments made by or on behalf of such Borrower; and provided, further, that no
Lender shall have any obligation under this Agreement to claim or otherwise seek
to obtain any such refund, but agrees to use reasonable efforts to assist a
Borrower in doing so.
11.14 Interest Act (Canada). Whenever interest is calculated on the
basis of a year of 360 or 365 days, for the purposes of the Interest Act
(Canada), the yearly rate of interest which is equivalent to the rate payable
hereunder is the rate payable multiplied by the actual number of days in the
year and divided by 360 or 365, as the case may be. All interest will be
calculated using the nominal rate method and not the effective rate method and
the deemed reinvestment principle shall not apply to such calculations.
11.15 Judgment Currency. The obligation of each Borrower to make
payments on any Obligation to the Lenders or to any Agent hereunder in any
currency (the "first currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency (the "second currency") except to the extent to which such tender
or recovery shall result in the effective receipt by the applicable Lender or
the applicable Agent of the full amount of the first currency payable, and
accordingly the primary obligation of each Borrower shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in the
second currency of the amount (if any) by which such effective receipt shall
fall short of the full amount of the first currency payable and shall not be
affected by a judgment being obtained for any other sum due hereunder.
11.16 Conflicts Between This Agreement and the Other Loan Documents. In
the event of any conflict between the terms of this Agreement and the terms of
any of the other Loan Documents, the terms of this Agreement shall control.
11.17 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 2.2(d), 3.3(c) or 7.9 notwithstanding:
(1) No Borrower shall be required to pay to any Lender
reimbursement or indemnification with regard to any costs or expenses
described in such Sections, unless such Lender notifies the applicable
Borrower of such costs or expenses within 90 days after the date paid
or incurred;
(2) none of the Lenders shall be permitted to pass through to
any Borrower charges and costs under such Sections on a discriminatory
basis (i.e., which are not also passed through by such Lender to other
customers of such Lender similarly situated where such customer is
subject to documents providing for such pass through); and
(3) if any Lender elects to pass through to any Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time, the
applicable Borrower may, within 60 days after the date of such event
and so long as no Default shall have occurred and be continuing, elect
to terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination such Borrower shall (i) if Agents
and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender
through such date of termination or (ii) have arranged for another
financial institution approved by Agents (such approval not to be
unreasonably withheld or delayed) as of such date, to become a
substitute Lender for all purposes under this Agreement in the manner
provided in Section 11.6; provided further that, prior to substitution
for any Lender, the applicable Borrower shall have given written notice
to Agents of such intention and the Lenders shall have the option, but
no obligation, for a period of 60 days after receipt of such notice, to
increase their U.S. Commitments, Canadian Commitments or U.K.
Commitments, as the case may be, in order to replace the affected
Lender in lieu of such substitution.
11.18 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
11.19 Confidentiality. Each of the Agents, Xxxxx Fargo, HSBC Canada,
HSBC U.K. 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, to (i) any actual or prospective assignee of or participant in any of
its rights or obligations under this Agreement so long as such assignee or
participant agrees to be bound by confidentiality provisions substantially
similar to this Section or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to any Borrower (or any
Subsidiary of a Borrower) so long as such counterparty (and, if applicable, its
advisors) agrees to be bound by confidentiality provisions substantially similar
to this Section, (g) with the consent of the applicable Borrower or (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section or (ii) becomes available to any Agent, Xxxxx Fargo,
HSBC Canada, HSBC U.K. or any Lender on a nonconfidential basis from a source
other than a Borrower or a Subsidiary of a Borrower. For the purposes of this
Section, "Information" means all information received from a Borrower (or any
Subsidiary of a Borrower) relating to such Borrower (or such Subsidiary) or its
business, other than any such information that is available to any Agent, Xxxxx
Fargo, HSBC Canada, HSBC U.K. or any Lender on a nonconfidential basis prior to
such disclosure; provided that, in the case of information received after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 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.
11.20 USA Patriot Act Notice. Each Lender hereby notifies the Borrowers
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "Act"), it is required to
obtain, verify and record information that identifies the Borrowers, which
information includes the names and addresses of the Borrowers and other
information that will allow such Lender to identify the Borrowers in accordance
with the Act.
11.21 Amendment and Restatement. This Agreement amends and restates in
entirety that certain Loan Agreement dated March 16, 2001 executed by and among
the Borrowers, The Chase Manhattan Bank, as U.S. Agent, Royal Bank of Canada, as
Canadian Agent, Chase Manhattan International Limited, as U.K. Agent, and
certain lenders therein named, as the same may have been amended. The U.S.
Revolving Notes have been given in renewal, extension and modification of the
revolving credit facility previously provided by the U.S. Lenders to the
Borrowers pursuant to such March 16, 2001 Loan Agreement, the U.K. Revolving
Notes have been given in renewal, extension and modification of the revolving
credit facility previously provided by the U.K. Lenders to the Borrowers
pursuant to such March 16, 2001 Loan Agreement, the Canadian Revolving Notes
have been given in renewal, extension and modification of the revolving credit
facility previously provided by the Canadian Lenders to the Borrowers pursuant
to such March 16, 2001 Loan Agreement and the Term Notes has been given in
renewal, extension and modification of the term loans previously made by the
U.S. Lenders to the Borrowers pursuant to such March 16, 2001 Loan Agreement.
From and after the Closing Date, (i) the lenders which were parties to such
March 16, 2001 Loan Agreement and which are not Lenders party hereto shall have
no further commitment or obligation to the Borrowers or any
other Obligor as a lender under such March 16, 2001 Loan Agreement, as amended
and restated by this Agreement, and (ii) JPMorgan Chase Bank, Royal Bank
of Canada and X.X. Xxxxxx Europe Limited shall each cease to be an Agent and
shall have no further obligation to the Borrowers, the other Obligor, any of the
lenders which were parties to such March 16, 2001 Loan Agreement and which are
not Lenders party hereto or any of the Lenders party hereto in the capacity of
Agent under such March 16, 2001 Loan Agreement, as amended and restated by this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
NATCO GROUP INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. XxxxXxxxxx
----------------------------------------------
Xxxxxxx X. XxxxXxxxxx, Senior Vice
President and Chief Financial Officer
NATCO CANADA, LTD., a corporation formed
under the laws of the Province of Ontario
By: /s/ Xxxxxxx X. XxxxXxxxxx
----------------------------------------------
Xxxxxxx X. XxxxXxxxxx, Vice President
AXSIA GROUP LIMITED,
a company incorporated in England and Wales
under the Companies Act of the United Kingdom
By: /s/ Xxxxxxx X. XxxxXxxxxx
----------------------------------------------
Xxxxxxx X. XxxxXxxxxx,
Authorized Signatory
Address for Notices:
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. XxxxXxxxxx
Telecopy No.: (000) 000-0000
The undersigned hereby join in this Agreement to evidence their consent
to execution by Borrowers of this Agreement, to confirm that each Loan Document
now or previously executed by the undersigned applies and shall continue to
apply to this Agreement and to acknowledge that without such consent and
confirmation, Lenders would not execute this Agreement.
NATIONAL TANK COMPANY, a Delaware corporation,
and TOTAL ENGINEERING SERVICES TEAM, INC.,
a Louisiana corporation
By: /s/ Xxxxxxx X. XxxxXxxxxx
-------------------------------------------
Xxxxxxx X. XxxxXxxxxx,
Senior/ Vice President and Treasurer
AXSIA HOLDINGS LIMITED (formerly known as Starfish
Acquisition Limited), a company incorporated in
England and Wales under the Companies Act of the
United Kingdom, AXSIA LIMITED, a company
incorporated in England and Wales under the
Companies Act of the United Kingdom, AXSIA XXXXX
XXXXX LIMITED, a company incorporated in England
and Wales under the Companies Act of the United
Kingdom, AXSIA HOWMAR LIMITED, a company
incorporated in England and Wales under the
Companies Act of the United Kingdom, and XXXXXXX
XXXXXX LIMITED, company incorporated in England and
Wales under the Companies Act of the United Kingdom
By: /s/ Xxxxxxx X. XxxxXxxxxx
------------------------------------------------
Xxxxxxx X. XxxxXxxxxx, Authorized Signatory
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as U.S. Agent and Co-Lead
Arranger, Issuer of U.S. Letters of Credit, and a
U.S. Lender
By: /s/ XXXXX XXXXXX
----------------------------------
Xxxxx Xxxxxx, Vice President
Address for Notices:
U.S. Commitment: 0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
$5,384,500.00 Attention: Xxxxx Xxxxxx
Telecopy No.: 000-000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$12,115,500.00
COMERICA BANK, as Syndications Agent, as Co-Lead
Arranger and as a U.S. Lender
By: /s/ Xxxx X. Xxxx
-----------------------------------------------
Name: Xxxx X. Xxxx
---------------------------------------------
Title: Senior Vice President - Texas Division
--------------------------------------------
Address for Notices:
U.S. Commitment: 000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
$5,384,500.00 Attention: Xxxx Xxxx
Telecopy No.: 000-000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$12,115,500.00
HSBC BANK PLC,
as U.K. Agent
By: /s/ D.P.S. Hawker
-------------------------------------------
Name: D.P.S. Hawker
-----------------------------------------
Title: Corporate Banking Manager
----------------------------------------
Address for Notices:
U.S. Commitment: Xxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxxxx XX0 0XX
$0 United Kingdom
Attention: Xxxxx Xxxxxx
Telecopy No.: 0000 (0) 0000 000000
Canadian Commitment:
0
U.K. Commitment:
$10,000,000.00
Term Loans:
$0
HSBC BANK CANADA,
as Canadian Agent
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxxx
-----------------------------------------
Title: Senior Account Manager Commerical
---------------------------------------
Financial Services
----------------------------------------
By: /s/ Xxxxxxx Dawhank
-------------------------------------------
Name: Xxxxxxx Dawhank
-----------------------------------------
Title: Corporate & Institutional Banking
----------------------------------------
Address for Notices:
U.S. Commitment: 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx, X0X 0X0
$0 Canada
Attention: Manager
Telecopy No.: 000-000-0000
Canadian Commitment:
$5,000,000.00
U.K. Commitment:
$0
Term Loans:
$0
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxx
----------------------------------------
Title: Senior Vice President
---------------------------------------
Address for Notices:
U.S. Commitment: 0000 Xxxx Xxx Xxxxxxx, 0xx xxxxx
Xxxxxxx XX 00000
$3,384,700.00 Attention: Xxxxxx Xxxxxxx
Telecopy No.: 000-000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$7,615,300.00
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Vice President
Address for Notices:
U.S. Commitment: 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, 00000
$3,384,700.00 Attention: Xxxxxx X. Day
Telecopy No.: 000-000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$7,615,300.00
COMPASS BANK
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
Address for Notices:
U.S. Commitment: 00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
$2,461,600.00 Attention: Xxxxxxx Xxxxxx
Telecopy No.: 000-000-0000
Canadian Commitment:
$0
U.K. Commitment:
$0
Term Loans:
$5,538,400.00
